Synopsis Session 3: Conquering New Markets

Transcription

1 Synopsis Session 3: Conquering New Markets Presented by Main Speaker Mr. Samantha Kumarasinghe Panelist Ms. Sheamalee Wickramasinghe Panelist Mr. Dinesh Saparamadu

2 Synopsis Session 3: Conquering New Markets Due to globalization and economic liberalization, organizations face fierce competition from their global counterparts. Therefore, innovation is no longer an option but an integral part of their business strategy. In a complex and highly competitive global market, companies have to innovate and develop commercially viable products and services faster than ever. To meet these new challenges, companies adopt new approaches to their innovation strategies and processes. Confronted with increasing global competition and rising research and development (R&D) costs, companies can no longer survive on their own R&D efforts but look for new, more open, modes of innovation. This session will look at the increasing importance of open innovation in companies involved in international marketing, and the role of policymakers in creating a conducive environment that promotes innovation.

3 Session 3 Conquering New Markets Presented by Samantha Kumarasinghe Chairman/MD Nature s Beauty Creations Limited

4 Unique Invention in China in 9 th to 11 th Centuries Gave the real meaning to Conquering GUN POWDER

5 13 th Century - Mongol Conquering of Asia Emperor Genghis Khan ( ) 15 th Century Development of Artillery 17 th Century - Early Modern Warfare European Conquering of countries

6 Conquering Markets To become very successful in a market to buy/acquire, sell or both Ethical Conquering Unethical Conquering

7 17 th to 19 th Century Unethical Conquering Invade a country, conquer land Loot and take away the wealth Conquer the market Export to the captive market

8 Sri Lankan Example Establishing British Brands with a monopoly Free Advertising - Brainwashing us to think that We Cannot Taking over land Growing Export Crops Ban on Toddy Tapping Introduction of Foreign Alcohol

9 20 th Century Era of Trade Agreements Global Trade Agreements : GATT WTO 1995 to date Political Security : For Market Access Bilateral/Regional : FTA & Economic Partnership Both Ethical and Unethical conquering could take place. Mostly in favour of stronger players

10 Disadvantages for Sri Lanka (Ceylon) 1947 Commitment given to GATT on Milk/Milk Powder imports Maximum Tariff Binding on Agricultural Produce Country Percentage India 114% Malaysia 83% Sri Lanka 50%

11 Theory of Free International Trade David Ricardo ( )

12

13 Protests in Sri Lanka

14 21 st Century Creation of : New Value for democracy/freedom Religious or ethnic division Regional leaders for self rule

15 Libya Population m 2010 Size of Economy USD 80.9 Billion Per capita income USD 12,400 Civil War 2011 Size of Economy USD 37.4 Billion Per capita income USD 5,700 Source RT.com/business

16 For more information read the following book Confessions of an Economic Hit-Man by John Perkins

17 Part two Innovative and Ethical Conquering of Markets

18 Invention Creation of something totally new Creativity Ability to create new ideas and things Innovation Implementation of something new

19 Business Innovation Creation of substantial new value by creatively changing one or more dimensions of the business Not just new products and technologies but also new ideas across the entire value chain

20 DELL Did not innovate in R&D Innovated on their Supply Chain Management Became an extremely successful computer manufacturer Nokia Nokia did not make the first mobile phone, Motorola did Innovative designs and features made Nokia the world s largest mobile phone maker But failed to continue innovation and lost its dominance when smartphones were introduced

21 Samsung Apple commercially introduced the first smartphone But now Samsung is the market leader in smartphones with almost 32% market share in 2013 Innovatively entered into memory products World leader in memory chips such as DRAM and NAND A distinctive advantage over Apple; Apple is one of Samsung s largest customers for memory chips

22 Examples of market conquerors Sri Lankan and Foreign Companies that I have visited

23 Founded by Mr. Merrill J. Fernando in 1974 Single Origin Tea Concept of Fresh from the Source to the Cup First Producer Owned Tea Brand Most Integrated Family Owned Tea Company in the World plantations, tea brokering, packaging, etc Sold in over 90 countries One of the Top 10 Tea Brands in the World

24 Samsung Electronics 1970 : Introduced their first black & white TV, Sanyo Samsung 1980s : Invested in Innovative Semiconductor manufacturing 1993 : Leading memory semiconductor chips manufacturer 2008 : Became the World s Largest Electronics Producer 2010 : Sales USD Billion Profit USD Billion 2012 : Sales USD Billion Profit USD Billion 2013 : Est. Sales USD 200 Billion Est.Profit USD 35.8 Billion (Source: Samsung/Thomson Reuters)

25 (Source Samsung Annual Report 2012) DRAM chips are memory chips widely used in personal computers, tablets and smart phones, and Samsung is the largest supplier of such chips. It is believed that memory chips will drive most of Samsung's growth in the future. (Source Financial Times)

26 Hyundai Heavy Industries (HHI) 1973 Entered Ship Building Industry with no technology and experience Korean Won 500 note

27 Design of 400 year old Kobuk Son Turtle Ship Chairman said - Ship building is in Korean DNA

28 Ulsan Beach South Korea -1972

29 Growth of Hyundai Heavy Industries (HHI) 1983 Ranked World s number one ship builder 2005 Built the largest propeller in the World-107 Tons 2010 Total sales : USD 21.2 Billion Profit after tax : USD 3.54 Billion 2012 Total sales : USD 23.3 Billion Profit after tax : USD 1.03 Billon Source : HHI web page

30 Ulsan in 2010

31 Today South Korea has the top 4 ship builders in the world source : Marineinsight.com

32 Top 5 ship builders 1. Hyundai Heavy Industry Ulsan, South Korea 2. Daewoo Shipbuilding Okpo, South Korea 3. Samsung Heavy Industry Geoje, South Korea 4. Hyundai Samho Samho, South Korea 5. Mitsubishi Heavy Industry Nagasaki, Japan

33 Closed Innovation and Open Innovation

34 Closed Innovation Only using internal resources for R&D and innovation Open Innovation Using external and internal ideas, and internal and external paths to market External ideas & technologies can be brought into the firm s innovation process Internal ideas & technologies can be commercialised through outside pathways

35 The Closed Innovation Model Source: MIT Sloan Management Review

36 The Open Innovation Model Source: MIT Sloan Management Review

37 Benefits of Open Innovation Accelerates time to market Enables innovation in areas beyond the firm s specific areas of expertise Creates new revenue streams for the company

38 Disadvantages of Open Innovation Intellectual property ownership issues Possible lack of trust between parties Can sometimes be costly

39 Examples of Open Innovation P&G Connect & Develop open innovation programme More than 2,000 active agreements with innovation partners Now over 50% of P&G product initiatives involve significant external collaboration By 2015 they expect external collaboration programmes to be responsible for more than $3bn per annum in new business Source: P&G Connect & Develop website & P&G website

40 Examples of Open Innovation (contd.) General Electric (GE) had an online Open Innovation Jet Engine Bracket Design Quest Invited individuals, companies and institutions to redesign loading brackets found on jet engines using 3D printing Nearly 700 global design entries sent from 56 countries Source: The Wall Street Journal

41 Examples of Open Innovation (Contd.) Rolls-Royce launched its India Open Innovation program : An online forum to share best practices and ideas To identify technologies or techniques in industries outside of which Rolls-Royce usually operates, and in small and medium sized companies Rolls-Royce does not currently work with Source: First Post

42 Examples of Open Innovation (Contd.) External software developers make apps for smartphones, increasing the importance and value of smartphones

43 Part Three My Experience in Innovation

44 Last but not Least If you want to conquer markets You have to believe We Can

45 THANK YOU

46 Synopsis Session 3: Conquering New Markets Session (Number) SESSION Main Speaker TITLE The speech was initiated with a discussion on the meaning of conquering new markets. According to Mr. Samantha Kumarasinghe s definition there are two types of conquering Ethical Conquering and Unethical Conquering. Unethical Conquering Sri Lanka faced unethical conquering during the British occupation of Sri Lanka. During that period may British-founded companies role to prominence which resulted in large monopolies for each industry. However, as the world has opened up to globalization many of these large brands are failing largely due to a lack of innovation and not being able to adapt to the current market. Further, the mindset of the locals of the country was swayed toward cannot as opposed to can. This perceived mindset was further cemented with the signing of several unfavorable trade agreements with other countries.

47 Synopsis Session 3: Conquering New Markets (Contd.) Session (Number) Ethical Conquering SESSION TITLE In ethical conquering both parties should derive benefit from the arrangement, companies like Hyundai and Samsung have significantly grown over the past few years due to effective ethical conquering strategies. When examining innovation there are two categories: Closed Innovation and Open Innovation. In Closed Innovation only internal resources are utilized for research and development and other innovation activities. However, in open innovation companies utilize external and internal ideas/resources, and internal and external paths to target the respective market. There are several advantages and disadvantages of open innovation, with one main advantage being that innovation can occur rapidly. Mr. Samantha Kumarasinghe highlighted his business journey as an example of how one can innovate to ensure a specific market is conquered. Mr. Samantha Kumarasinghe started his business in the apparel industry and shifted to beauty creation product industry thereafter. Further, he highlighted that as a developing country we have a staggering amount of imports, we as a country should look at innovating some of our local products and push those products to overseas markets.

48 Synopsis Session 3: Conquering New Markets (Contd.) Session (Number) Panelist SESSION Ms. Sheamalee TITLE Wickramasinghe It was emphasized that while Sri Lanka is a small country we need to place greater emphasis on looking overseas for greater customer bases. She outlined her company s innovation process towards meeting the changing needs of customers both locally and internationally. Further, she stated that while innovation in the product is a key driving force of success without innovation in the management practices a company would eventually stagnate. Panelist Mr. Dinesh Saparamadu Mr. Dinesh Saparamadu initiated the speech with a background of the industry his company operates in and how innovation has affected this industry. Further, it was outlined that in order to conqueror a particular market we as business leaders should understand the market behavior in order to identify any potential customer base not being supplied to and leverage on that weakness in the market.