Dermott Dowling, Founding Director @Creatovate and Patrick Tully, Partner @Fusion Learning share some insight into their 7Cs ‘critical thinking’ framework to break down the challenge of where, when and how to create, grow and sustain an International Business.
For many businesses and business owners change can feel both exciting and challenging, and for some it feels downright daunting. However, what is universally true is that business growth without change is impossible to achieve and for many businesses the most effective form of growth and change is expansion into new markets or geographies.
The journey to extend into other markets can, in its infancy, seem overwhelming particularly for small and medium sized businesses that are highly dependent on their domestic success. However, like any journey, the provision of a route-map and a travel guide can both shed light on the destination and map out the pathway to getting there. This is the purpose of our 7Cs framework, is to help structure, plan and build a rock solid foundations for a strategy of expansion into Asia and beyond. Think of it like planning a journey across the Seven Seas from the safety and security of your home port before setting sail into the unknown beyond your borders.
The 7Cs framework includes a wide range of processes and tools that enable us to strive for the extra-ordinary. Our ability to deliver, however, is founded on the first, critical step – setting ourselves an extra-ordinary challenge.
The purpose of the challenge statement is to help us set course for the journey ahead, in essence the challenge must act as our compass – providing direction without forcing a path on us. Ultimately the challenge statement set’s out the end in mind, what are you specifically trying to achieve? It helps provide us with a clear purpose around which to focus our data and information search and around which to align the entire organisation.
Experience shows that there are 3 crucial characteristics of a great challenge statement. These challenges are:
Prioritised: They focus on something that has significant implications for the people on the team and decision makers MUST care about what’s at stake if the outcomes are to come alive.
Provocative: If the solution is easy or obvious, just do it. What we need are unreasonable challenges we can rise to and measure.
Precise: they spell out very clearly what it is that the team need to do to create the future we want.
There is one final aspects to creating the perfect challenge. The first is getting the scope right. Too narrow a challenge is constraining and leads to obvious, well-trodden territories. Too wide a challenge can be dizzying and disorientating and leads to generalised thoughts that lack depth or profoundness
Once you have set your business challenge and aligned your company and leaders internally around the opportunity to internationalise your business your attention immediately turns to the where? question. Where? to go first. Most businesses by default enter international markets through either a direct approach from an overseas based importer or a locally based consolidator. Some also are taken internationally by their existing customers as they grow and spread their wings across the Seven Seas. Whilst others may be dragged into International Business through the people in their businesses, from past experience, networks and explorer mindsets. Smart businesses start by creating a strategy with “Where?” front and centre in their minds and rank and decide which Countries are best to go to first, second and third…for their business. A practical and easy to use Country sorting tool is the PESTEL for macro-country data.
■ Political situation – stability, trade agreements?
■ Economic situation – present & future wealth of consumers?
■ Socio-cultural – business culture adaptability?
■ Technology – Infrastructure considerations, transfer of technology issues?
■ Environmental – considerations?
■ Legal? Regulatory environment? IP protection? Claims & Registration requirements?
One way to do a quick sort and ranking might be through use of a scorecard on each dimension using forced choice 0, 4, 7 or 10 with 0 being No, 4 is Low, 7 is good and 10 is High for attractiveness on each dimension of the PESTEL giving and overall score out of 60 enabling fast sorting and ranking of countries for market entry.
A quick and easy to use matrix like the one below can be used by a food company to sort 5 different countries in Asia for possible market entry using P.E.S.T.E.L analysis and available country data to hand.
|Total (out of 60)|
Additional market data maybe built into your Country ranking and prioritisation files including market attractiveness, competitive intensity or dispersion, barriers and openness to trade and innovation intensity. Creatovate & Fusion Learning have a suite of tools they use to help their clients make these seemingly ‘massive’ tasks logical swift and easy to understand.
Having decided on the country or countries we are aiming to enter we need to understand the category or categories from which we want to source our business. The category is the consumer’s understanding of the group of products or brands with which ours competes. In other words, its competitive set. To help define it we ask: what is our product one of? Or what could it be a replacement for?
- Needless to see that categories vary significantly by geography and although in your mind your product may be very clearly defined in its domestic market you can be assured that it may well sit in quite a different space in a new geography. There are several fundamental reasons for building a clear understanding of the category in which you want to play, which are:The category will have certain product and pack codes that will be expected and challenging these can sometimes be disastrous
- The category you target will have a significant impact on the benefits you communicated and the competitive advantage you choose to leverage. Imagine you’re the producers of premium dried fruits. If you chose to target fresh fruit you’d probably leverage your convenience or perhaps sweetness. If, on the other hand, you targeted confectionery you’d be likely to major on your naturalness or heath properties
3. In most markets data is available around the size and growth trajectories for categories – so making choices around category can help you understand the potential for your product today and in the future
4. Finally, most categories have clearly defined barriers and drivers. Understanding what these are can provide you with both a clear point of difference and competitive advantage based on either addressing a barrier or amplifying a driver – see below
4. Competition or Collaboration
Competition in the new market(s) your business enters is highly likely to be different to your home market. There maybe a few of the multinational companies you see at home but there is also most likely to be local or regional players to consider. With their local knowledge, networks and understanding local and regional players can be formidable competitors. Understanding your own external Threats and Weaknesses and your internal Strengths and Weaknesses can help you work out where to compete and where to collaborate. SWOT analyses of the Competition will also help understand if their Weaknesses are your Threats and whether this might throw up opportunities to collaborate or compete. Likewise similar SWOT analyses of competitors at home might highlight the opportunity to collaborate internationally. This is commonly done in some industries like brewing where fierce competitors in one market collaborate in other markets by brewing, marketing and selling each other’s brands under licence at another brewery abroad.
Our suggestion is to pick the top 2-3 competitors in your Category and do a fast and simple SWOT on each of them in your new market. Do not ignore pulling out SWOTs on your home market competition as well in this exercise. TOWS matrix analysis on your own business can also be used in to see what opportunities are presented to ‘work together’ or ‘partner’ with businesses that need you as much as you need them.
Tools that might help in these exercises are shared below and an abundance of useful templates and how to… guide exist in textbooks, online or in your own business to assist this process. An excellent source article on SWOT and TOWS analysis can be found at:
Clients find the exercise is easy to do when facilitated by good partners like Creatovate and Fusion Learning taking ‘what you know’ and addressing ‘what you don’t know’ with concrete actions and go forward plans to communicate and possibly collaborate with competition in new markets before entry.
The ultimate custodian of success or failure in any geography is the consumer of our product or service – if they don’t connect with and continue to consumer our offer then we are doomed to failure. The importance of deeply understanding who you want to target and why they should be interested in your offer is a crucial stage on the journey to successful expansion.
The first thing we must establish is who do we believe our offer will appeal. Although this may seem obvious it is all too often left at the level of unhelpful generalities such as MGBs (Main Grocery Buyers) or Mums with young families! As we become more globalised and categories become ever more fragmented the need to deeply understand your target becomes ever more important and this is very difficult to do unless we have a clear handle on who they are. For most brands and businesses the sentiment should be target narrow, yet reach deep. The point being that the more specific you are in your targeting the more likely you are to build an enduring relationship with your consumers.
Fusion Learning have developed a fingerprinting© tool that aims to help develop an improved understanding of the people in our market by searching for patterns and discordances between key communities of consumers. Fingerprinting© is particularly useful when drilling for insights and understanding in seemingly divergent targets. It is also a powerful way to ‘walk in the shoes’ of your
It achieves this by focusing on the key questions that help us segment our consumer base – see below:
Having understood who we want to target the challenge is now to dig below the surface of their behaviours to understand the beliefs and attitudes that are driving them – in others words consumer insight. Fundamental to delivering this level of understanding is the thought that true insights are rarely found lying on the surface – they are all about what lies below.
There is a clear relationship between a human’s observable behaviour and the deep-seated belief system which has been developed over time in both the conscious and unconscious mind. In other words, behaviours unlock potential but beliefs are often key.
Behaviours are the things we can observe, interrogate, compare, model and measure. They are also ultimately what we want to influence.
Beliefs force us not to take the obvious for granted. They allow us to link apparently different behaviours and help us find emotional and functional levers to change behaviours.
As insight hunters, a key part of our role is to observe consumer behaviour – what they say and do – but then to dig down below to understand why they do it. What are the beliefs and attitudes that make them respond the way they do?
The importance of leverage
The world is full of exciting facts and understanding how humans’ brains work can be fascinating, but often that’s the trap.
Consumer information in its own right has no value – unless it is analysed, manipulated, interrogated and extrapolated it remains simply a pile of facts, judgements and observations. Our role is to search for the right information, develop a deep understanding of the consumer and then to turn it into leverage or active insights.
We need our insight to be leverage in 2 senses:
- Fit to challenge – does it create opportunities we can use for our challenge?
- Fit to brand – are the insights and resulting opportunities appropriate for our brand?
Falling in love with an elegantly articulated insight that has no bearing on your brand or business is an all too common trap to fall into. We call these insights FASCINATORS, they’re often deeply interesting and astoundingly astute but exceedingly difficult to attach a commercial or brand opportunity to.
The insights we want are LIBERATORS, these have a depth of belief-based understanding that’s matched by their relevance to our challenge or brand. Based on these key dimensions, we will define an insight as:
“A profound understanding of consumer beliefs and behaviours that provide inspiring springboards for exciting new brand building opportunities.”
Overlooked in so many case studies in the race to understand the preceding 5Cs and get your product or service out the door, many businesses miss the opportunity to get an early ‘Voice of the Customer’ in their International Business strategy creation and implementation. Rather than leave this to importers or people in the new market, our recommendation is to prepare a plan for a constructive conversation with your new potential customers (retailers) who will be the gateway to your consumers. Without an engaged customer (retail partner) supporting your products, services and proposition you cannot delight consumers of your finished goods. Customers have needs and a wealth of information and learning at their fingertips that more often than not they are only too happy to share with new market entrants. Time and time again we read, hear and sometimes see businesses waltz into a new market only to find out at the eleventh hour that the Customer is not aligned with the launch plan, has other priorities or is simply upset that they were not consulted before arrival in the new market. Early conversations with customers build relationships, engage them more and empowers them to share what they know to your advantage.
Constructive conversations start with a fast preparation and we recommend a simple plan is put together before you visit the customer based on the following checklists as a guide, including some simple Stop! Start J Go… traffic light symbols or colours if more attention is needed in any areas:
Does our Category opportunity and impact, reflect our
- “Customer’s agenda”
- Customer’s level of sophistication
- Channel thinking
- Customer’s data
- Resources available to support customers’ needs
Is our offer to the customer based on a sound?
- Consumer and shopper insight
- Consumer and shopper proposition
- Customer commercial proposition with evidence and assumptions
Is our first Customer conversation
- Easy to understand? Try it on someone from another country in the office or a customer at home first.
- Easy to implement? Can we talk with/out technology as an aid? Language?
- Simple, clear actions? What do we need to take away as a Must, Intent or Wish from our first meeting with potential customers?
- 4Ps considered for the category & customer (not just your products)
Take note that not all customers and channels in your new market of choice will be appropriate for your product or service. One of the most important outcomes of your “Voice of Customer” excursions will be making a choice on where to focus your effort and where not to go initially on market entry. The last thing you want to do is spread your efforts too broadly and thinly not satisfying any customers or engaging shoppers. Do make the tough choices and focus on a key channel and customers in that channel before your spread your efforts too broadly.
An example output of a simple Channel/Customer Choice template for a consumer good into Indonesia from a Voice of Customer exercise might look like the following chart:
Having spent time looking at the external context in the preceding 6Cs the time has now come to start looking inwardly to identify the strengths and opportunities you can leverage to guarantee your success. Having clearly understood all the external context you will be in an excellent position to understand the competencies you have that may enable you to deliver a compelling competitive advantage. The first thing to do is to start by listing all the tangible and intangible competencies you might have.
This process starts by identifying what we can excel in from a brand, product and technology / manufacturing perspective – what can we do better than anyone else. By understanding all our tangible and intangible assets can provide platforms for opportunity and competitive advantage. Having listed our competencies we should rank them based on:
- what can we own
- what do we own
what do we own exclusively
If we can focus on what we own exclusively we are able to:
- play to our strengths and thereby
- reinforces brand or product credibility
- minimises risk
- provides benefit or to RTB for our consumer
- leverage what made us famous in the first place
There are many sources of competency from the tangible (like unique ingredients) to the intangible (like a brand personality trait) but to kick you off here is a list of some places you van start to look:
Brand asset – an element of the brand like the colour purple for Cadbury
|Ingredient – a unique ingredient or an ingredient you’ve become famous for like Cherry Ripe|
|Technology – this can be product or pack based like high pressure processing or steam technology|
|Target – this is about owning a specific audience or expert segment like Tresemme (salons)|
|Packaging – this could be a shape or type of packaging like Absolut or Orangina|
|Manufacturing – a unique way of making your product like Cadbury Bubbly|
|Feature – something you offer that others might not (natural energy Boca Lupo)|
|Benefit – something that you do for the consumer better than others (Olay: 7 signs of aging)|
|Occasion – own an occasion like Easter: Cadbury Crème Eggs|
Critical thinking frameworks like the 7Cs above help you break down seemingly overwhelmingly complex challenges and business opportunities into a sequence of manageable steps and processes where your team take heart as they see concrete go forward actions to implement. The 7Cs do not need to be executed in sequence and you may find you start with one C before moving back to another or jumping forward a few steps. We recommend an alignment on Challenge is fundamental to guiding your business through the 7Cs framework. Our recommendation is that you also partner with outside experts like Fusion Learning and / or Creatovate to hold yourselves accountable to a project timeline, participate in the process rather than facilitate it and get the benefits of continuous learning from past and future clients doing this process.
Patrick Tully is Partner @Fusion Learning. Fusion Learning is a global marketing capability consultancy that unleashes the potential of brands and businesses by unleashing the potential of the people that look after them.
Patrick & Dermott can help you and your business grow internationally using the 7Cs critical thinking tools. If you are interested to build both your capability and dive deep into each C using action learning and critical thinking, please register your interest in the form below for further information.