Value analysis and value engineering

The next facebook won't come from the U.S.

- Jan Rezab

What is a Global Start up?

A global start up is a new venture that is international by design and not by emergence. 

 

- Moen, Erikson & Sorheim

Why a Global Start up?

Till earlier decade company stabilises their home market before going global.

Due to explosion of information, technological advancements & unexploited oppurtunities.

2 major reasons - Offensive & Defensive

Major Characteristics of a global startup

Constraints in resources

Characteristics of a global startup

Start ups

are highly active in 

INTERNATIONAL MARKET

Characteristics of a global startup

Trends

Across industry

Catching up

Characteristics of a global startup

orientation

with strong global outlook

high interpreneurial

Characteristics of a global startup

Target Niche

by following differentiation strategy

Characteristics of a global startup

skills abroad

Leveraging local knowledge and

Characteristics of a global startup

Quality

Emphasis on

Characteristics of a global startup

Key Challenges

of Global Start ups

Context

REsources

Distance

Every countries regulatory, environmental, political  labour system vary to a greater extent.

 

Eg: Internet security - Brazil, Russia , china

It is important factor which clearly differentiates our startup and other firms with similar products.

The main challenge is to exceed client expectation with cost & other constraints. 

It plays a critical role because of the time differences it creates. 

Psychic distance would be another challenge, for instance considering asian countries work on monday to friday, where as Israel operates sunday to thursday. 

Must have competencies

of global entrepreneurs

Articulating a

compelling global purpose 

Must have competencies of global entrepreneur

Logistics & Supply 

chain Coordination

Must have competencies of global entrepreneur

Striking a 

Right

Partnership

Must have competencies of global entrepreneur

Few lessons & suggestions for a global start up

selecting

Right

region

Entrepreneurs should target the countries that provides opportunities which MNC don't find attractive and also the region which local companies can't address the problem.  

Suggestions for a global startup

Seeking individuals

with right

Exposure

It helps us to gain local knowledge, eliminate blunders and also seek right partners, customers, etc.

Suggestions for a global startup

Having right

Purposes

Rather than targeting on solving the biggest problem across world startups can solve small but more significant issues with clear solution.

Suggestions for a global startup

Having right

MIND SET

A global mindset has to be instilled in everything we do.

Suggestions for a global startup

selling a minimum viable product early to

Foreign customers

Rather than focussing more on enhancing products entrepreneurs can devote time in selling minimum viable products.

Suggestions for a global startup

What is an

Emerging market?

emerging market & Global Startups

Both of them would be very interesting parallels because of high volatility but the growth potential is huge.  

 

The following are the main reasons for the boom of global startups in emerging markets.

Ease of

Creating

Business

Emerging market countries have understood impact of global business by local firms in their respective economy so they have simplified the process and systems.

Eg: INC - 29 forms - India

Reasons behind increase in global startup in EM

Preexisting

Competition

Intense competition in local markets leads to targeting global niche.

Reasons behind increase in global startup in EM

support from

LOCAL GOVERNMENT

Many EM Governments are creating support policies to local startups. 

Eg: Konza Techno City, Kenya

Reasons behind increase in global startup in EM

Main characteristics of emerging

markets and how global startups can

leverage of it

Hyper

Growth

Characteristics of EM

Availability of

Large low cost

skilled

Labour pools

Characteristics of EM

EMERGING MARKETS Access to

Global Talent, capital & technology

Characteristics of EM

Political & Economic

Characteristics

Characteristics of EM

Emerging competition & 

Global power

SHIFT IN THE DISTRIBUTION OF

Characteristics of EM

Market

Characteristics

Characteristics of EM

Why does emerging market startup

go global?

to target

fresh

markets

Why EM startup go global?

to reduce the cost & increase

Efficiency

Why EM startup go global?

to act as 

National

prestige

Go out Policy - China

Why EM startup go global?

to attain new resources for

catering

Masses

Stakes in INCO, Canada

Why EM startup go global?

Business implications for emerging markets global Startups

Growth as a driver for success

ACt as a corporate

adapt partnership model

Flexibility in operating with evolving regulations

Avoid local focus by having a right management, approach, culture and leadership to grow consistently.

Focus on transparency, quality system & investors trust to build brand.

Concentrate on core strength and outsource the rest to attain transaction synergies.

Understanding the local and international regulations would be key to success.

Problems faced by a global startup in an emerging market

Prone to financial crisis

navigating government bureaucracy tedious

intellectual property issues

availability of institutional voids

unreliable product quality

Strategies for a global startup in an emerging market

Right from electronic items to food products from emerging market have gradually increased the market share across globe.  

Diaspora

Strategy

If all the immigrants of the world form a nation it is estimated to be the fifth largest country. The diaspora strategy takes leverage of ethnic groups situated at various part of the globe.

Segments to be targetted

Assimilation

Marginalisation

Biculturism

Acculturation

Ethnic affirmation

These segment of people are highly associated with the host culture and they tend to buy host products than the home products. 

These set of people doesn’t get associated with any culture, they are highly rational and purchase products based on functional performance and the reviews. 

This segment would prefer affiliation with the host country and at the same time maintaining home country culture.

These segments of people change constantly, but they have direct contact with host culture and their attitude, values, life style and other behavior will be inclined with host culture. 

These are the right set of people which firms should be targeting at as these people are highly associated with the home country and their products.

Diaspora

Map the diaspora networks

Tap right informal groups & individuals

identify right organisations

motivation of diaspora communities

engaging at all levels

having the right tools to measure impact

Members of ethnic groups more often found to be living in same residential location or work in similar industries. Eg: Americans in Japans

Almost all home countries have different offices for various purposes like facilitating trade activities, helpline, etc.

Connect to their social and emotional needs than the functional needs.

Companies have started having community engagement managers and started taking leverage of technology to engage the ethnic groups.

Diaspora

strategy

REverse

Positive campaign route

In today's world consumers perception plays a critical role in purchasing a product. Most of the start up from emerging market have negative associations associated with it. To overcome it companies uses this strategy to reprieve country of origin by hiding or directly attacking the stereotype of people.

Disguise the

origin

of brand

Firm conceals its own identity by giving a different appearance. 

Eg: Kayserburg, China

confront the

negative

of brand

Association

Few brands take bold step of confronting the negative association by increasing the quality standards. Eg: OSPOP, Chinese foot wear. 

focussing on

nuggets

favourable

offer additional

Guarantee

Hyundai 10 years -

Power train protection

emphasize more on

aesthetics

When quality products join hands with aesthetics it accelerates brand acceptance. 

Eg: Chinese car makers hire Italian designers

Synergies

invest heavily in

Marketing

Samsung,

South Korea

following the

Japanese

route

Initially enters market with minimum viable product and slowly builds the brand and improvise the quality to target the premium segment, WW2

Key success factors

for asian tortoise

Country

Corporate

category

Firms home country should supply cheap labour to cater bottom of pyramid. 

Long term orientation. 

Protected home market. 

Government friendly policy & commitment to export oriented manufacturing.

Pursuit of world class high quality manufacturing process. 

Focus on innovation. 

Humility to learn from leaders of industry. 

Orientation towards adaption of new technology.

Identify price sensitive segment to be a cost leader. 

Price and quality of product can be judged independently. 

Substantiate economics of scale. 

Thank you

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