Russian Market Entry Strategy

Драйв созидания

Исследовательско-консультационная фирма «АЛЬТ»

«Разработка стратегии» Описание услуги


«Development of Russian Market Entry Strategy»Service Description

Drive of Creation

ALT Research & Consulting Company


Why Enter into Russian Market? Development of Russian market entry strategy

Drive of Creation

Fast-Growing

Large

Profitable

Hit the ceiling

Highly competitive

Russian market

European market


• Growth rates of mature European market decline• Competition on European market grows strong

• Russia has three credit ratings of investment level (Fitch, Moody’s, S&P) and the trend is positive• Russian non-extractive companies show excellent financial statements and place their shares on the main foreign stock exchanges• Russia shows growth in the living standard • Russia is planning to join to the WTO in the nearest future


Examples of The Companies Successfully Entered on Russian Market

Development of Russian market entry strategy

Drive of Creation

Ehrmann yogurts first appeared on the Russian market in 1995. By 1997 the sales in Russia reached 100 million German marks, and the company owners decided to launch production in Russia. The first brick of new plant was laid in the Ramenskoe district in September 1998. In eight years after Russian market entry, Ehrmann’s dairy plant managed to become one of the three leaders on the yogurt market not only in Russia, but also in Ukraine, Belarus, and Kazakhstan, supplying its products to all countries of the former Soviet Union.

Kingfisher is the leading home improvement retail group in Europe and Asia. The UK-based DIY group has (already) four stores in Russia, trading under its Castorama brand. The first Castorama store opened in Samara in February 2006. Kingfisher plans to open 50 stores in Russia over the next 10 years, with the aim of becoming market leader in the Russian DIY market.

FM Logistic is European logistic operator, successfully (working) on Russia(n) market since 1994. FM Logistic manages 8 warehouses in Moscow and Leningrad regions, Rostov, Yekaterinburg, Irkutsk, Khabarovsk and Vladivostok, and ranks among the largest logistic operators in Russia.

TELE2 is European holding providing a broad range of telecom services in fixed and mobile telephony, Internet, high-speed data network services and cable TV. Nowadays the company has 29 million customers in 21 European countries. In Russia TELE2 render GSM mobile services. The first TELE2’s GSM network was launched in Irkutsk in 2003. Today TELE2 is operating 16 regional networks in Russia.

Many large multinational companies successfully operate on Russian market for a long time. Recently middle-sized European companies draw their attention to Russian market. There are many examples of European companies, which enter on Russian market successfully. Some of them:



Possible Market Entry Strategies Development of Russian market entry strategy

Strategy to choose: key aspects

Export

Cost leadership

Mass market

Independent entry

Drive of Creation

Domestic partner

Local production

Focus

Premium segment

or

or

or

or

“Think hard about the appropriate entry strategy - joint venture, representative office, greenfield investment, or acquisition. The complexities of acquiring and building on land might make it more appropriate for retailers or other businesses requiring a lot of real estate, for example, to take over a Russian business.“FINANCIAL TIMES REPORT “Investing in Russia: rules of engagement for foreign companies”, Oct 11, 2005



Work Directions Development of Russian market entry strategy

Market volume and tendencies

I. Industry analysis

Customers characteristics, segments

and niches

Market structure

Business-models of market leaders

II. Competitive analysis

Competitors' products features

Benchmarking of main business indicators and

business-processes

Main features of distribution channels

III. Distribution channels analysis

Negotiations with potential partners and

industry experts

Profitability and volume of investments estimate

IV. Market entry strategy

Market entry options

Brand portfolio

Positioning and pricing

Distribution and promotion

Drive of Creation

Market threats estimate Competitive risks estimate

Sales geography analysis



What Does Client Get as Result of The Project?

Market Entry Strategy

Contacts with potential partners and clients

Russian market understanding & risk

reduction

Plan of actions to enter to a Russian market


Distribution channels

Drive of Creation

Well-grounded sales forecast



Our Network in Russia Development of Russian market entry strategy

Drive of Creation

Our partners

in Russia

Government institutions

Entrepreneurial clubs

Investment funds

Consultingcompanies

Business associations

Industry associations

Past and present clients


Research companies


International partners Development of Russian market entry strategy

In order to offer (our) client the best ideas and decisions, we study the world’s best industry practice and invite foreign experts to our projects. Cooperation with the foreign companies and experts allows us to get well-grounded viewpoint on problem we solve, and to use new knowledge and competences of our partners. ALT R&C maintains close relations with a number of the international consulting companies and private experts.

MACONET

Technology Market Strategies. International consulting company, specialized in research, strategic consulting and market analysis of developing countries (Asia and Eastern Europe). We’ve carry out a great number of co-projects with colleagues from «Technology Market Strategies» for companies such as “SUEK” (“Sibirskaya Ugolnaya Energeticheskaya Kompanija”), “Silovije mashini”, “Brok-Invest-Service”, Russian Federal Nuclear Center – VNIIEF.

Dürr is one of leading world suppliers of systems, services and production for motor industry. In cooperation with experts of company Dürr we’re making a project of development a strategy and technological structure for company “AgroEvroSoyuz”.

Management Consulting Network (MACONET). The Eastern European association of consulting companies. ALT R&C (maintains) close mutual relations with members of MACONET, in particular with the largest Eastern European consulting company " AAM Management Information Consultant Ltd. ", specializing on IT and management consulting.

The Coverdale International Group. The international training and consulting company. The group includes consulting and training companies in Russia, Austria, the Great Britain, Germany, the USA, Czech Republic and Switzerland. Cooperation (of) ALT R&C and Coverdale actively develops in sphere of trainings and sessions for proprietors and top-managers.

FEACO is European Federation of Management Consultancies Association, the umbrella organization for 23 national management consultancies associations. There are no Russian association in this federation, but ALT R&C collaborate with FEACO and head Russian association, which plans to become FEACO member.

Drive of Creation



Some of international projects

Analysis of Russian market of trucks and of prospects of key segments development on this market for company “Volvo Truck”

Analysis of Russian market of industrial diesel engines for company “Volvo Penta AB”

Market research of energy-saving technologies market in Russia for the European Bank for Reconstruction and Development. (in cooperation with English consulting company AEA Technology - leading international advisers in the field of power and ecologies of policy.

Examination of market strategy and operational efficiency of Company " Vyso" for the European Bank for Reconstruction and Development. ( in cooperation with Technology Market Strategies)

The analysis of tendencies, structure and business-models of European and US logistic companies within the development of strategy for company “Asstra – Associated Traffic AG”

Feasibility report of x-ray diagnostic installations manufacture for a company “Ravenstvo" - joint manufacture with Siemens AG

The analysis of pricing strategies of the European brick manufacturers within the project for " Pobeda LSR “

The analysis and search of the perspective markets of plywood in the EU countries, the USA and Japan within the project for " United Panel Group"

The strategy of an entry to the European market of linen fabrics and bed-clothes for company " Dominion “

The analysis of tendencies, structure and business-models of the European market of lady's clothes for " Melon Fashion Group “

Drive of Creation




Aerospace industry

Industry Experience

Drive of Creation


Food industry Textile and apparel

industry

Automotive industry Retail

Distribution and logistics

Machinery

Construction and constructional

materials

Forestry and woodworking industry

Extractive and metallurgy industry

Engineering

Petroleum and chemical industry



Our Russian clients





Drive of Creation

199106, Saint-Petersburg, V.O., 21st line, 8.

Tel: 7-812-324-87-31Fax: 7-812-324-88-39

E-mail: [email protected]

115114, Moscow, Derbenevskaya str., 1/2, bldng. 1

Tel: 7-495-788-59-29 Fax: 7-495-788-59-29

E-mail: [email protected]

www.altrc.ru

THANK YOU FOR YOUR ATTENTION! Development of Russian market entry strategy
