3. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
1951
1990
2000
2010
2014
Family-owned
company
in the 3rd generation
ca. 850
employees
ca. 70,000 square
meters of
operating area
Sales of ca. 130
million euros with
more than 60%
export share
4. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Innovation Quality Performance Enthusiasm
Ideas that stick
Quality in
every detail
Zest for
top
performance
Enthusiasm for partnership
7. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Why enter Russian Market?
To gain a large market share 2013
To widen a customer base
Rapidly increasing automatic segment
Forecasts:
● in 2014 Russia will be the largest
automatic market in Europe
● in 2020 Russia will be Europe’s
largest and world’s fourth-biggest consumer
market
As a result – increasing profit
8. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
What are the customer needs in Russia?
High quality;
Fast execution of work and meeting of deadlines;
Default of defective goods;
Face-to-face work with every customer.
7 consumer groups
Innovators
Achieved
Stable
Spontaneous
Upwardly Oriented
Traditionalists
Saving-Oriented
9. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
SWOT - analysis
Strengths Weaknesses
Quality
Wide range of products (7 groups)
Flexible time of delivery
Novelty respectively to the Russian market
Innovations
Stable export rates
The lowest costs for advertising
Low familiarity at the Russia market
High cost structure
Time for adapting to the Russian terms
Need for opening new office and
storages (hence increasing of costs)
The lack of substitutes of the same quality
Minimal competition
The receptive market (the 9th largest
consumer market in the world)
The growth of the automatic sector (13%
in 2013)
Comparative low tax rates
Increasing euro exchange rate
Probable low demand at the very
beginning
The size of the country + high traveling
costs
Uneven developing of the Russian regions
Unstable political situation
Bureaucracy
Low transparency of the legal system
Opportunities Threats
10. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
PEST - analysis
Unstable world political situation
Political Economic
Social Technological
WTO regulation + MFP
Administrative burdens
State guarantees for nonresident business
Low economic growth
High inflation rate (7,1%)
Increasing euro exchange rate + currency
fluctuations
Moderate FDI climate
Seasonality
Unstable probability of solvency
Low possibility of the changeable
customer behavior (B2B)
Demand for high quality at the minimal
price
Absence of the same technologies in
Russia
Low familiarity level about provided
technologies
But high technological potential
11. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Porter 5 forces - analysis
Bargaining power of
High price sensitivity
High market capacity for new
Competitive rivalry
within an industry
Level: medium
customer
Level: medium
Threat of New Entrants
Level: low
Bargaining
power of
suppliers
Level: low
Threats of
substitutes
products
Level:
medium
Competitors are mainly
producing labels for
consumer health which is
not our business
entrants
All the
producing
processes
are inside of
Germany
Expensiveness
of switching
costs
12. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Why enter now?
In 2014-2015 the growth of Russian economy will be very slow
Our company will have the comparative advantage, because we
don’t import raw materials. But Russia does.
In 5 next years in Russia more than
800 new hypermarkets will be
opened, so there will be the
increasing demand for packaging,
labels and other products of our
company.
13. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Main strategy
1)Establishing a sales office
2)Establishing storages
3)Production
Short-term
phase
Long-term
phase
14. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Main strategy
1) Establishing a sales office
o setting up sell representative
o establishing 2 offices
Places: Moscow (as the
capital and the center)
Yekaterinburg (for
reducing travelling
costs)
15. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Main strategy
2) Establishing storages
In several years (2-3 years) more places
Until this time – 2 cities and renting
Places: Moscow (as the
capital and the center)
Yekaterinburg (for
reducing travelling
costs)
16. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Main strategy
3) Production
In 5-7 years it’d be possible to buy some spaces and produce
products in Russia
Places: Moscow (as the
capital and the center)
Yekaterinburg (for
reducing travelling
costs)
17. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Pricing
Global marketing
(the prices will be like at all other markets the company
serves)
Dependence on the individual product
(from very cheap to very expensive)
+ terms and time of delivery
+ complete new product layouts will be
more cost intensive
18. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Advertising
BTL-advertising
Fairs and Exhibitions:
Interpack
RosUpack
Expo
19. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Advertising
ATL-advertising
Catalogues and professional press
+
Website and web advertising
minimal costs
+ sponsorships and charity
+ cooperation with the Medci (network of private
medical clinics)
20. Introduction Background
Market
Research
Strategy Gantt Chart Conclusion
Financing and distribution
Form of distribution:
Business to Business
Products will be sent from
Germany to Russia (at least ~
first 5 years)
Financing:
We’ll use our own funds and
resources
+ possible government
subsidies