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.