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3̲ ̲ ̲E̲X̲P̲O̲R̲T̲ ̲S̲T̲R̲A̲T̲E̲G̲Y̲ ̲P̲L̲A̲N̲
3.1 O̲V̲E̲R̲A̲L̲L̲ ̲M̲A̲R̲K̲E̲T̲I̲N̲G̲ ̲S̲T̲R̲A̲T̲E̲G̲Y̲
Launching a new product on a new market is probablythe
most difficult strategy to implement sucessfully -
which is why so many companies fail it.
In this case, the following assumptions are made, to
which the selected strategy must correspond:
(1) the market is large in size
(2) the market isunaware of the product brand
(3) buyers will be concerned about cost justification
(i.e. be price sensitive)
(4) there is very strong potential competition
(5) the market is very regulated and difficult to penetrate
(6) the company's unit mnufacturing costs fall with
the scale of production and accumulated manufacturing
experience
Ideally, that scenario calls for a low price and heavy
promotion to bring about a fast rate of market penetration.
But section 2.1 clearly stated that th capital and
manpower resources to do so do not exist in SG today.
Taking an alternative route, still acknowledging the
six assumptions, must mean building the entree on CR's
current strengths.
The main strengths lie in product concept uniquenss,
an impressive corporate track record, three established
subsidiares in the market plus the recent joint venture
with a major U.S. company CR's contracts with American
Airlines and Air Canada and related cooperation with
RCA, the NATO Contract, nd - very important - CR is
a highly flexible company, able to respond differently
to different customers' needs - which many of the established
competitors are not.
Those five factors must be exploited best possible
throughout the forthcoming saes planning.
3.2 T̲A̲R̲G̲E̲T̲ ̲G̲R̲O̲U̲P̲S̲
Initially, the strategy will be to aim for the governmental
and defence institutions and departments.
The market for X-Net in its present version is to be
foud in dp environments with more than 30 (asyncronous)
terminals installed.
It's a definite advantage if the customer in question
are in a certain stage of growth, or at least his number
of workstations is increasing fairly quickly.
Furthermore, he X-Net sale should will focus on processor
sites with dp equipment of different makes, say a mix
of IBM, DEC and WANG.
Another indicator of LAN needs could be the presence
of headquarters with a number of sizable branch offices,
looking for way to implement fast and easy screen-to
screen communication.
In the past CR-CORP has quoted on a lot of RFP's which
have been received either from (typically) DoD or a
potential main contractor. CR-CORP has had little (not
to say no) influence on he system/solution requested.
In order to rise the chances of winning contracts to
a reasonable level, this situation must change. The
only way to do this is to concentrate resources against
clear objectives, i.e. put more professional effort
in th direct sale of a well defined product mix to
a well defined customer mix.
Typical customers are:
- DCA offices
- Navy Laboratories
- NASA Research center
- USAF
Initially, a major thrust will be put on direct sales
only, but the possibiliy of establishing OEM contracts
should not be excluded. This could either be with systems
(soft and/or hardware) houses or with hardware manufacturers
in the computer or terminal business (see further below).
3.3 M̲A̲R̲K̲E̲T̲ ̲E̲N̲T̲R̲Y̲ ̲D̲E̲C̲I̲S̲I̲O̲N̲
So far, CR's international market entry strategy has
been to make direct investments on the overseas markets
(as opposed to operating via distributorsdealers on
the Continent).
Foreign distribution channels should be kept shortest
possible, having as consequence high investment ratios.
So in accordance with this policy, CR-CORP (CR-DC)
as indicated above will concentrate on direct sales,
andthis will primarily take place in the Washington
area during the first 4 month sales cycle.
The possibility of systems houses as LAN distributors
will doubtless arise very quickly, and provided attractive
terms are being negotiated, they will recive some attention
- but they are of second priority. And exclusivities
are of course out of the question.
3.4 O̲R̲G̲A̲N̲I̲Z̲A̲T̲I̲O̲N̲
Referring to this report's section 2.1, the transferee
(TMY) is the first of a new breed in CR-CORP, so to
speak.
Organizationally, he will be responsible for he G&DOA
Division of CR-CORP. It is of great importance for
the success of the operation that SG appoints a manager,
responsible for the daily contact and CR in-house support
and follow-up.
̲ ̲ ̲ ̲ ̲
CR-DK
̲ ̲S̲G̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲
C̲R̲-̲C̲O̲R̲P̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
G&DOA CR-DC
̲T̲M̲Y̲ ̲ H̲K̲W̲/̲T̲M̲Y̲
̲ ̲ ̲ ̲ ̲
G&DOA
̲T̲M̲Y̲ ̲
F̲i̲g̲u̲r̲e̲ ̲G̲&D̲O̲U̲ ̲d̲i̲v̲i̲s̲i̲o̲n̲ ̲i̲n̲ ̲C̲R̲-̲C̲O̲R̲P̲ ̲(̲C̲R̲-̲D̲C̲)̲ ̲a̲s̲ ̲o̲f̲ ̲A̲p̲r̲i̲l̲ ̲1̲,̲ ̲1̲9̲8̲4̲.
Presently, no know-how within OA (or X-Net for that
matter) is available neither in CR-CORP or in CR-DC.
The lack of thisknow-how is not considered to be a
major draw-back. But it is very important that the
present sales managers (BRW,HKW) has good contacts
(sales channels) within G&D so that they, in close
cooperation with TMY, can break down the right doors
enablin CR to enter the marketplace fast.
3.5 P̲R̲I̲C̲E̲ ̲P̲O̲L̲I̲C̲I̲E̲S̲
It has beeen agreed that the transaction price between
…02…CR and CR-CORP for X-Net components will be the Danish
BLP price in Dkr. less 22%, delivered CIF. This onforms
to the U.S. Arm's Length priciple legislation.
The base rate of exchange to establish the U.S. retail
price list is 9.50.
Having made no clear price studies of the LAN market
in the U.S., we have to base our preliminary list prices
in ollars on a simple conversion from the Danish market
prices (cf. "Microproducts Pricelist"- REF 84/1 BLP).
The U.S. list prices will only be quoted in connection
with actual configuration proposals (in written).
Rebates in the U.S. are not to b given by CR-CORP under
any circumstances, unless they have been authorezed
by SG in Copenhagen (however, recall that no detailed
price studies have been made on competitors' pricing
in California).
Sales terms will be negotiated from case to cas, depending
on the type of order or letter of intent. Principly,
orders which require no software development in particular
will be charged COD. But in cases where CRAS has to
develop dedicated software solutions, a sum of money
will be requested bfore start - say standard project
terms (1/3 + 1/3 + 1/3).
Realistically, we have to adopt a policy in line with
local common practice.
P̲r̲e̲l̲i̲m̲i̲n̲a̲r̲y̲ ̲U̲.̲S̲.̲ ̲R̲e̲t̲a̲i̲l̲ ̲P̲r̲i̲c̲e̲ ̲L̲i̲s̲t̲
X̲-̲N̲e̲t̲ ̲C̲o̲m̲p̲o̲n̲e̲n̲t̲ U̲.̲S̲.̲ ̲L̲i̲s̲t̲ ̲P̲r̲i̲c̲e̲
̲(̲$̲)̲
XCT 3.870
XTA 685
XHA 875
XWO 110
XAB 2.155
XTP/4 4.380
XTP/8 6.540
XTP/12 8.775
XEP 6.540
XCP 6.540
XNA 10.480
Cable (100m) 139
CR5 1.315
CR7 Terminal X-Net interface 2.107
CR16 Diplomat X-Net interface ?
DP200 2.050
Microlie 84 1.480
X̲-̲N̲e̲t̲ ̲s̲o̲f̲t̲w̲a̲r̲e̲
XCT s/w license 1.579
XEP s/w license 1.579
XCP s/w license 1.579
XNA s/w license 3.158
For the sake of good order (and included above):
. The U.S. import duties are for X-Net components
sold on the commercial market (BTN 84.55.960) 4.4%
on the FOB value and for X-Net add-ons 4.7% on
the FOB value. No duties shal be paid for X-Net
sold on the G & D market.
2. The consolidated airfeight rate CPH-LA and CPH-WA
is Dkr. 12-15 per kilo, depending on quantities
shipped at a time (delivery time 3 days).
3. Insurance is 0.2% of the invoice value plus 10%.
3.6 P̲R̲O̲M̲O̲T̲I̲O̲N̲ ̲P̲R̲O̲G̲R̲A̲M̲
The promotional tools available are many, and it's
relevant to view the role of four components:
** personal selling
** advertising
** sales promotion
** public ralation
It is important at this stage to conceive that CR-CORP
(CR-DC) (or CR for that matter) is completely unknown
on the U.S. market today. Supposedly, CR-CORP does
not have to build up or stimulate product awareness
on the market (ANs), but should concentrate on the
unique concept (brand awareness).
A rough percentage allocation of promotional funds
to achieve sales by means of building up brand awareness
- taking into consideration the limited capital and
manpower resourcs - should be:
Percentage of Promotional
̲ ̲ ̲ ̲f̲u̲n̲d̲s̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲t̲o̲o̲l̲s̲ ̲ ̲
60% Personal selling
10% Advertising
20% Sales promotion
0% Public relation
Facing the fact that CR-CORP (CR-DC) has no existing
customer base to cultivate, a substantial number of
agressive personal sales calls by TMY/HKW/BRW must
have top priority in the efforts to penetrate the market.
Advertising first and foremost direct mail shots, will
precede the direct sales. But paralel, advertising
in highly specialized magazines and circulars would
have a very positive effect on the sales work.
Advertising will also involve such varied media as
atalogs, manuals, company and product slide presentations,
company and product foil presentations, brochures and
circulars - all believed necessary back-up to succeed
in the personal selling. As are 1983 Annual Reports!
The typical action pattern will be: Name and contact
from address list - Direct Mail shot - Follow up phone
call - Personal call with a) Company and product slide
presentation b) onfiguration discussions - Follow up
letter with product and company information material
- Checking configuration needs with Copenhagen where
doubt - Second personal call - Written proposal - Negotiations
- (if positive) Letter of intent/order. Seinars could
fit in anywhere.
Pilot installations as a means to obtain the letter
of intent or order would apparently seem attractive.
Sales promotion (exhibitions, show-rooms, demonstrations,
displays, contests, and various and sundry other nonre-current
selling efforts not in the ordinary routine) plays
a critical role in the introductory stage of a product
launch.
Particularly the role of seminars is important. These
could either take place in-house or externally, say
on conference fcilities or hotels. These would require
careful preparations in advance, but could offer a
bunch of potential clients " the big show" and preferably
the chance of meeting CR's top management as well as
CR's product managers
E̲x̲h̲i̲b̲i̲t̲i̲o̲n̲s̲:
Probabl the most effective way to enter the marketplace
is exhibiting " the big show," backed up by direct
mail campaigns.
Of interest, but not analyzed yet, is:
Federal Office System Expo March, 1984
Federal Office Automation ConferenceSept/Oct, 1984
Federal Computer Conference Sept, 1984
D̲E̲M̲O̲ ̲N̲E̲T̲:
It must be decided to install X-Net in CR-DC and CR-CORP,
integrating as much of the company's dp equipment as
possible - i.e. CR5, CR32 and CR16. This installation
wll serve as demo net.
However, for the sake of mobility, a beam with XWOs
mounted should also be provided; to be used for out
of house seminars or exhibitions until a more presentable
solution has been found.
The demo net in CR-CORP and CR-DC should initially
consist of one XCT with selfconfigurating software
and floppy drive, one XNA with standard network management
software 1 CR5 unitelligent screen terminal (with built-in
XTA), 1 CR32, 1 CR16, a TEC daisywheel printer, plus
a number of XTAs and XWOs. No XABs or ports can be
shown during start up.
Suggestably, a DEC VT-100 and a Televideo or Hazeltine
screen is bought locall to give the demo net a slightly
open look.
Public relation, such as planting news stories, updates
(*) and features about X-Net and its entree in the
U.S. G&D market in published media is important. But
reaching the press requires the right connctions which
may thake some time (and money), but it will ceertainly
be worthwhile.
The four instruments outlined here have overlapping
elements, and their effective coordination require
careful planning on site as well as support from copnehagen
(*) Product enhancement announcements…86…1 …02… …02…
…02… …02…
3.7 R̲E̲P̲O̲R̲T̲I̲N̲G̲ ̲R̲O̲U̲T̲I̲N̲E̲S̲
The communication flow between CR-CORP (CR-DC) and
SG in Copenhagen will be of outmost importance for
the success of the proposed G&DOA venture in U.S.
Te pricipal uses of the actual reporting are to:
1. Keep SG management
informed of the status
of the sales activities
and monitoring market
response.
2. Ensure CR-CORP (CR-DC)
the best possible technical
and marketing back-up
to support field wok.
Considering the extremely tight resource situation
in CR-CORP, SG will not expect highly structured, exhaustive
reports at short intervals. Rather, the flow from CR-CORP
on a daily basis is expected to consist of prospect
profiles and technica questions, and then on a monthly
basis a summary of events will be compiled (number
of sales calls, in-house demos, cold-warm-hot leads,
competitive intellingence, market forecasts, etc, etc).
The intendedly most used communication means (in addtion
to the phone) is the established fax connection between
the offices in the U.S. and Denmark. TMY and GJ have
agreed to have phone discussions at least once a week.
3.8 A̲P̲P̲R̲O̲V̲A̲L̲ ̲P̲R̲O̲C̲E̲D̲U̲R̲E̲S̲
The X-Net components will have to be approved by Underwriters'
Laboratories (UL) before any installations can take
place in U.S.
The switching power suplies (in/external ones), the
cabinets and the components inside need UL Listing
or Classification - thus of course conversion to 115
volt/60 Hz and U.S. mains outlet fitting soonest. The
importance of this matter connot be stressed enough!
Furthemore, as of October 1, 1983, all electric/electronic
products sold in the U.S. must abide by FCC certifications
on RFI limits. X-Net components can be FCC certified
by Elektronikcentralen in H]rsholm (power supplies,
cabinets and the bus).
UL appoval must be a corporate issue (QA), for which
reason CR should certainly make the investment of having
a UL officer sent over to discuss the matter in details.
The classification procedure is reasonably detailed
in "Markedsorientering USA", Septmber 1980, Danish
Foreign Ministry, to which the responsible persons
should confer.
3.9 I̲N̲S̲T̲A̲L̲L̲A̲T̲I̲O̲N̲,̲ ̲M̲A̲I̲N̲T̲E̲N̲A̲N̲C̲E̲ ̲A̲N̲D̲ ̲U̲S̲E̲R̲ ̲G̲U̲I̲D̲A̲N̲C̲E̲ ̲C̲O̲U̲R̲S̲E̲S̲
Due lack of resources in SG, these - although crucial
- points will have to be solved pending commitment
from potential U.. customers.
Hardware maintenance and service contract general conditions
will be quoted as per latest price list from SG Copenhagen.
Existing CR-CORP personnel MIGHT after a training period,
be able to assist in this respect, but regardless,
thepricelist calculations will be used (even if CR
have to fly out soft- and hardware people to cope with
the task!). CR-DC has no back-up personal at all, short
term sale will therefore require investments in support
personel.
Delivery time will bequoted as 2-6 months, depending
on actual order configuration. Priority of course given
to off-the-shelf commodities.
CR-CORP will not carry stock of X-Net components or
spare parts during the start up period.
It's important to note that specifcally installation,
after-sales maintenance and user guidance courses are
used as primary sales parameters by X-Net's major competitors.
4̲ ̲ ̲T̲A̲C̲T̲I̲C̲A̲L̲ ̲P̲L̲A̲N̲
4.1 A̲C̲T̲I̲O̲N̲ ̲S̲T̲A̲T̲E̲M̲E̲N̲T̲S̲
N̲o̲.̲ A̲c̲t̲i̲o̲n̲ ̲i̲t̲e̲m̲ I̲n̲i̲t̲i̲a̲t̲e̲d̲ F̲i̲n̲i̲s̲h̲e̲d̲ C̲h̲a̲r̲g̲e̲
1 Foi presentation TBS TMY
2 Slide presentation TBS TMY
3 2 year working permit TBS TMY
4 Press release text TBS TMY
5 Press release TBS TMY
6 Documentation shipped TBS TMY
7 U.S. Business Plan 84 l3.02 TMY
8 Demo net configuration BS GJ
9 Demo net shipment TBS TMY
10 Demo net installation TBS TMY
11 TMY departure date TBS TMY/GJ
12 Customer identification TBS TMY/HKW/BRW
13 1st D.M. preparation TBS BUREAU/TMY
14 1st D.M. shot TBS TMY/
15 Direct sales TBS TMY/KW/BRW
16 1st seminar TBS TMY/HKW/BRW
17 1st monthly report TBS TMY
18 Ad campaign TBS GJ
19 2nd D.M. preparation TBS BUREAU/
TMY
20 2nd D.M. shot TBS TMY/
21 2nd seminar TBS TMY/HKW/BRW
22 U.L. approval procedure ? ?
23 Hot prspects meeting I TBS TMY/GJ
24 Hot prospects Meeting II TBS TMY/GJ
It goes without saying that there are a lot of other
sales activities - sparked off from the above-mentioned
strategic guidelines - that are difficult to time table
at this moent.
Any major changes in the timing or specific action
items (new ones or changes) should be reported to and
agreed with SG Copenhagen.
5̲ ̲ ̲Q̲U̲A̲N̲T̲I̲T̲A̲T̲I̲V̲E̲ ̲E̲S̲T̲I̲M̲A̲T̲E̲S̲
5.1 S̲A̲L̲E̲S̲ ̲F̲O̲R̲E̲C̲A̲S̲T̲S̲
SG's total budget for 1984 is Dkr. 157 million.
CR-CORP's (CR-DC) budget for 1984 is Dkr. 15 million
(equals 1983 result). X-et sales accounts for Dkr.
7.8 Million in excess of that figure.
During the very upstart cycle it's unrealistec to expect
any firm orders or commitments. But as was stated in
section 1.2, a̲n̲ X-Net letter or intent of order is
desirable within thefirst 4 months, i.e. in 3rd quarter
84.
The first order or firm commitment will in that case
be our second only reference installation in the U.S.
up and running: (CRCS is expected to have one installation
up and running spring 1984)
Based on tis goal, the CR-CORP budget, and this business
plan, the following breakdown on unit sales can be
made (see pg. 30).
It's important to note that the figures are based on
very limited information about the marketplace and
that CR-CORP will start of without any potential clients,
i.e. completely from scratch.
For that reason, the forecasted figures are revised
in accordance with the realistic prospects (higher
or lower) at the time of the first monthly report.
Below a list of identified major projects are given.
With the exception of DCA, CR can not expect main contractor
responsebility or any of these projects:
P̲r̲o̲j̲e̲c̲t̲ ̲N̲a̲m̲e̲ S̲t̲a̲t̲u̲s̲ V̲a̲l̲u̲e̲ C̲o̲m̲m̲e̲n̲t̲s̲
o NAVSUP RFP Sep 84 30 m $ broadband
coax LAN
IBM Burroughs,
Ascii.
5 year
project
50-100
sites
in US
200-1000
ports
per site.
Contact
Person
Marlne
Petersen
at CM
3, room
705
o Navy Labnoratories LAN 60 M $
Technical Office WS 150 M $
Automation & TOTAL 300 M $
Communication System
(NALTOACS) RFP Sep 84
o NAVSEA (PMS 306)
Program
o Dept. of the Navy
Office Automatin
& Communication
System (DONOACS)
o ONR Project
(ZOG/VINSON)
o CAEDOS (China Lake)
o Laboratory Office
Network Experiment
(LONS),USAF RFP June 84 50 M $
o Headquarters
Information &
Office System
(HIOS), USAF
o Impoved
Administrative
Capability System
(IMPACS),USAF
o NASA Integrated
Office Automation
system
o DCA Several
LAN OA
projects,
several
systems
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲X-Net US retail 3̲r̲d̲ ̲q̲u̲a̲r̲t̲e̲r̲ ̲ ̲4̲t̲h̲ ̲q̲u̲a̲r̲t̲e̲r̲
̲ ̲A̲l̲l̲Y̲e̲a̲r̲
c̲o̲m̲p̲o̲n̲e̲n̲t̲ ̲ ̲p̲r̲i̲c̲e̲ ̲(̲$̲)̲ ̲ ̲Q̲t̲y̲.̲V̲a̲l̲u̲e̲ ̲ ̲ ̲ ̲Q̲t̲y̲.̲V̲a̲l̲u̲e̲ ̲ ̲ ̲ ̲V̲a̲l̲u̲e̲
̲ ̲ ̲
XCT (*) 5.449 1 5.449 2 10898
XNA (*) 13.638 1 13.638 2 27276
XTA 685 100 68.500 200 137000
XHA 875 100 87.500 200 175000
XWO 110 220 24.200 440 48400
EP (*) 8.119 2 16.238 4 32476
XTP/12 8.775 5 43875 10 87750
Cabling 139 20 2.780 20 5560
CR5 (**) 1.315
CRl6(**) ?
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲
Note: (*) including s/w licences
(**) without disks XTA built-in
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲
Figure 4: CR-CORP sales forecast 1984
̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲
̲ ̲ ̲ ̲ ̲ ̲
