1) Industry Evaluation

2) Competitor Tracking

3) Market Feasibility & Competitive Study

4) Company Profile

5) Market Entry Strategy

5) Market Entry Strategy

Objective

  • Company E, faced with a stagnant or declining local demand for power transformers and was interested in exploring market opportunities in developing markets of Asia as possible targets for market expansion.
  • Specifically, the study aims to address the following:
  • To evaluate the size, potential, nature and characteristics of demand for power transformers;
  • To determine other factors that influence the local power industry, specifically competition, government, market forces, supply & distribution players, third-party interest groups, and other socio- economic-political forces;
  • To develop possible options for market entry (strategic roadmaps) based on the realities of the market environment;
  • To gauge Company E's internal capabilities in carrying out a market expansion into Vietnam, and build the necessary skills where gaps exist.

Industry Focus

  • Power Transformers

Geographic Coverage

  • China
  • Indonesia
  • Philippines
  • Laos
  • Cambodia
  • Myanmar

Main Sources of Knowledge

  • Industry (power companies) executives
  • National electrification or power generation agency
  • Competitors (other suppliers of power transformers, if any)
  • Power buyers or customer (cooperatives, regional power board)
  • Industry association executives
  • Trade journal editors
  • Government energy regulatory body
  • Power distribution companies
  • Key opinion leaders (KOLs), industry experts, analysts

Project Stages

  • Phase 1 – Market Overview:  a broad sweep of the market to determine whether such a demand for Power Transformers exist;
  • Phase 2 – In-depth Market Evaluation:  a detailed study of the competitive environment in order to get a comprehensive understanding of critical factors affecting market entry, development and growth;
  • Phase 3 – Development of Strategic Roadmap:  an thorough analysis of the competitive environment with the aim of developing a step-by-step action plan for Company E.

Key ResearchTopics (per market)

  1. Phase 1 – Market Overview

    1. Macro-Economic Profile (2004-2008)

      1. Population levels & growth
      2. Number of households & % with electric power (penetration)
      3. Key industries & rate of industrialization
      4. Average national daily (or annual) power consumption

    2. Total Market Demand Volume

      1. Total volume of power transformers
        • Past: 2004-2005
        • Current: 2006
        • Projected: 2007-2008
      2. Other related demand data
        • Number of electric posts
        • Volume of power lines (in miles)
        • Number & capacity of power plants

    3. Discussion on the reasons behind past demand growth and factors that may affect future demand for power transformers.

2.  Phase 2 – In-depth Market Evaluation

  1. a.  Demand Segmentation

    • By region or geography
      • Northern (or Eastern) region
      • Central region
      • Southern (or Western) region
    • By transformer type
      • Single-Phase
      • Three-Phase
    • By source of transformers
      • Imported
      • Locally-manufactured
    • By major players or suppliers of power transformers (top 3-5)
    • Discussion of features or rationale behind the existing market segmentation, as well as factors that may cause possible segmentation shifts in the coming years.

  2. Competitor Profiles (per power transformer supplier)

    • Ownership
      • Company name
      • Contact information
      • Nature of ownership (local company, foreign-owned subsidiary, JV/partnership between local & foreign firms, etc.)
      • Name & profile of parent company or foreign partner (if applicable)
      • Date started in country
      • Market capitalization (if available)
      • Nature of operation (manufacture, assembly, importation, sales, etc.)
    • Organization
      • Identity & profile of key executives
      • Organizational structure: main departments, divisions or units
      • Number of employees
    • Operations
      • Types of power transformers produced (or imported)
      • Production (or import) volumes
      • Production capacity
      • Number & location of production plants or facilities
      • Quality standards or certifications
      • Warranties
      • Other products manufactured (or imported)
      • Other services offered (e.g., maintenance & repair, export activities, etc.)
    • Marketing and Sales
      • Total annual sales/revenue data
      • Segmentation of sales/revenue by geography or product type (if applicable)
      • Pricing practice (or price levels)
      • Key customers served
    • Local partnerships and alliances (if any)
      • Discussion of special business relationships and networks forged with local companies (e.g. raw material suppliers, OEMs, sub-contractors, service providers, finance institutions, power producers/distributors, etc.)
    • Government support or subsidies obtained (for foreign players)
      • Direct support provided by the home government to the subject firm (subsidies, tax breaks, low-cost financing, etc.)
      • Indirect support i.e., political influence exerted by the home government that favors the subject firm (import quotas, duties, bi-lateral trade, contracts in exchange for aid, etc.)

  3. Supply and Distribution Profile

    • Identity of power producers & distributors
      • Name and contact information
      • Key executives
        • CEO
        • Operations Director
        • Procurement/Supply Director
    • Nature of ownership
      • government
      • semi-private
      • private business
    • Operations
      • Geographic coverage
      • Power generation capacity & percentage operating level
      • Types and location of generation plants
      • Current and upcoming development/expansion projects
      • Type and total volume of power transformers utilized
    • Total annual revenues
    • Annual volume of power transformers:
      • Replaced
      • Repaired
      • New purchase
    • Existing key suppliers of power transformers
      • Identity of major suppliers of power transformers
      • Types of transformers supplied
      • Supply volumes
      • Other products or services offered
      • Length (years) of business relationship
      • Total value of business with supplier
      • Special vendor or supplier arrangements
    • Possible new entrants or suppliers of power transformers (if applicable)
      • Identity of potential supplier/s of power transformers
      • Types of transformers offered
      • Supply volumes offered
      • Other products or services offered
      • Expected date of business operation
    • Existing partnerships, networks and alliances
    • Purchasing practice
      • Office, department or individual in charge of purchase contracts for power transformers
      • Bidding process
      • Common terms of agreement
      • Quality control, installation, maintenance, repair & replacement requirements
      • Other requirements
      • Invoicing and payment terms or practices

  4. Government

    • Main governing body for electrification, power or energy
      • Key executives and contact details
      • Scope of authority or function
      • Relevant policies, laws or regulations governing power generation, distribution and sale
      • Relevant policies, laws, regulations or restrictions affecting foreign players in the power generation, distribution and sale sector
      • Relevant policies, laws or regulations governing the manufacture, assembly, importation or sale of power transformers (if any)
      • Other pertinent regulations, laws or policies
      • Requirements for a new entrant into the power transformer business
      • Expected fees (plus hidden costs if any)
    • Other relevant national, regional or city government agencies that influence the manufacture, assembly, importation or sale of power transformers (e.g. Trade department, Customs bureau, Labor office, Environment & Safety, Mayor’s office, City Engineer, etc.)
      • Identity of key agency and contact information
      • Scope of authority or function (or nature of influence)
      • Required documentation and filings
      • Associated costs (real & hidden, if any)
    • Relevant existing or upcoming trade agreements (APEC, AFTA, ASEAN, bi-lateral economic & business agreements, etc.)
      • Name and nature of agreement
      • Impact or importance to the business venture, and manner by which it can be leveraged or favorably influenced
      • Relevant agencies involved and contact information

  5. Other factors

    • Technology changes
    • Non-Government Organizations (NGO) influence
    • Existing bi- or multi-lateral agreements with other nations (or donor agencies) that effectively locks-in the power transformer market against other vendor- nations

3.  Phase 3 – Development of Strategic Roadmap

  1. Evaluation of market potential for power transformers
  2. Identification of opportunities and obstacles that may face a new supplier like Company E
  3. Analysis of relative strengths and weaknesses of existing (or potential) players
  4. Summary of key requirements for starting a business in these markets (whether as an importer or local manufacturer)
    • Government requirements
    • Local partnerships
    • Funding or financing
    • Other special requirements (if any)

Estimated Person-Hours Spent (per market)

  • 600 - 700 hours

Project Timeframe

  • 8 weeks

Deliverable

  • Presentation of findings, analysis & recommendation for client's top management
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