Brovis Lessons Learned

Created by Tom Kosnik

Fenwick and West Consulting Professor

Stanford Technology Ventures Program

REE Latin America

October 21, 2011

6/8/2012 Brovis Lessons Learned 1

6/8/2012 2

Agenda

• The Double Chasm Challenge

• International Decisions facing Brovis

• Target Country Market Selection using “CAGE” Model

• Go-To-Market Strategy: Ten Point Go-To-Market

Strategy Checklist

– Whole Product

– Positioning

• Should Brovis Go Global Now – or Wait?

6/8/2012 Brovis Lessons Learned 3

High Tech companies face a “Double

Chasm” Challenge as they go global

6/8/2012 Brovis Lessons Learned 4

The Double-Chasm Challenge

• The Market Chasm – based on the early

majority adopters’ perceptions of the

innovation’s risks

• El Cultural Chasm – based on:

– Lack of experience of the companies’ leaders in

each new country’s local culture

– Lack of trust among adopters in each new country

in the “foreign” company and its leaders.

6/8/2012 Brovis Lessons Learned 5

The Market Chasm

Adapted from: Moore (2002), Crossing the Chasm.

Chasm

Early

Market

Bowling

Alley

Tornado

Main

Street

Total

Assimilation

Techies Visionaries Pragmatists Conservatives Skeptics

Resistance

to Risk

6/8/2012 Brovis Lessons Learned 6

The Cultural Chasm

Language

Laws

Circles of Influence

Ethics

Religion

Education

Culture

Business-Government

“The Code” to Build Trust

Business Ecosystem

“Foreign”

High-tech

venture

Adopters

in a new country’s

Local culture

Lack of

Experience Lack of Trust

6/8/2012 7

Agenda

• The Double Chasm Challenge

• International Decisions facing Brovis

• Target Country Market Selection using “CAGE” Model

• Go-To-Market Strategy: Ten Point Go-To-Market

Strategy Checklist

– Whole Product

– Positioning

• Should Brovis Go Global Now – or Wait?

International Decisions

Facing Brovis…

• Which country to enter next?

• Already in India

• Expanding to ASEAN via ICON Base Partnership

• Where next: Japan, Korea or China?.

• What Go-To-Market Strategy in Each Country?

• Ten Step Checklist

• Whole Product

• Positioning

6/8/2012 9

Agenda

• The Double Chasm Challenge

• International Decisions facing Brovis

• Target Country Market Selection using “CAGE” Model

• Go-To-Market Strategy: Ten Point Go-To-Market

Strategy Checklist

– Whole Product

– Positioning

• Should Brovis Go Global Now – or Wait?

How to Decide Which Countries

to Enter using the CAGE Framework

Cultural Distance Administrative

Distance

Geographic

Distance

Economic

Distance

Differences in:

• Language

• Ethnicities

• Religions

• Social Norms

• Absence of

colonial ties

• Absence of

shared monetary

or political

association

• Political hostility

• Government

policies

• Institutional

Weakness

• Physical

remoteness

• Lack of common

border

• Lack of sea or

river access

• Size of country

• Weak Transport/

Communications

links

• Different

Climates

Differences in

cost or quality of:

• Natural resources

• Financial res.

• Human resources

• Infrastructure

• Intermediate

inputs

• Information or

knowledge

Adapted from Ghemawat, Pankaj (2001), “Distance Still Matters,” Harvard Business Review, September

Compare Japan, Korea, and China

using CAGE. Which Would You

Enter First?

Cultural

Distance

Administrative

Distance

Geographic

Distance

Economic

Distance

Adapted from Ghemawat, Pankaj (2001), “Distance Still Matters,” Harvard Business Review, September

6/8/2012 12

Agenda

• The Double Chasm Challenge

• International Decisions facing Brovis

• Target Country Market Selection using “CAGE” Model

• Go-To-Market Strategy: Ten Point Go-To-Market

Strategy Checklist

– Whole Product

– Positioning

• Should Brovis Go Global Now – or Wait?

Ten-Point Go-To-Market Strategy Checklist

1. Target Markets & Customers

2. Compelling Reason to Buy

3. Whole Product

4. Partners and Allies

5. Distribution

6. Pricing

7. Competition

8.Positioning

9.Marketing Communications

10. Next Target Segment

Source of money

To fulfill the compelling

reason to buy

Function of whole product

integration complexity

Reference competitor

in the same category

Next move

Source of demand

Needed for whole product

Function of all other factors

This checklist holds for all stages in the Life Cycle

Relative to reference competitor

Exercise: What is the whole product

for Brovis’ target customers in India?

Your Core Product

Complementary

Services

Complementary

Products

6/8/2012 14 How might the Whole Product be different

for Japan, Korea, or China?

6/8/2012 15

Positioning Statement that you must

Validate with Customers

Market

Definition

Value/Compelling

reason to buy

Competitive analysis

Differentiated

position

Opportunity

Need

For (target customer)

Who (statement of the need or opportunity)

The (product name)

Is a (product category)

That (statement of key benefit – the compelling reason to buy)

Unlike (primary competitive advantage)

Our product (statement of

primary differentiation) Tagline

Web site,

collateral

Elevator

Pitch

Corporate

Presentation

Executive

Summary

Source: High-Tech Marketing © 2005, TCG Advisors LLC 6/8/2012 15

Positioning may vary by country and by industry target segment!

6/8/2012 16

Ejercicio: for Brovis

For (target customer)________________________________________

Who (need )_______________________________________________

__________________________________________________________

The (product name)_________________________________________

Is a (product category)______________________________________

That (compelling reason to buy)_________________________________

____________________________________________________________

Unlike (primary competitors)____________________________________

Our product (statement of primary differentiation)_________________________________________

____________________________________________________________

Source: High-Tech Marketing © 2005, TCG Advisors LLC

6/8/2012 17

Agenda

• The Double Chasm Challenge

• International Decisions facing Brovis

• Target Country Market Selection using “CAGE” Model

• Go-To-Market Strategy: Ten Point Go-To-Market

Strategy Checklist

– Whole Product

– Positioning

• Should Brovis Go Global Now – or Wait?

6/8/2012 Brovis Lessons Learned 18

Should Brovis go global – or wait?

Evaluation Criteria

Go Global!

Don’t know

Stay Local!

Market opportunity (Most

target customers are based

outside our country)

Customer need (Our target

customers are global)

Vision (Leaders want to build a

global company)

Core Competence (Leaders

have unique global skills and

networks)

Arbitrage (Leverage

advantages in other countries)*

Strategic positioning

(Preempting competitors)*

Replicability (Gain scale

advantages)*

Diversification (Reduce risks

of downturn in home market)

* Arbitrage, Strategic Positioning, and Replicability are from: Sander, Alison (2001), “Go Global or No? HBR.

6/8/2012 Brovis Lessons Learned 19

Should Brovis go global – or wait?

Evaluation Criteria

Go Global!

Don’t know

Stay Local!

Market opportunity (Most

target customers are based

outside our country)

X

Customer need (Our target

customers are global) X

Vision (Leaders want to build a

global company) X

Core Competence (Leaders

have unique global skills and

networks)

X

Arbitrage (Leverage

advantages in other countries)* X

Strategic positioning (Preempting competitors)*

X

Replicability (Gain scale

advantages)*

X

Diversification (Reduce risks

of downturn in home market) X

* Arbitrage, Strategic Positioning, and Replicability are from: Sander, Alison (2001), “Go Global or No? HBR.

Epilogue

• Brovis continued to expand rapidly into India

and Southeast Asia

• It had limited success in penetrating Japan,

China, and Korea

• It has expanded to some countries in Middle

East and Africa

6/8/2012 Brovis Lessons Learned 20

http://www.brovis.com/

Brovis is Hungry, and

Determined to go global NOW!

Team Exercise

• Use the “6 Ms” to make decisions about the marketing communications mix for Brovis in the next year.

• Look at the new Web-based marketing tools and media channels on previous slide.

• Which of these tools and media channels should Brovis use to market its products?

• How would your marketing communications campaign be different in different countries?

6/8/2012 22