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Beyond Exporting… Options for International Growth

Beyond Exporting… Options for International Growth. John Dearing Capstone January 13, 2010. Agenda. Introduce and discuss international growth options Overview of challenges and how to address them A brief synapses of a systematic and proactive process Q&A. About Capstone .

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Beyond Exporting… Options for International Growth

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  1. Beyond Exporting… Options for International Growth John Dearing Capstone January 13, 2010

  2. Agenda Introduce and discuss international growth options Overview of challenges and how to address them A brief synapses of a systematic and proactive process Q&A

  3. About Capstone • A “growth engineering” firm • External growth specialists • Growth strategy development • Process-focused, industry agnostic • International experience

  4. What are your international growth options? The Strategic Overview

  5. Build the Foundation Start with strategic planning and objectives

  6. The Opportunity Matrix Existing Competencies New Competencies

  7. Pre-entry International Checklist • Do you have a strong domestic core business? • Have you prioritized the countries and regions in which to move - undertaking a rigorous process to identify profitable markets for expansion? • What is the best way for your company to enter foreign markets: Build – Borrow – Buy?

  8. Effectiveness Framework

  9. International Growth Options Degree of Commitment Low High Transactions Direct Investment Foreign located & administratively controlled Located domestically & administratively controlled Foreign located & contractually controlled

  10. What are the challenges of going international? …and how do we deal with them?

  11. Types of Challenges

  12. Overcoming the Challenges

  13. Make sure your teams are in place Gather internal team Commitment from stakeholders Coordinator – focus on driving the process Consensus committee Gather external partnership team Financial – capital partners and accounting Legal – market specialist and tax experts Due diligence – technical and cultural experts

  14. Value of Third Party Resources VEDP Network of preferred service providers In-country consultants Resources for up-to-date market info “Growth Engineering” consultants Experience with the process Help maintain objectivity Commercial Databases Lexis-Nexis, OneSource, D&B, etc

  15. What are some tools I can use to develop and implement an international growth plan? A brief overview

  16. Market driven approach Partner Candidates Sample Capabilities Market Players Sample Markets Medical/ France Company A Candidate A Sales Channels Candidate B Company B Customer Service IT/ India Company C Candidate C Human Resources Agriculture/ Brazil Company D Manufacturing Industrial/ China Management Military/ UK

  17. Goal: Establish a large pool of possibilities based on your criteria Leverage your contacts… PLUS Use your internal resources to compile a comprehensive list, then expand/sort the list by searching among various parameters: • Products • Markets • Capabilities

  18. Market Criteria Matrix “Clearly Define What You Want” 100% Total: Ratings are from 1-10 Score = weight x rating

  19. Why a Market Driven Process? Numerous options for growth are available Proactive strategy more effective than reactive Objective evaluation of options is better than myopia/ getting emotional Build your pipeline and funnel down Reach new customers worldwide!

  20. How would this work in practice? A real world example

  21. Case Study: Food Service Business (FSB) Division of multinational contract services company

  22. Food Service Business: Results Markets Identified Markets Selected for Further Evaluation Prioritized Prospects Acquisitions 20+ 17 12 2 • Capstone held a kickoff meeting to develop FSB’s market and acquisition prospect criteria • Capstone established a proactive plan for researching several new markets and prospects simultaneously • Capstone researched and profiled institutional contract services markets in 17 countries in Europe and South America • Capstone compiled a database of key players in each market, prioritized the targets based upon client’s criteria, and created profiles of the most attractive prospects • Capstone identified roughly a dozen highly attractive acquisition prospects in several markets and moved the client into negotiations • Capstone’s research revealed critical cultural hot buttons to be considered prior to negotiations • Advised client on alternatives to outright acquisition, such as joint ventures and minority investment • FSB eventually acquired minority positions in two market-leading competitors – one in Europe and one in South America

  23. Take-Away Understand your specific strategic reasons for going international and focus Align reasons with organization’s goals Overcome challenges by leveraging your internal and external supporting teams Be proactive and market focused in your process

  24. Questions? John Dearing 7901 Jones Branch Drive Suite 300 McLean VA 22102 P 703 854 1910 | F 703 854 1911 E-mail: jdearing@capstonestrategic.com Blog: www.mergersandacquisitionsdaily.com Website: www.capstonestrategic.com

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