vinci play presentation
TRANSCRIPT
• Company snapshot • Playground industry overview • Market Identification • Final Selection • Recommendations
Presentation Outline
Company Snapshot
Legal name Babycam International trading name Vinciplay
Employees 50 Year of founding 2009
Founder Pawel Chodkowski Managing Director Piotr Nadulne
Head Offices Warsaw, Poland Production and Warehousing facilities Lowicz, Poland
Exports to 15 countries References Skanska, Sheraton, Municipality of
Radom, etc.
Exclusivity agreements
preferred by construction companies
Strategic and economically
interesting partners
Contacts, trust and quality are
important factors for
manufacturers
Niche and highly linked to the construction
sector
Cost-efficient players from
countries with low-labor cost are
increasingly eating away at incumbent
players
Long-term relationships
Mature Industry
PLAYGROUND INDUSTRY OVERVIEW
SWOT Analysis Strengths
• Low-Cost, high quality production • Flexibility of organization • Flexibility of entry-mode • Can react relatively quickly to market trends • Strong enough financial base to expand with an
export-based or OEM model (assumed based on further int’l interest)
Weaknesses • Short market & business experience • Low credibility • Young, Polish company with, as of yet, little
reputation • Weak financial base relative to some established
competitors • SMART playground research still in idea phase
Opportunities • Numerous potential markets for expansion • SMART playground technology • Potential for OEM or other deals • High client-reach with international playground
conference/expo presence
Threats • Implementation of SMART playgrounds in the
playground sector, Chinese low-cost, high-quality producers could compete with pirated or original products, Takeover threats by larger players
A Born-Again Global According to Bell “well-established firms that have previously focused on their domestic markets, but which suddenly embrace rapid and dedicated internationalization", are known as ‘Born Again Globals’.
5 years in POLAND before market expansion
Vinciplay’s foreign markets operations include: Austria, Spain, Denmark, Norway, Sweden, Slovakia, UK, Netherlands, France, Luxembourg, Switzerland, Israel, Italy, Hungary, Russia Export-based entry model, low risk approach
Market Identification
Phase 1 • Initial analysis of 20 potential markets derived through group discussions based
on Vinciplay’s past expansion efforts and attitudes and internationalization strategy of expanding into adjacent and nearby European countries
Phase 2 • Based on GDP, GDP from construction, inflation, housing index, business
confidence and corporate tax rate, as well as geopolitical issues we narrowed down our potential market selection to 5 and compared the above metrics
Phase 3 • Further narrowing down our selection, we employed a PESTEL analysis, and
were ultimately left with two potential markets for short- to medium-term expansion
Phase 1 Phase 2 Germany
Sweden
Switzerland
China
United States
Latvia
Lithuania
Estonia
Azerbaijan
Russia
Mexico
Portugal
Japan
Turkey
Kazakhstan
Italy
South Korea
• Germany • Italy • Turkey • United States • Estonia • Lithuania • Latvia
Italy
Politically stabile Eurozone country, has survived the economic crisis of 2008-2009
Corruption in Italy is always a potential issue
From 2012 we can see good rising tendency in Italy’s GDP
Corporate Taxation beneficial 27,5% in Italy versus 31,7% in Poland
Very family focused and community is “importante”
Environmental rules and regulations most focused on protecting historical ruins/UNESCO sites, which are everywhere in Italian cities.
According to the Italian population pyramid for 2015 and 2020, 5-9 year olds are 2,2% of the population.
+ _
Turkey The main advantage of Turkey is that their government provide policies on liberalisation.
Turkey suffers from widespread corruption and bureaucratic system.
According to the projection made by Goldman Sachs till 2050 this country is going to have 9th largest economy in the world
+ _
Had huge trade gap during last few years, but in 2015 Government manages to decrease it by 39.8 percent compared to year earlier.
Turkey has growing proportion of young population and most families have more than 2 children in a family. The proportion of the population below age 15 in Turkey is one of the highest among OECD countries, 25.5 %
There are some delays in the Turkish judicial system and in addition some judges who are politically influenced what can easily influence on results of some cases
Baltics
Incorporation law in Latvia, Lithuania and Estonia is constituted to be friendly and simply for entrepreneurs.
An European Union members in 2005
+ _ On the contrary Estonia has recently noted slowdown in economy.
Favourable conditions for setting up business
Baltics have flat rate tax systems and they are investors friendly
For all three countries domestic demand will be the most important factor for the economy growth.
Baltic’s populations are constantly shrinking
Leading communications infrastructures provide excellent conditions to foreign entrepreneurs
Fertility rate is still between the lowest in European Union
USA
Strong consumer and construction sector spending power and habit of constructing new buildings/complexes
“Made in America”/”Buying American” important Interactive SMART playgrounds will most likely appear soon in the US and thus provide an opportunity/threat for Vinciplay
+ _
Upcoming Presidential election will have effect on infrastructure spending
Cooperative, friendly Political/Trade Relationship between US-PL
Cultural, psychological, geographical distances
High investment cost Increasing focus on safety and quality
Germany + _
Increases in public investment in infrastructure Economic activity has not been stable
Business investments have disappointed The federal government has made EUR 600 million available for further urban development over the period 2014-2015
Since 2002 Germany has an aging population.
The population will fall to 65 million people
High standard of living and social security
Largest population in the EU
Germany and Poland having strong trading relations
First we paid attention to country GDP, as the most general feature of every country. It gave us a broad picture of how economically developed they are.
$17 419,00 $18 010,00 $18 423,00 $22 000,00 $25 000,00
$3 853,00 $3 890,00 $3 978,00 $4 594,00 $8 248,00
$800,00 $807,00 $814,00 $942,00 $1 117,00
$2 144,34 $2 207,00 $2 224,00 $2 358,00 $3 396,00
$48,17 $48,31 $49,22 $58,44 $75,56
$31,92 $27,55 $27,16 $37,86 $47,75
$25,90 $24,50 $24,64 $30,93 $39,18
$1,00
$10,00
$100,00
$1 000,00
$10 000,00
$100 000,00
GDP 2014 (bill) Forecast about GDP in 2015 (bill)
Forecast about GDP in Q3/2016(bill)
Forecast about GDP in 2020(bill)
Forecast about GDP in 2030( bill)
GDP
USA
Germany
Turkey
Italy
Lithuania
Latvia
Estonia
After general overview of these countries we decide to go deeper in this analyze. As Vinciplay’s representative told that they mostly work with constricting companies we decided that it will be important
to pay attention not only to general GDP but also to GDP from contraction.
$686,20 $713,54 $732,00 $763,48 $766,63
$27,22 $36,69 $32,42 $36,70 $40,12
$17,24 $16,91 $16,74 $17,29 $20,10
$0,18 $0,26 $0,27 $0,24 $0,24
$0,66 $0,73 $0,71 $0,78 $1,03
$0,10
$1,00
$10,00
$100,00
$1 000,00
GDP from constraction in Q1/2015 (bill.)
Forecast about GDP from constraction in Q4/2015
(bill.)
Forecast about GDP from constraction in Q3/2016
(bill.)
Forecast about GDP from constraction in 2020 (bill.)
Forecast about GDP from constraction in 2030 (bill.)
GDP from construction
USA
Germany
Italy
Estonia
Turkey
A comparison of other economical indicators
-2,00% 0,00% 2,00% 4,00% 6,00% 8,00%
10,00%
Inflation rate 2014
Forecast about
Inflation rate
Q4/2015
Forecast about
Inflation rate
Q3/2016
Forecast about
Inflation rate 2020
Forecast about
Inflation rate 2030
Inflation rate
USA
Germany
Turkey
Italy
Lithuania
Latvia
Estonia
0 50
100 150 200 250 300 350 400
Housing Index 2014
Forecast about
Housing Index Q4/
2015
Forecast about
Housing Index Q3/16
Forecast about
Housing Index 2020
Forecast about
Housing Index 2030
House index
USA
Germany
Turkey
Italy
Lithuania
Latvia
Estonia
0,00%
5,00%
10,00%
15,00%
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
Corporate Tax Rate 2014
Forecast about Corporate Tax Rate
Q4/2015
Forecast about Corporate Tax Rate
Q3/2016
Forecast about Corporate Tax Rate
2020
Forecast about Corporate Tax Rate
2030
Corporate tax rate
USA
Germany
Turkey
Italy
Lithuania
Latvia
Estonia
• Am lot of big players are active • The new company needs a “German” profile • The relative maturity of the playground market • A niche market, which may hamper transparency and knowledge about operating
Threat of New Entrants: Medium
Intensity of Rivalry: High
• Polish companies are perceived of manufacturing lower quality good by German customers
• Significant customer loyalty to local and German manufacturer • price is a very sensitive topic, and especially for organizations with budget restraints
Bargaining Power of Buyers: High
Threat of Substitutes: Medium
• The power of suppliers of standardized goods is low • Some suppliers may be pressed for exclusivity
Bargaining Power of Suppliers: Medium
Complementary Products: Weak
Small local and large global players in this industry SMART playgrounds are being researched by incumbents Offer high quality products as Germans are very quality and reputation conscious In the German playground industry, wood is preferred compared to steel Playground equipment manufacturers are selling equipment worldwide and may transfer and apply learning benefits to the German market
Entertainment centres for kids, e.g. parks, water parks, playing indoor or outdoor, malls, arcades New toys and devices
No noteworthy complementary factors
• Partners from trade fairs (November 2015 – indefinitely) • Partners from the construction industry (specifically Public-Private
Partnerships) (November 2015 – Indefinitely) • Municipalities & government entities (June 2016 - Indefinitely)
Contact:
Recommendations
• CSR • Wooden playgrounds
Aditionally:
• Email and call • Physical meeting
How:
Questions to potential partners Who do you supply most within the playground industry (Schools, construction companies etc)?
Wer wird im Rahmen der Spielzeugindustrie am ehesten von Ihnen versorgt? (Bsp. Schulen, Bauunternehmen etc.)?
Which regions do you supply most? Welche Regionen werden am meisten von Ihnen beliefert?
What are your distribution channels?
Was umfasst Ihre Vertriebswege?
Could you give us an example of a project you are most proud of?
Gibt es ein Projekt auf welches ihr Unternehmen besonders stolz ist?
How many projects have you conducted in 2014 and 2015?
Wie viele Projekte hat Ihr Unternehmen im Jahr 2014 und 2015 durchgeführt?
How many installation teams do you have?
Über wie viele Installationsteams verfügen Sie?
Could you explain what you expect from the partnership with Vinciplay for the future?
Was erwarten Sie sich von der Partnerschaft mit Vinciplay und was erhoffen Sie in der Zukunft zu erreichen?
What is the value added Vinciplay could bring to our potential cooperation?
Welchen Mehrwert würde Vinciplay im Rahmen einer möglichen Kooperation bringen?
Private Public Partnership Germany schools are seen to be long overdue with their renovations
Money is missing for schools to be renovated.
Due to ‘Public Private Partnership’ the renovations are made possible.
The experiment started in 2007, in Frankfurt, including 4 schools.
Hochtief, took the responsibility for the next 20 years, to be in charge of the building, renovating, and investing 250 million euros.
In return for this, the city pays the company a 13 million Euros lease payment.
Construction company needs to guarantee quality for the next 20 years (Vinciplay even offering 30 years of quality guarantee)
• Barriers to entry are relatively low • There is no need of high initial investment nor difficulty in obtaining raw materials
or accessing distribution channels
Threat of New Entrants: Medium
Intensity of Rivalry: High
• There is no significant treat that customers can affect the price of the products. • However since the products is quite similar to the ones offered by other companies
and it is try to differentiate this kind of products, the price can play some role
Bargaining Power of Buyers: High
Threat of Substitutes: Medium
• There are many suppliers of raw materials for playgrounds equipment • Materials can be also shipped from other countries as some US companies already
practise
Bargaining Power of Suppliers: Medium
Complementary Products: Weak
Big and well-established players in the market Strong rivalry is also visible in innovative solutions of those companies, as there are customized products and playgrounds made of recyclable materials Competition is even stronger for companies outside the US, since it seems that the “Made in USA” claim is very welcome. High pressures of safety standards of playgrounds.
Parks, water parks, playing indoor or outdoor, malls, arcades Toys and new devices are indirect substitutes and may not cause playgrounds not to be constructed, at least in the medium-term future in our assessment.
One can say that complementary factor for playgrounds equipment’s are the number of green space in cities what depends on the decisions of city councils
• Partners from trade fairs • Partners from the construction industry • Municipalities & government entities
Contact:
Recommendations
• CSR • SMART playgrounds • Assembled in U.S.A.
Aditionally:
• Email and call • Physical meeting • Warehouse (average cost 53,
815$ for 1000m2)
How: