1

"LIVE" INTERNATIONAL BUSINESS PERFORMANCE AND CASE ANALYSIS IN COOPERATION WITH

PARTICIPATING BUSINESS EXECUTIVES OF A GREEK FIRM

George S. Vozikis, Ph.D.

Professor in Residence Chaminade University of Honolulu
Edward Reighard Endowed Chair in Management, California State University, Fresno (ret.)

EXECUTIVE SUMMARY

This is a template for a performance management and international strategic entrepreneurship case analysis
for selected and hand-picked Greek firms that have already exhibited a great deal of sustainability during the
horrendous recession that has befallen on the Greek economy. This sustainability most likely will also serve
as a testimonial for the potential and ability of these firms to grow and make it to the next level of operations
by making a quantum growth leap forward and by taking the lead for an extrication of the malaise that
permeates financially, physically, and psychologically Greek small firms nowadays.
This project should be conducted in three phases: The first phase, and the only focus of this course, will
consist of three components: An initial management audit component where the firms will analyze and answer
a What is? question regarding their particular state of affairs at this juncture of time and operations; then,
a What could be? question regarding their strategic alternatives for growth and international development
GIVEN the results of their management audit and their strengths and weaknesses, vis--vis the opportunities
and threats they face in their specific industry and competitive environment; finally, they will formulate a
strategy by answering a What should be? question, GIVEN the analysis of the strategic alternatives
presented to them for growth and international development during the previous analysis component.
The second phase should consist of an implementation of the results of phase one by the companies on their
own and with constant communication with the original facilitators online as needed, while the third phase
should be a feedback and review phase where the theme would be what did we do right and what did we do
wrong? It is believed that by kick-starting the potential of select Greek small firms in this practical and
firm-specific fashion instead of relying on broad government policies and guidelines and/or general
educational tutorials and classes that may not apply or pertain to the precise needs of a particular firm, will
create positive outcomes and productive results for the firms themselves and serve as a model for more of
the same for future series of similar kick-starting international business classes at AUEB.
 2
INTRODUCTION: TO GROW OR NOT TO GROW? THAT IS THE QUESTION!

This is a research project on the strategic performance audit and management as well as, a strategic
internationalization analysis for a Greek firm that has already exhibited a great deal of sustainability during
the horrendous recession that has befallen on the Greek economy. This sustainability most likely will also
serve as a testimonial for the potential and the ability for these firms to internationalize and grow by reaching
a higher level of operations, functions, sales, and profitability by making a quantum leap forward and by
taking the lead for an extrication of the malaise that permeates financially, physically, and psychologically
Greek firms nowadays. This performance management and internationalization case analysis will be
conducted in three phases:

The first phase, and the focal point of this course will consist of three components and involves an
initial management audit component where the firms will analyze and answer: A What is? question
regarding their particular state of affairs at this juncture of time and operations then; A What could be?
question regarding strategic alternatives for international growth and development GIVEN the results of the
management audit and the firms strengths and weaknesses, vis--vis the opportunities and threats they
face in a specific industry and competitive environment (see also Appendix II); finally, they will formulate a
strategy by answering a What should be? question, GIVEN the analysis of the strategic alternatives
presented during the previous analysis component.

Ultimately, but unfortunately beyond the scope of this course, it is hoped that the second phase for
the firms whose performance and internationalization analysis was undertaken in this class, would involve
the actual implementation of the results, analysis, and recommendations of phase one. Hopefully this
implementation will involve close communication and participation of at least some of the students in this
class who generated this valuable performance management and internationalization analysis for the specific
firm here in this course.

The third phase, again beyond our control and purview in this course, should consist of a feedback
and review stage where the theme would be what did we do right, and what did we do wrong?

It is believed that by kick starting the internationalization potential of the Greek firms that will be
analyzed in this class and with this practical and firm and industry-specific approach will create positive
outcomes and productive results for these firms. Additionally, it is hoped that instead of relying on broad
government policies and guidelines or general incentives that may not apply or pertain to the precise needs
of a particular industry and firm, this process undertaken in this class could serve as a model for more of the
same for future series of similar kick starting additional internationalization endeavors either within the
same firm or in other lines of businesses.

TO GROW OR NOT TO GROW? THAT IS THE QUESTION!

Growth, and in our case international growth, makes sense in terms of economies of scale, and increases in
market share, sale revenues and profits. In most instances, however, growth is taken for granted or as
something that occurs by itself automatically and therefore will take care of itself without due diligence. As a
consequence, systematic growth management is a widely neglected area from both theoretical and
practical perspectives especially for international ventures.

However, there are firms that may have growth potential but do not know it, and those who do
know it but consciously chose not to grow. On the other hand, there are firms that want to grow, even
try to grow, and found out that they cannot (Vesper, 1990). Conscious underachievement sometimes is
rooted in the basic character of the firm recognizing its limited capability to grow; a desire to keep the
enterprise privately held and under control; or, a value system where leisure occupies a prominent place.
Research has also shown that lack of contacts with outside expert advisers is an obstacle to the expansion of
 3
a small firm and perpetuates both the unintentional underachievement and the conscious underachievement
(Larsson, Hedelin, & Garling, 2003). Even more interesting is the fact that when it comes to the
consequences of growth, non-economic concerns and beliefs, such as the well-being of the employees,
the preservation of the work atmosphere, etc., seem to be more important than the possibility of personal
economic gain or loss. These salient beliefs are considered to be predisposing business owners about the
positive or negative consequences of growth especially in the international arena (Wiklund, Davidsson, &
Delmar, 2003).

Growth therefore, should be given careful consideration, and the entrepreneur must recognize that
certain personal, internal and external conditions must be present in order for growth to be achieved. Quite
often, firms find it difficult to find the time to make the conscious decision and think systematically about
business growth, especially when it involves foreign transactions and funny letterheads. Consequently, this
indecision and inertia on the issue of growth actually overwhelms the firms operational prospects, and places
the firm in financial jeopardy (McKenna & Oritt, 1980).

Growth planning and management and especially internationally based growth should also take into
consideration the personal and professional values of the owners, in conjunction with the strategic
competence of the firm and the evolution of the strategic window of opportunities in the firms specific
environment and strategic international target market. The decision to grow should be made with the firms
future viability and economic performance in mind, not because bigger is necessarily better.

In the process of answering this fundamental question and haunting dilemma regarding the ventures growth,
the owners should elaborate and formulate answers to the following questions regard:

1. How large do they wish the venture to become?

2. What financial, human, and operational resources do they have at their disposal?
3. Are they willing, and capable of going public in case exports grow exponentially and more capital is
needed?
4. Do they wish their competitive edge to be production or marketing based?
5. To what extent are they constrained by international financing, management expertise and experience,
as well as, employee skills, knowledge, and productivity?
6. Are there stockholders, investors, or other stakeholder demands to satisfy by pursuing growth? (Van
Auken, Sexton, & Ireland, 1982, p. 13).

Similarly, the following guidelines and considerations are suggested when firms try to decide between growth
and no-growth, always keeping in mind that it is imperative to make sure that any type of decision on growth,
especially international, should be made for the sake of the ventures future viability, and not just for the
sake of getting bigger:

1. Why is the growth of the business important? Why is the growth of the business important? Does
it make sense in terms of the state of the economy and local and international competition or would
it he simply a reflection of the expectations and ego of the owner?

2. What should this business ultimately become? Is the owner capable of administering and
managing a larger operation? Should he or she step aside from active management or perhaps seek
further management education in order to ensure the firms success?

3. Is the current management capable of growing with the business? What does the owner see
as the ultimate goal of the business? At what point should growth be curtailed? While the answers to
these two questions may evolve and change, they are still important for the owner to consider.
4. At what rate should the business grow? How quickly should the business grow? Too much growth
too soon can be disastrous to the survival of the organization and often make it a victim of its own
success. If the growth of the business is to be successfully managed, its rate must be predetermined
and continually kept in check.
 4
5. What type of resources and commitment the growth process will require? What resources
does the firm have available to assist with the growth process? While financial matters are usually
given highest, if not sole, priority, it is equally important to determine what human resources are
available, and whether the entrepreneur or others in the firms internal or external teams have the
knowledge to handle the challenges of growth, such as new technology for example (McKenna & Oritt,
1981).

A firm determined to grow in size, in terms of market share, sales, profit, or return on investment through
(in our instance) international business, must consciously and strategically put together the right
combination of the essential conditions for this type of growth in all functional aspects. The successful
international entrepreneur must recognize that to generate and maintain international success and
growth, he or she must experience a change in attitudes and perspective that is absolutely critical for real
growth to occur. This perspective will be expressed and articulated in a carefully planned transition from an
entrepreneurial to a professionally growth management system, as well as, the attainment of a truly
international perspective, because growth not only constitutes a change per se, but also brings changes to
the physical, structural, managerial, and financial aspects of the business.

The essential elements in this transition from an entrepreneurial to a professional management style
and from a domestic only to an international perspective require therefore, not only a commitment to
growth, but also a subsequent commitment to all the necessary structural and procedural issues,
which are necessary for a successful transition to higher levels of growth and development. Once an
affirmative response to the question of to grow or not to grow? has been given in favor of growth,
commitment to changing attitudes and management style should equal the amount of commitment toward
growth. The successful transformation of a sometimes nearly one man show to a professionally managed
organization involves trade-offs in flexibility, direct control, and informal communication, in exchange for
coordination, delegation of responsibility and authority, decentralized decision making and a well-developed,
broad-based formal management information and communication system. These commitments to changing
attitudes and perspective should exhibit the following characteristics:

Explicit and enduring commitment to growth.

Development of a definite and distinct hierarchical structure.

Increased delegation of authority.

Increased emphasis on management skills and techniques.

Freedom from dependence on one or more key individuals.

Formal written policies and procedures.

Utilization of formal information analyses especially through staff personnel.

Increased formal control through documentation and budgets (Vozikis, 1979, p. 48)

Vesper (1979) makes a valuable contribution to the growth stage development theory for small firms, by
pointing out a fallacious a priori assumption of most researchers. He observes that most developmental
theories seem to imply that the start-up stage or the early-growth stage is generally followed by more growth.
In fact, very few of the Mom n Pop category firms are destined for growth, because either they tried to
grow but found they could not, or they could grow but just did not. With this caveat in mind, a relevant
portion of the theoretical framework discussed so far, and the characteristics of each stage of venture
development are summarized below in Exhibit 1, using Coopers (1978) general typology of three stages of
development:
 5
EXHIBIT 1
Characteristics of Stages of Enterprise Development

STAGE I

General Management
One-man show.
Non-routine, and informal decisions.
Good communication.
Operations
Reliance on unique personal skills, unique product or unique market.
Diseconomies of scale.
Finance
More concern with survival and break-even, than rate of return.
Limited resources.
No cushion to absorb bad luck.
Emphasis on historical cost.
Marketing
Risk concentrated on few products, markets, and people.
No reputation outside of the immediate vicinity.
Stable market environment.

STAGE II

General Management
Delegation of operating decisions to lieutenants or assistants to.
Formal consideration of growth.
Direct control and direction.
Operations
Improvement of skill, method or market niche.
Production problems.
Technical specialization.
Finance
Attention to industry standards.
Marketing
Attention to competition.
Attention to market feedback.

STAGE III

General Management
More management levels and more delegation.
Utilization of staff analysts.
Increased emphasis on management skills and techniques.
Formal written policies and procedures.
More planning time.
Operations
Economies of scale.
Finance
Lower rate of return.
Emphasis on future costs.
Emphasis on short-run performance measures.
Marketing
Heavy investment in product and market development.
Drop unprofitable products.
Increased dependence on marketing distribution.
Better equipped to fight competition (Vozikis, 1979).
 6

INTERNATIONAL BUSINESS PERFORMANCE ANALYSIS: (WHAT IS?)

Most people would conclude that the purpose of accounting and financial management is to answer the
fundamental question whether the firm made any money in the final analysis. Financial information, especially
income statement data are essential in answering this question, and quite too often, managers and owners
rely only upon what they see or hear to determine whether or not their business is doing well.
However, certain aspects of the business are not anticipated and cannot always be accurately sensed.
Changes in customer preferences, changes in the national and local economy, changes in the market, and
gradual but seemingly irreversible changes in the cost structure of the firm can develop into a financial crisis,
unless they are detected at an early stage and effective action is taken. Therefore, financial performance
management should be based on comprehensive and well-documented facts, not upon piecemeal or random
observations, so out-of-line financial conditions can be detected early, and corrective action taken promptly,
in order to get a clear picture on the value added to the firm from the financial operations (Aguilar, 2003).
Monitoring how well the firm is doing, as well as the development of a working operating profit plan,
entails the following aspects:

1. Continuously evaluating financial results. Each time an income statement is prepared, actual
sales and costs are compared with those projected in the original profit plan, in order to detect areas
of unsatisfactory performance so that corrective action can be taken.
2. Continuously establishing whether there is a need for fewer or additional resources, such
as plant, equipment, or personnel. For example, the profit plan may show that a sharp increase in
expected sales will overload the companys billing personnel. A decision can then be made to add
additional invoicing personnel, to retain a billing or collection service, or to pursue some other
alternative.
3. Carefully planning purchasing requirements and related costs. The volume of expected sales
may be more than the firms usual suppliers can handle or expected sales may be sufficient enough
to permit taking advantage of purchasing quantity discount savings.
4. Anticipating and planning additional financing needs. With planning, the search for needed
additional funds can begin as early as possible, so financial crises are avoided and there is enough
time allotted to arrange financing on the most favorable terms.
5. Delegating and highlighting financial responsibilities. With a working operating profit plan,
personnel are readily aware of their responsibility and most importantly, accountability for meeting
sales objectives and profit targets, as well as controlling costs.
6. Developing cost sensitivity. When the cost sensitivity of alternative decisions is determined and
comparatively analyzed, cost excesses can quickly be identified and planned expenditures can be
compared with original budgets before they occur, thus, reducing unnecessary costs and
overspending.
7. Developing a disciplined approach to problem solving. A profit plan should permit early detection
of potential problems so that their nature and extent are known through a disciplined preventive
maintenance problem solving approach, so that alternative corrective actions can be more easily and
accurately evaluated.
8. Continuously thinking about the future. Thinking about where the venture is today, where it could
be, should be, and will be next year, or the year after, ensures that opportunities are not overlooked.
At the same time, by anticipating the seemingly unanticipated events crises that could have
happened are avoided.
9. Securing the confidence of lenders and investors. A realistic working operating profit plan,
supported by a description of specific steps proposed to achieve the sales and profit objectives, will
inspire the confidence of potential lenders and investors. This confidence will not only influence their
judgment on the business manager and/or owner, but also on the prospects of the firms success and
worthiness for a loan or an investment (U.S. Small Business Administration)

However, since profit plans and subsequent financial performance are based upon estimates, inevitably, many
conditions expected to materialize when the plan was prepared will change. In a year, any number of factors
can change, many of them beyond the control of the firm. The economic fortunes of customers may decline,
the prices of materials may increase, or the suppliers becoming unable to deliver on their promises. All these
eventualities may disrupt your profit plans and overall financial performance, and consequently, adjustments
 7
must be made from time to time to meet changing conditions. There is no point in trying to operate a business
according to a financial plan that is no longer realistic because conditions have changed. Some common
problems with the management and control of financial performance include the following:

1. Inaccurate Financial Performance Measures. Unless they are built on discounted cash flow
budgets, conventional accounting methods assume a stable monetary unit of measure, and may not
incorporate the impact of inflation in measuring financial performance. Especially during high
inflationary times, a firms adjusted net income may artificially increase, increasing for all practical
purposes the effective tax rate also, which in essence will cloud the true picture of the ventures
financial performance, since the firm will not be able to retain enough earnings to maintain capital
investment and high productivity levels. Total sales volume figures as an indication of financial
performance are also a very crude measure at best, as mentioned earlier. At worst, they are
misleading, because they say nothing about the financial quality of the gains or losses. A better
measure of performance would be comparative business sales figures. But even this measure may be
misleading because what looks like a solid sales increase, may not have corresponding comparable
profits to go with it. The reason is that sales might have been built up in a costly way with expensive
promotions and markdowns, especially during recessionary times. Other measures of financial
performance such as sales per employee or the widely used especially by retailers sales per square
foot, can help in some comparisons of different kinds of firms and stores. But it is nearly impossible
to define what to include as sales space, and any big gains made by a growing store are diluted by
the increasing floor space. A combination of sales information such as comparable regional (instead
of national) sales figures, sales per square foot of existing stores without including any added floor
space or new stores, changes of holidays from one reporting period to another, and sales analysis
according to product category can portray a much more accurate picture of financial performance.
2. Inadequate Financial Performance Strategies. There are three principal areas of misguided
strategies toward financial performance:

Growth for growths sake. Sales growth is not the solution to all problems, because growth is
expensive, and almost always, it is accompanied by an increase in overhead except in the
immediate short run.
Inadequate product analysis and cost allocation. Direct costs can easily be attributed to a
particular product or activity. Indirect costs however, are not easy to allocate and an easy way
out is to charge the same proportionate amounts of indirect costs to both old and new products
alike. This is not reasonable since a new product line costs far more to start up. The inadvertent
outcome of such an inexact product analysis and cost allocation is to encourage costly new
projects, downgrade the financial performance of old cash cow products and artificially
upgrade that of new expensive ones. Advance cost targets should be accurately set in advance
for all aspects of new product design, development, and production (Monden & Lee, 1993).
Lack of concern for the balance sheet in favor of the income statement. As mentioned earlier,
typically firms tend to show lack of concern for the cash flow and the productivity of the
employed assets. Instead, they would rather seek new funds to improve the income statement,
rather than make a better and more efficient use of the funds and assets they already have.

These accuracy problems as well as misguided strategies toward financial performance would make a firm of
any size highly susceptible to financial errors. These errors may develop into pitfalls from which a business
may not be able to extricate itself with disastrous consequences for the firms future prospects.
Exhibit 2 identifies 14 pitfalls in financial management that smaller companies are often guilty of
committing which may eventually become serious problems and not only deprive the venture from its original
competitive advantage, but it may eventually lead to bankruptcy if left unchecked:

EXHIBIT 2
Financial Pitfalls for Entrepreneurial Ventures

Pitfall No. 1: Insufficient capital from the start.

Pitfall No. 2: Insufficient capital for growth and expansion.
Pitfall No. 3: Over-dependence on debt.
Pitfall No. 4: Inadequate financial planning.
 8
Pitfall No. 5: Inadequate cash management.
Pitfall No. 6: Emphasizing sales volume at the expense of return on investment (ROI).
Pitfall No. 7: Overlooking the risk-return tradeoff.
Pitfall No. 8: Withdrawing too much money out of the business for personal compensation and perks.
Pitfall No. 9: Confounding cash and net income, since net income may not necessarily be cash.
Pitfall No. 10: Ineffective bank relations.
Pitfall No. 11: Too liberal credit policies.
Pitfall No. 12: Inadequate billing, account receivable, and collection system.
Pitfall No. 13: Inadequate handling of accounts payable.
Pitfall No. 14: Inadequate overall accounting system
(Source: Abdelsamad, DeGenaro, & Wood, 1977.)

Whenever any of these pitfalls occur or an inadequate financial performance strategy is pursued on a
permanent basis, it is time to consider a firms peaceful death. The point of no return is reached when all
parties concerned, customers, suppliers, creditors, stockholders, internal and external team members, with
the probable exception maybe of the owner, realize that the following decisive factors have been established:

1. The inability of management to recognize there is a pitfall.

2. Failure to realign and reform a declining business from a pitfall in the belief that soon everything will
return to the good old days.
3. A disorganized management who never knows where it stands, constantly extinguishing fires of
continuous profitability and cash crises.

Instead, if a comprehensive but simple network of gathering financial performance information to develop an
accurate picture of how well the firm is doing is permanently in place, an effective financial performance
management system is feasible. This does not mean that the effective financial control of the business should
lack sophistication but rather that the items used to gauge financial performance should be simple,
straightforward, well organized, and result oriented. Such an organized approach to financial analysis and
control leads to a better understanding of how the firm is doing and how the financial return can be increased.
For example, calculating a companys, or a divisions return on investment (ROI) is an excellent way to
measure financial performance in a simple and efficient way:

ROI = profit before taxes

total equity

A better expression of the same formula is as follows:

ROE = profit before taxes x net sales x total assets

net sales total assets total equity
(PROFITABILITY) x (ACTIVITY) x (LEVERAGE)

The long version of ROE gives a better financial performance picture, because it directly identifies the culprit
family ratio that was mainly responsible for good or bad return performance. The important issue is to be
consistent and use the same measures of profit (customarily, before taxes), net sales (customarily, sales
after returns and allowances for bad debt), assets (customarily, net, year-end book value assets), and
equity/investment when figuring ROIs for different periods and/or divisions. The ROE ratio and its variation
the Dupont formula (asset turnover times margin) are used to gauge financial performance as outlined
below:

Measure current performance overall.

Compare different companies.
Compare different divisions of individual companies.
Compare future potential profitability among divisions.
Evaluate future investment opportunities.
Evaluate alternative capital expenditure types and levels.
Measure the effect of cost reductions.
Measure the effect of changes in inventory levels.
 9
Measure the effect of changing asset utilization.
Evaluate new product development.
Provide framework for pricing decisions.
Rate managerial effectiveness among divisions.
Provide the basis for determining management promotions and rewards.

However, it should be noted that different companies, divisions, and products require different levels of
investment, and differences in managerial effectiveness also create different levels of ROE. Return on
Investment and productivity (O/I) improve when managers:

Increase sales (output) and reduce expenses (input).

Increase sales proportionately more than the increase in expenses.
Reduce sales proportionately less than the reduction in expenses.
Retain level of sales steady, while reducing expenses.
Increase level of sales, while retain expense level steady.
Increase sales proportionately more than the increase in investment.
Reduce sales proportionately less than the reduction in investment.

The ROE and the Dupont formulas provide a useful and comprehensive analytical model that avoids piecemeal
approaches, such as simply cutting costs, or increasing sales in evaluating financial performance and in
developing strategies to improve it. Rather, their approach helps firms to see the interactions and trade-offs
involved among the important financial variables in terms of a cause-effect relationship. The ROE formula is
superior to the Dupont formula, because the latter has certain inherent limitations. In spite of the benefits of
gradually moving from financial measure to measure to gauge financial performance, it considers only the
effects of operations to calculate the earning power of a firm (margin multiplied by asset turnover), and
ignores asset financing, i.e. the composition of the firms investment.

Exhibit 3 presents a checklist for a firms overall strengths and weaknesses:

EXHIBIT 3
Checklist for firms Strengths and Weaknesses

1. RELATIVE COMPETITIVE POSITION OF COMPANY WITHIN THE INDUSTRY

(Comparison between the firm and its competitors in a matrix format)

2. GENERAL ORGANIZATION AND MANAGEMENT

Authority
Responsibility
Delegation
Decision Making
Division of Effort
Communication Channels
Information Systems
(Other?)

3. MARKETING
Pricing
Service
Channels of Distribution
Product Mix
Market Segmentation
Promotion
Cost
(Other?)

4. PRODUCTION/OPERATIONS
Supply Resources
Costs
 10
Capital Equipment
Plant
Research and Development
Purchasing
Inventory
Quality Control
Capacity
Production scheduling
(Other?)

5. FINANCE
INCOME STATEMENT
BALANCE SHEET
RATIOS
Quick
Current
Debt to Equity
Inventory to Sales
Return on Investment
Profit
(Other?)
SOURCES OF FUNDS
Equity
Debt
Profits
Depreciation
Sale of excess capital equipment
Decrease working capital
(Other?)
USES OF FUNDS
Plant and equipment
Repay debt
Repurchase of capital stock
Dividends
Increase working capital
(Other?)
CASH FLOW
(Other?)

6. PERSONNEL
Human resources
Motivation
Employee Benefits/Incentives
Labor relations
Promotion/Reward structure
Recruitment/Hiring
Pay
Training
(Other?)
 11
INTERNATIONAL BUSINESS PERFORMANCE ANALYSIS: (WHAT COULD BE?)

A. THE INDUSTRY

1. Economic forecast: to include an estimate of current and a projection of the volume of sales for the
industry overall, both domestic and international, for the ensuing 2 years, and an explanation of the
basis for computing this projection, based on trends and facts, market size, etc.
2. Competitive structure: to include an identification of numbers and types of competing companies
both domestic and international; productive capacity; influences of competing companies on pricing
practices; past trends, market shares, etc.
3. International and domestic industry problems, issues, threats, and opportunities: to include
an identification of: (a) scarcity or plentitude of materials and labor; (b) financing; (c) science and
technology; (d) social; (e) governmental and political; (f) consumerism, etc.

NOTE: The industry analysis (economic, competitive, and domestic and international industry issues) needs
to incorporate existing data and statements for current and immediately past years as of the time of the
firms analysis originating from various sources (own data, industry analysis reports, industry associations,
etc.), and estimates and projections for the future from the same or other sources or your own analysis.
Statements explaining the assumptions underlying calculations of figures and statements for all projections
and forecasts are strongly recommended. Exhibit 4 presents a checklist for the identification and analysis of
industry trends that constitute threats and opportunities for the specific environment the firm faces. This
Threat and Opportunity analysis as outlined below, will be matched with the results of the Strength and
Weakness profile that was developed in the previous section, in order to formulate a strategic SWOT analysis
for the firms international venture plan.

EXHIBIT 4
INDUSTRY TREND ANALYSIS
Checklist for firms Threats and Opportunities

The purpose of the industry trend analysis is to analyze the what, how, when, where, who, and why of current
economic, social, political, international, etc. critical issues, as they relate to a specific industry. No matter
how clearly a business article presents a particular issue, it is not always obvious at the start what the problem
is or at what level it should be tackled or even if there is a problem. The analyst therefore should ask such
questions as:

1. How did the issue arise? Why is it an issue? Is it a problem or an opportunity?

2. Who are the people who believe it to be a problem?
3. Why is a solution important?
4. What should a solution look like? What sort of solution is acceptable?
5. Is it the right issue anyway? Might it not be just a manifestation or a symptom of a much larger
or deeper issue? Would it be better to tackle this larger issue, if there is one?

By posing these questions, the analyst seeks to formulate a better idea regarding the nature of the trend, its
scope, and the benefits likely to result from an extensive analytical effort. After these exploratory but
fundamental questions have been answered, a more systematic analysis of the trend is required. A
comprehensive framework for the industry trend analysis is suggested below adapted from decision system
implemented in the state of Hawaii:

A. Source and background of the Issue (description, origin, causes, protagonists)

B. Reason for attention (justification, magnitude, impact)
C. Groups and/or institutions toward which activity is directed (specific population, target groups,
characteristics)
D. Beneficiaries (who gets benefits, who pays for cost)
E. Related actions (specific activities by others that affect the issue)
F. Goals and objectives (ultimate goal, possible conflicting objectives)
G. Measures of Effectiveness (qualitative, quantitative criteria and their operationalization)
 12
H. Framework for Analysis (what to do, why, who, when, how).

1. Kinds of alternatives
2. Possible methodology
3. Critical assumptions

I. Alternatives (unconstrained look at all possibilities)

1. Description (resources, policies required, advantages, disadvantages)

2. Effectiveness (quantitatively if possible)
3. Costs (cost categories)
4. Spillovers (side effects on other firms or groups)
5. Comments on ranking
6. Other considerations (risk, uncertainty, social and moral constraints, political feasibility)

J. Recommendations (strategy, explanation, functional policies, actions)

K. Appendices (references, back-up tables, charts, calculations, exhibits)
 13
INTERNATIONAL BUSINESS PERFORMANCE ANALYSIS: (WHAT SHOULD BE?)

Part I: INTERNATIONAL OPPORTUNITY ASSESSMENT GUIDE (Copyright 2001 by Pat H. Dickson)

The following information is provided as a guide in preparing the international opportunity assessment for
what the international venture plan should be, and has been adapted from the Opportunity Assessment Guide
developed by Dr. Pat Dickson of Wake Forest University. The international opportunity assessment should
start with a clear description of your product or service, your initial target market, the value proposition for
your targeted international customers, and analyzed according to the PPT on screening international
opportunities posted in the MBA International E-Learning Portal. Second, you should complete the quick
screening process to determine the potential viability of the international venture. Once it is determined that
the international venture value concept has merit then the team should move forward to the completion of a
full international opportunity assessment.

The Written International Opportunity Assessment

The following is offered as a general outline for your international opportunity assessment. Listed are the
questions that you should be asking at each step in order to arrive at the basic kinds of information you
should include in your answers, but bear in mind that not all questions may pertain to your specific situation.
You are welcome to add any additional analysis that you believe reveals the strengths and weaknesses of
your proposed international opportunity.

Step 1:

Develop a clear and concise description of your international venture concept. Your description should
specifically address the burning problem or big pain for which you are providing a solution. It should
delineate your international primary and secondary users/customers and concisely outline the value that
your solution will bring to your targeted customers.

The following questions will help in the description of your international venture concept:

1. What type of business do you propose?

2. What is the purpose for the business?
3. Who are your primary customers? Who, if any, or your secondary customers?
4. What is your primary product or service?
5. What specific problem or burning pain does your product/service address?
6. What are three unique benefits of your product or service (that are not currently available to your target
international customers)?
7. What are your reasons for going into the business?
8. What led you to develop your product or service?
9. Who is your primary international competition?
10. How is your product/service different from that of your domestic and international competition?
11. What are the key objections to buying your product or service?
12. In general how to you anticipate the pricing of your product or service will compare with the pricing of
your competitors products/services?
13. When will your product or service be available?
14. What do you estimate is the opportunity window for your product or service?
15. Is this product or service used in connection with other products or services?
16. What is the key message or phrase that describes your business?

Step 2:

COMPLETE THE INTERNATIONAL VENTURE QUICK SCREEN WORKSHEET EXPLAINED AND

OUTLINED BELOW. IF THE DECISION IS A GO, CONTINUE ON TO STEP #3.
 14
COMPLETING THE INTERNATIONAL VENTURE QUICK SCREEN WORKSHEET

The International Quick Screen Worksheet is a preliminary and quantitative analysis of your international
venture idea based on qualitative information. The completion of the Quick Screen will provide you with an
initial assessment as to the viability and market potential of your international venture idea. The analysis is
quantitative but at the very early stages of your international opportunity assessment venture development
will be based largely on educated qualitative guesses. The operative word is educated. This means that
you need to justify as much as you can this educated guess with actual data and proof. Start with a short but
detailed description of the international venture and the attributes of the venture and international
marketplace for which it is intended. Apply strong logic to each question contained in the Quick Screen and
whenever possible benchmark against known attributes of the target industry and similar ventures (that may
or may not be in the same industry). Document what is going on right now in the industry and document its
existing business function processes by highlighting the differences between your suggestions and plans and
the existing industry processes effectiveness and efficiency wise, i.e. why someone would switch and buy
your stuff.

Keep in mind that no international venture will score high on all of the attributes listed in the Quick Screen.
Ultimately it will be your decision if the weaknesses revealed by the International Quick Screen can be
overcome or not, by documenting how you will cover your weaknesses, by developing strategic alliances for
example, or outsourcing some parts of your "process", etc. Your initial decision may be that you do not yet
have enough information to make a final decision and will need to do additional in depth research in order to
adequately (and fairly) answer the questions asked. Ultimately, you will need to decide if the venture is a
go or no go. The key word here again is an educated guess, which means a decision based on as much
documentation and justification as possible, especially as a result of the analysis of "us vs. them", "what is
being done now, vs. what should be done", and the results of the comparison matrix with the competition,
especially in relationship to effectiveness (we are doing IT better, bigger, faster, simpler, etc.) Even if the
ultimate decision is to move forward with the international venture, keep in mind that any (and all) of the
weaknesses revealed in the International Venture Quick Screen should be dealt with (i.e. strategies for
managing the risks) in the development of your venture plan. What are you going to do if things go wrong
OVERALL that is, rather than how you will cover and plug the holes on the specific weaknesses that you
indicated earlier? In other words, what is the OVERALL minimum threshold of success above which you are
considered successful (GO), and below which you will be considered unsuccessful (NO GO), along with a
specific timeline of when you will quit the international venture so you can fail soon and cheaply? For example,
if sales do not exceed a certain number and level, or you do not capture a certain market share, etc.

The following definitions and clarifications may help in your completion of the Quick Screen:

International Market Attributes

Is the venture based on a clearly identifiable need or problem (or a need or problem that can be clearly and
powerfully communicated), is the need or problem linked to an identified group of customers that are both
reachable and motivated (or can be motivated with without great resource expenditures) to buy? Will the
acquisition of the product or service by the proposed customers result in both an identifiable payback in a
reasonable period of time? In general products or services that provide a payback in less than one year are
considered to have the greatest potential. Ultimately what is important is your ability to provide a clear and
substantiated value proposition (a clear return on their investment) to the customer. Is the market large
enough to justify your risk and effort without being so large that there are many powerful competitors (or
soon will be)? The highest start up potential is provided by markets that are from $50 to 100 million with
little current competition (larger markets can also have high potential if your venture is focused on a specific
niche of the market that is both manageable and not currently targeted by many potential competitors). What
is the growth rate of the industry? Growth rates above 20 percent provide strong potential. Keep in mind
that for slow growth industries to grow you must take business away from existing competitors. Finally, in
general what are the gross margins in the target industry? A 20 percent or higher gross margin allows a lot
of room for error and mistakes. Industries with low gross margins are very unforgiving for new ventures.
 15
INTERNATIONAL VENTURE QUICK SCREEN WORKSHEET
Name: ____________________________________________

International Market Attributes Comments______

o Need or Problem Unfocused Identifiable
1 2 3 4 5
o Customer base Not clear Identifiable
1 2 3 4 5
o Are they reachable No Yes
1 2 3 4 5
o Are they motivated to buy No Yes
1 2 3 4 5
o Payback to customers/end users 3+ years Less than 1 year
1 2 3 4 5
o Potential market size <1million Euros >50 100 million Euros
1 2 3 4 5
o Market growth rate for industry Less than 20% Over 20%
1 2 3 4 5
o General gross margins in industry <20%/Fragile >20%, Durable
1 2 3 4 5

International Competitive Attributes

Fixed costs are those costs such as for plants and capital equipment which remain the same no matter what
the output of the venture. Variable costs are costs that vary with output. In general it is desirable to have
low fixed costs (since this reduces the capital investment required by the venture) and low variable costs
(which allow for strong gross margin). There are four critical areas of every venture that the higher your
control the greater the potential for success of the venture. First, high potential ventures are ones in which
costs can be controlled. When the marketplace or competitors dictate your costs the potential for success is
greatly impacted. Second, control over costs (of raw materials, production, distribution, etc.) is critical. The
highest control is provided by ventures that allow for multiple suppliers for all of the critical inputs and a
marketplace that allows prices to be determined more by demand and less by competitive pressure. The
degree of control over supply channels is critical for most new ventures. For any critical input (i.e. raw
material, component, service) whenever possible there needs to be the availability of multiple sources of
supply. Finally, the ventures degree of control over the distribution of its product(s) or service(s) is crucial.
This does not mean that it is always desirable to be vertically integrated to the point that the distribution
channel is controlled all the way to the final consumer, but the greater the level of control over the distribution
process the higher the potential for success.

Other competitive attributes that impact the potential for the venture include the barriers to entry that the
venture team might be able to erect to keep potential competitors (and often copy cats) from following.
These potential barriers include such things as patents; copyrights, licenses; close control of trade secrets;
significant market share growth; quality or other strategic advantages (i.e. you can produce the product or
service at a quality and price that cannot easily be imitated), long lead times to R&D attributes or market
attributes, etc. What are the value chains attributes of the venture? The value chain is composed of all of
the functions that must be performed from the acquisition of the raw materials to the delivery of the product
or service to the final end user. The shorter the value chain and the greater the control the venture has over
the chain the higher the potential of the venture (it is no wonder that the advent of the internet has created
such excitementand dismaysince for many industries it has the potential to greatly shorten the value
chain). You want to focus on both the industry value chain and the piece of the value chain embodied by
your venture. Does the venture have any contractual advantages (i.e. the potential for specific contracts
with large customers, exclusive component providers, outsourced partners, government contracts, etc.)?
Finally, what potential networks, alliances and contacts do the lead entrepreneurs (and proposed venture
teamincluding advisors, board members, etc.) bring to the venture that might provide a competitive
advantage over competitors?
 16

International Competitive Attributes Comments_____

o Fixed and variable costs High Low
1 2 3 4 5
o Degree of control over costs Low High
1 2 3 4 5
o Degree of control over prices Low High
1 2 3 4 5
o Degree of control over supply
channels Low High
1 2 3 4 5
o Degree of control over
distribution Low High
1 2 3 4 5
o Barriers to entry for potential Low High
competitors-proprietary 1 2 3 4 5
advantage (Licensing, patent,
trade secrets)

o Barriers to entry for potential Low High

competitors-lead time advantage 1 2 3 4 5

o Value chain Long/little control Short/controlled

1 2 3 4 5
o Contractual advantages None Many
1 2 3 4 5
o Contacts, networks, alliances Weak Strong
1 2 3 4 5

Value Creation Attributes

Determining the value creation attributes of the proposed venture will require the greatest level of logic and
benchmarking. Based on similar companies in the target industry and ventures with similar attributes (i.e.
value chains, control issues, technologies, business models, etc.) what do you expect each of the following
to be?

*Profit after taxes (Final net profit of the venturekeep in mind that the net profit needs to be high enough
to be forgiving.)
*Time to break even (How long will it take for the venture to get to the point that the monthly gross income
covers or exceeds the monthly costs?)
*Time to positive cash flow (How long will it take for the monthly income cash to exceed the monthly cash
demands of the venture?)
*Monthly/weakly volume/expenses (Based on benchmarking similar ventures what do you expect the
expense/income structure of the venture to be?)
*ROI potential (Return on investment. Given the capital investment required by the venture and profit
potential of the venture what do you expect the return to be?)
*Capital requirements (Will the venture require a large or small capital investment)equipment, land,
buildings, etc. Can some be outsourced?)
*Internal rate of return (The actual rate of return on an investment that takes into consideration the time
value of money)
*Free cash flow characteristics (What will be the potential of the venture to general cash beyond the monthly
needs of the venture for reinvestmenti.e. growth? Ventures with strong free cash flow characteristics
provide many opportunities for both expansion and exit)
*Valuation (What do you anticipate the value of the venture to be in 3 to 5 years. You will need to look at
comparable ventures that have sold or gone public to make this judgment).
 17
International Value Creation Attributes Comments_____
o Profit after taxes <5%, fragile >10%, durable
1 2 3 4 5
o Time to break even > 3 years < 2 years
1 2 3 4 5
o Time to positive cash flow > 3 years < 2 years
1 2 3 4 5
o Monthly/weakly volume/expenses Unreasonable Reasonable
1 2 3 4 5
o ROI potential < 15% to 20%, low >20%, high
1 2 3 4 5
o Capital requirements High, unfundable Low, fundable
1 2 3 4 5
o Internal rate of return potential < 15% per year > 15% per year
1 2 3 4 5
o Free cash flow characteristics < 10% of sales > 20/30% of sales
1 2 3 4 5
o Valuation Unreasonable Reasonable
1 2 3 4 5

International Venture Overall Attributes

What are the timing attributes of the venture and what is the window of opportunity? How quickly must the
venture get into the marketplace in order to secure a lead time advantage over potential competitors and
once in the marketplace how long does the venture team have to secure a significant (and the definition of
significant will vary from venture to venture and industry to industry) market share? Can a venture team be
assembled that clearly fits the venture opportunity and that brings strong competitive advantages to the
venture? Is there a logical exit mechanism for the venture (a way that the initial stage investors can get
their investment back in a 3 to 5 year time frame)? What is the current capital market context for the venture
(Are similar ventures getting funded? Are the valuations for similar ventures reasonable?) Can you currently
envision any fatal flaws (i.e. issues that might bring the venture down such as pending government
regulations, entry of major competitors, etc.) for which there are no solutions? Finally, given all that your
analysis tells you about the potential risk and potential outcomes and rewards of the venturedo the rewards
justify the risk?

International Venture Overall Attributes Comments

o Timing Poor Good
1 2 3 4 5
o Window Closing Opening
1 2 3 4 5
o Venture team Weak, ill-suited Strong
1 2 3 4 5
o Exit mechanism and strategy Unplanned Well planned
1 2 3 4 5
o Capital market context Poor Good
1 2 3 4 5
o Fatal flaws Many None
1 2 3 4 5
o Risk/reward ratio Poor Good
1 2 3 4 5
 18
OVERALL INTERNATIONAL VENTURE POTENTIAL Comments____
o International Market attributes Total Score*: ______ Go ____ No Go ____

o International Competitive Total Score: _______ Go ____ No Go ____

attributes

o International Value creation Total Score: _______ Go ____ No Go ____

attributes

o International Venture Attributes Total Score: _______ Go ____ No Go ____

o Other compelling issues:
*Divide score obtained by total possible in
each area to get a percentage. Weigh the
values against the potential risk to develop a
decision rule regarding go versus no go
decisions.
____________________________________

o Bottom line Go _________ No Go _________

IF THE DECISION IS A GO
CONTINUE ON TO STEP #3.

Step 3:

Assess the international external environment surrounding your international opportunity. Include the
following:
1. What are the characteristics of the opportunity window, including its perishability?
2. What international entry strategy do you believe best fits this venture?
3. Briefly describe why you believe that the characteristics of your venture opportunity fit the attributes of
the international external environment in which your venture will be undertaken?
4. What are the characteristics of the primary industry of your venture?
5. In general, on what basis to the domestic and international companies in this industry compete?
6. How critical is technology and technological developments in this industry?

Decision Point ONE: Before moving forward be certain that the international opportunity you are detailing
is both compelling and possible. Is the timing right? If you answer yes to all, then continue on to Step #4.

Step 4:

Assess the Attractiveness of your international venture opportunity.

1. Briefly describe the market(s) or market niche(s) you want to enter.
2. Specifically describe your product(s) or services(s) to be sold and its end use.
3. Assess how perishable the product(s) or services(s) are, including if it is likely to become obsolete and
when.
4. Are there any substitutes for your product(s) or services(s)?
5. Describe the developmental status of your product(s) or service(s). Estimate how much time and money
will be required to complete the development, test the product(s) or service(s), and then introduce the
product(s) or service(s) to the market.
6. What customer support will be necessary to support your product(s) or services(s)?
7. Describe the strengths and weaknesses, relative to the competition, of the product(s) or service(s) in
meeting customer need, including a description of payback of and value added by the product(s) or
service(s).
8. Map the value chain for your product or service (describe how your product or service will get to the end
user and each of the value components you add to the final product that reaches the consumer. Break
out the portion of the final selling price realized at each step.)
9. Describe your primary customer group and why you believe they will buy your product(s) or service(s).
 19
10. Describe how your international customers typically buy the product(s) or service(s) you will be offering
(e.g. from direct sales, manufacturers representatives, brokers, etc.) as opposed to your domestic ones.
11. Do an assessment of the market potential for your ventures product or service. Your assessment should
include an estimate of the approximate size of the total potential market as measured in units, euros and
customers. Be certain to describe sources for your estimates and how much confidence you have in the
estimates.
12. Prepare a realistic estimate of the approximate sales and market share you believe your venture can
attain in each of the first two years of its existence.
13. What do you believe are the necessary approaches to enter, survive and win in your market? How will
your product or service be positioned in the targeted international market?
14. Describe the competitive advantages you believe you can achieve in terms of quality and service.
Objectively describe the strengths and weaknesses of your product(s) or service(s).
15. Do a brief analysis of your potential competitors. Your analysis should include the names of our
competitors, a description of the competitive product(s) or service(s) they sell, the pricing, and a brief
review of what you believe are the strengths and weaknesses of these competitors and/or their product(s)
or service(s). Also indicate whether any of these competitors enjoy competitive advantages such as legal
or contractual, size etc.
16. Briefly describe how you will price your product(s) or service(s) in comparison to your competitors.
Include the percentage markup and percentage gross margin per unit.
17. Do an initial analysis of the minimum resources required to get the venture started. Your analysis should
include estimates for:
a. product or service development
b. capital equipment
c. raw materials
d. market research
e. sales expense
f. overhead (e.g. salaries, rent, insurance, etc.)
g. other relevant startup costs.
18. Do an estimate of the capital required to start the venture and how you intend to raise the required
capital.
19. Complete an assessment of the degree of control in the international market (including that over prices,
costs, and channels of distribution and by suppliers, buyers, etc.) and the extent to which you can
influence these or will be subject to influence by others.
20. Briefly assess whether your venture will enjoy cost advantages or disadvantages in production, marketing
and distribution relative to the international competitors. If there are disadvantages, how do you intend
to overcome these?
21. Briefly describe the competitive advantages you believe you have or can gain and how you might secure
them.

Decision Point TWO: Does the venture still make sense? Does the potential return justify the resources
that will be necessary to start and grow the venture? Will your product or service be competitive in the
targeted international marketplace? Is the idea still compelling? If so, then continue on to Step #5.

Step 5:

Assess your international venture team.

1. Briefly describe the skills, industry knowledge, experience, and know-how your international venture team
has in relationship to your proposed international venture.
2. Briefly describe any additional team members/employees and the specific skills and knowledge you will
need to recruit prior to the international ventures launch.
3. In general, describe how you plan to compensate these team members.

Decision Point THREE: Do you have an international team capable of starting the venture? If not, can you
identify potential team members that might be persuaded to join in the development of the venture? Do the
potential rewards justify the kind of team you will need to be successful? Move forward to Step #6 if you
identified a potentially successful international venture team.
 20
Step 6:

Include any vital issues or considerations that are unique to your international venture opportunity that may
not have been covered thus far.

Step 7:

Assess whether your international venture opportunity has any fatal flaws and/or side view mirror blind
spots, and describe what steps you will take to attempt to remedy these flaws.

Decision Point FOUR: Are there any fatal flaws for which strategies to overcome cannot be developed? If
not, then continue on to Step #8.

Step 8:

List any significant assumptions you have made about your international customers, sales, industry etc. and
any significant risks you foresee for the international venture.

Step 9:

Evaluate the downside consequences should your assumptions prove invalid. What is the worst-case scenario
and how can it be avoided.

Step 10:

Rate the risk of the venture as high, medium or low and explain your reasoning.

Decision Point FIVE: Do the potential rewards justify the risks? If so, then continue on to Step #11.

Step 11:

List chronologically the 10 most critical actions and/or critical success factors that you will need to take to
convert your idea into a real international venture opportunity.

Decision Point SIX: Are these most critical actions and success factors feasible in a timely fashion? If so,
then prepare an international business plan by integrating the results of the industry research project
analysis, and the opportunity analysis into a business plan according to the format presented and
conceptualized by the Magnificent Seven Hooks below and/or the textbooks Chapter 6 global business plan
outline.
 21
THE CONCEPTS OF A BUSINESS PLAN

This critical thinking approach and conceptual analysis of the essentials of the business plan, whether it
involves a domestic or international venture, will enable the enterprise to identify the current and future
needs of the international venture in terms of type, amount, and timing, and at the same time greatly increase
the probability of securing funds on favorable terms by presenting the persuasive argument to bankers or
investors or your boss of knowing what youre talking about!

THE NICHE
The Value Concept for the Customer
(WHY buy?)
THE MARKET
The Demand-Driven Strategic Opportunity Target
(WHO buys, HOW MANY, WHEN, HOW, WHERE?)
THE RETURN
The Financial Projections and their Timetables
(How much can we profit and when?)
THE NEED
Success, Personal Investment, and Additional Financial Need Requirements
(How much we personally contributed, how much more we need, and what does it take to succeed overall?)
THE INFRASTRUCTURE
The Product and Marketing Considerations
The Organizational and Operational Considerations
The Legal Considerations
(What business functional plans need to be in place as the ventures infrastructure?)
THE PEOPLE "FAKTS": Financials, Attitude, Knowledge, Timing, and Skills, i.e.
THE ABILITY TO EXECUTE
The Management and Leadership of People
The Financial Management and Control of Money
(Ability to lead and manage people and money?)
THE DEAL
The External and Internal Performance Risks
(Evaluation and contingency plans to PROTECT the Value Concepts performance against any threats?)

The Growing and Sustained Competitive Advantage Edge

(Growth and development plans to IMPROVE the Value Concepts Sustained Competitive Advantage Edge?)

The Future Possibilities

(International, harvesting, and/or exit prospects to EXPAND the Value Concept?)

Therefore the same concepts of the business plan as shown above, need to be reconceptualized and
reconfigured in terms of the same seven hooks in the form of some essential and fundamental questions
that need to be answered in a sequential fashion. In other words, unless a question has been answered
completely, clearly, thoroughly and most importantly convincingly, it makes no sense to even attempt to
start answering the next subsequent question. Additionally, another strong message will be conveyed to the
interested parties that this is not a random exercise in futility, but rather a well thought out business plan
that represents the actually conceptualized business plan in terms of the following Magnificent Seven
conceptual hooks. These Magnificent Seven will put everything into perspective and crystallize the
reasons why the manager or owner and the enterprise overall is engaging in this long but rewarding journey
toward a successful international venture. (Vozikis, G.S., T.S. Mescon, H.D. Feldman, and E.W. Liguori. 2014.
Entrepreneurship: Venture Initiation, Management, and Development, (2nd ed.): Armonk, NY: M.E. Sharpe,
Inc., ISBN: 978-0-7656-3113-8).
 22
THE CONCEPTUALIZED BUSINESS PLAN

THE NICHE Hook #1: Can we MAKE it?

The Value Concept for the Customer
(WHY buy?)

THE MARKET Hook #2: Can we SELL it?

The Demand-Driven Strategic Opportunity Target
(WHO buys, HOW MANY, WHEN, HOW, WHERE?)

THE RETURN Hook #3: Can we PROFIT from it?

The Financial Projections and their Timetables
(How much can we profit and when?)

THE NEED Hook #4: Can we COMMIT to it?

Success, Personal Investment, and Additional Financial Need Requirements
(How much we personally contributed, how much more we need, and what does it take to succeed overall?)

THE INFRASTRUCTURE Hook #5: Can we PLAN it?

The Product and Marketing Considerations
The Organizational and Operational Considerations
The Legal Considerations
(What business functional plans need to be in place as the ventures infrastructure?)

THE PEOPLE "FAKTS": Financials, Attitude, Knowledge, Timing, & Skills

Hook #6: Can we EXECUTE it?
The Management and Leadership of People
The Financial Management and Control of Money
(Ability to lead and manage people and money?)

THE DEAL Hook #7: Can we GROW it?

The External and Internal Performance Risks
(Evaluation and contingency plans to PROTECT the Value Concepts performance against any threats?)
The Growing and Sustained Competitive Advantage Edge
(Growth and development plans to IMPROVE the Value Concepts Sustained Competitive Advantage Edge?)
The Future Possibilities
(International, harvesting, and/or exit prospects to EXPAND the Value Concept?)

George S. Vozikis, Ph.D., Edward Reighard Chair in Management, California State University, Fresno,
(ret.) and currently
Professor in Residence, Chaminade University of Honolulu

PERFORMANCE MANAGEMENT Phase II: (EXECUTION)

The second phase would hopefully consist of an implementation of the results of phase one by the firm on
their own and with constant communication with the developers of international business plan, as needed.

PERFORMANCE MANAGEMENT Phase III: (WHAT HAPPENED?)

At six months to a year, the firms owners/managers should hopefully meet again independently with the
members of the international business plan team. The implementation process toward the resolution of any
perceived problematic issues is reevaluated and modified if necessary. These meetings are critical, because
they ensure that the international business plan moves on track, problems are indeed being resolved, and
very importantly, will never resurface again. Finally, the meetings ensure that the international opportunities
identified for the firm are being exploited and mechanisms are in place for a smooth internationalization
transition from what is to what should be in order to safeguard the long term sustainability of the firm.
23