Intelligent International Expansion

Who We Are

• Multinational brand development agency focused on strategy, communication and implementation

• Core team of 30 people with 100 regional experts in network

• Headquartered in Antwerp, Belgium

• Brand expression consultancy focused on helping brands in transition

• 23 years of experience in Brand Strategy and Brand Identity

• Headquartered in Boston, USA

Clients Include:Clients Include:

Our synergistic expertise and unique experience brought us together to offer an intelligent

approach to helping companies expand internationally.Branding Experts

with experiencein US Market

Branding Expertswith experience in

EU and MENA Markets

Why Explore International Expansion?

• Minimize risk of macroeconomic downturns in domestic market(s)

• Companies exclusively focused on the US market are at a disadvantage when multi-national competitors enter the US market with their vast knowledge and resources

• Slower growth compared to rivals curbs investor appetite and lowers company’s valuation

GDP Growth Rate

• Global economy grows faster than US economy

• Businesses can benefit from faster growing markets to offset domestic slowdown

Annu

al G

row

th0%

1%

2%

3%

4%

2014

2015

2016

2017

2018

World US EU MENA*

*MENA: Middle East and North Africa

Benefits of International Expansion

Expands talent pool and

capacity for innovation

Helps to move capital from low

margin and limited growth markets to those with higher

margins and larger growth potential

Provides direct access to higher

value foreign production inputs

Helps build strategic assets,

such as distribution

networks or new technology

Companies stay focused on their

core competences by finding more customers for

existing products or services

Challenges of International Expansion

Replicating your home market business success in other countries is dependent on many factors

regional culturalnuances

tax and regulatory

issues

talent managemen

t

cross-border team

spirit

local infrastructu

re

level ofcorruption

CORE ISSUES

The Trial and Error Approach

Many companies rely on trial and error when planning an international expansion. Unfortunately, this approach is far from perfect and provides unpredictable and unreliable results.

A Story of Hubris and Repeated Mistakes

• 1998: Walmart opened first stores in Germany in full confidence of a looming success

• They opened with low prices, zealous inventory control and a large array of merchandise

The Results• with their remote American-style shopping centers they failed to

address German shopping habits, which are formed around neighborhood corner shops and daily purchasing of perishables

• 8 years and $1b later, Walmart leaves Germany with a bad taste in its mouth and a vague understanding of what went wrong

”We made mistakes. If you want to be successful in a

foreign market, you have to know what your customers want. That's the most important lesson.”

Walmart Germany's CEO, David Wild

A Second Failed Attempt

• 2007: Walmart went to Russia, where shopping habits are similar to those in US. This time they failed because they could not agree on terms with major suppliers

Takeaway: Trial and Error teaches what not to do, but it does not give a full picture of what needs to be done

The Intelligent Approach

Brands can penetrate foreign markets by using a comprehensive modeling approach. This helps to identify and address market risks, adjust the product offering to t speci c markets and ensures total integration of foreign assets with the parent organization.

A Story of Calculated World Domination

• Swedish apparel retailer: 3,500 stores, 69 countries, 6 continents

• Grows by 10-15% a year without franchising

• H&M’s strategy: runway fashion delivered at affordable prices

• Intelligently designed world domination campaign, which takes into account the full array of local specifics as well as their fit with the company’s own culture and values

The Results• H&M adjusts its local offering based on the understanding of

what runway fashion means in a specific market and what are truly affordable price points

• The company lives off feedback from its consumers and continuously adapts to serve them better

Takeaway: Approaching international expansion intelligently allows brands to serve consumers in various markets without sacrificing their own identity and values

Intelligent International Expansion vs Trial and Error

• 73% of US companies use a predominantly trial and error approach to expand internationally

• An equal percentage has less than 5% of revenues coming from abroad

Intelligent International Expansion

Trial and Error

Based on Scientific Medhod

Creates blueprint for future expansion

Creates unique path and a hard-to-copy knowledge-base

Reduces risk of failure

Efficient process

Can quickly learn from

Why It Works

This scientific method mitigates the risk of uncertainty in managing international expansion without the need of expensive and potentially harmful trials in an atmosphere of novelty. • evaluation of factors that contributed to

brand’s local success and their replicability in foreign markets

• real intelligence from international markets• country-specific experts’ advise

Our Process

Brands must adapt to and manage many variables in order to scale and expand effectively

Product Market

Risk

Adapttastesize

formulationdesign

Managecultural

economicfinancial

regulatory

OpportunityScale

focuseconomies of scale

technology

Expandmore customers

increased knowledge

Our Process

• detailed analysis of the factors that contribute to success of the company and the brand in the home market

• identify foreign markets where conditions allow for the success factors to turn into growth drivers

Success Factors Growth Drivers

Cultural

Economic

Financial

Regulatory

Identity

Operational

What You Gain

• Expansion roadmap - where, when & how• Brand identity adaptation• Local expert guidance for

in-market execution• Analysis of factual data and

course correction• Strategy adjustments for the

intended market entry