International Business Strategy

Many companies are exploring opportunities to expand their business to emerging markets or to new distribution channels. It is key to determine the right route to market and the right set-up of the supply chain to efficiently facilitate customers.

Distribution analysis and market entry strategy

Determining the right market entry strategy through a distribution analysis is the key to success. Markets across the globe are different and companies need to understand these differences when developing a tailormade market entry strategy. Such differences can include for instance economic, political, geographical, cultural, tax, legal and demographical factors, buying behavior, competition, distribution channels, available logistics infrastructure etc. When entering a new market or changing the distribution channel, companies need to assess the opportunities and related risks. Several market entry strategies exist including:

  • The indirect sales model, utilizing a master importer or distributors for importing, sales & marketing, and distribution to the customers in this market
  • The direct sales model, which requires an own legal entity responsible for import/export which gives the company the ability to control its own destiny
  • Hybrid alternatives, for instance, a direct model for serving the large key accounts in a market and using distributors to serve the remainder of the customer base

Distribution strategy: route to market selection

The selected distribution channel will impact the required value chain and logistics set up. Key questions companies need to ask themselves when assessing the right route to market include:

  • What is the right distribution network to serve the customer base?
  • What is the impact of a legal entity in a market?
  • What are the implications related to taxation, laws and regulations?
  • What are the effects on the P&L? For example: A more direct model could increase the top line revenue and risk due to among others exchange rate volatility, inventory holding in a market and sales & marketing expenses
  • What is the right operating model for a (more) direct model – which activities to insource or outsource?
  • Which IT systems support the proposed market entry strategy?

These are just a few questions companies are asking when they are making a choice for a go to market model and/or distribution channel. The answers to these questions are different for various companies for various geographic markets and customer channels.

International Business Strategy & BCI advice

BCI Global supports companies in developing and implementing go to market strategies by:

  • Evaluating market entry options
  • Estimating the impact on revenue and positioning of the different distribution channel alternatives i.e. direct vs. indirect, central vs. decentral, etc.
  • Determining the financial implications of the various alternatives
  • Benchmarking what other companies have done in the same geography
  • Investigating implications from taxation, legal and regulatory (compliance), import, IT and supply chain perspectives

Result: a well based business case with concrete recommendations and a detailed implementation plan.

Learn more about International Business Strategy?

Ask your question to one of our experts

  • Abbott – Go to market strategy development and assessing alternative options
  • Amgen – Assessment of go to market strategies for international markets including licensing assessment, benchmarking and assessment of alternative value chain models from a financial and qualitative perspective
  • Ariad – Product and Market Launch of Ariad’s products into Europe. Selection of distribution channels, partners in 3PL and CMO and implementation support
  • BD – Russia/CIS route to market strategy development, assessing market landscape and alternative routes to market
  • Burt’s Bees/Clorox – APAC go to market strategy and related end to end supply chain model
  • CareFusion – China go to market strategy development for tier 1 and tier 2 cities including logistics set up development and order to cash
  • Crocs – Russia/CIS go to market strategy development and assessing alternative options
  • Cubist (Merck) – International launch and go to market review including end to end supply chain set up covering licensing, QA/RA, CMO, 3PL, Order to cash
  • Eli Lilly – China go to market strategy assessment for a specific business
  • Hasbro – Go to market strategy development, market intelligence and supply chain strategy design for various emerging markets across the globe 
  • Insmed – International launch and go to market review including end to end supply chain set up covering licensing, QA/RA, CMO, 3PL, Order to cash
  • Johnson & Johnson – Russia/CIS go to market strategy development and assessing alternative options from a Commercial and Value chain perspective
  • Limited Brands – International expansion strategy for Limited Brands to sell products to international customers including various fulfilment methods to support this commercial strategy
  • Synageva – International launch and go to market review including end to end supply chain set up covering licensing, QA/RA, CMO, 3PL, Order to cash

Cases