FUNDAMENTAL ISSUES IN THE COURSE OF

PREPARING A BUSINESS PLAN

o Issues used to be considered before, during and final review of
international Business Plan.
 First Fundamental Issue: INTERNATIONAL FOCUS
Although domestic and international plan have many similar components, an
international plan is built on fundamental premise that a company is looking at
two or more countries as target markets for potential sales.

A plan can have an international focus only when the global aspects of a
business are identified.
To Identify global aspects of a business: ask the following questions:
a. Can the company’s products be adapted for use and sale in a foreign market? If
so, which foreign markets?
b. If there is potential demand, have you done sufficient research to develop an
appropriate marketing strategy in each target country?
c. Has the company identified foreign partners that could assist in local
manufacturing, operations and distributions?
d. Does the company’s organisational structure include resources for scanning
foreign markets for new opportunities?
e. What additional sources do you need for domestic-focused company to
implement a global strategy (eg. New managers, capital, foreign officers, etc.)?
 Second Fundamental Issue: COMPETITIVE ADVANTAGE

Of the many people on earth what makes you think you can
accomplish your business goals?

Identify your competitive advantage. It is to learn how to include

relevant advantages in your plan and provide procedures and resources
for implementing them in target markets.

A Business can gain competitive advantage by protecting your ideas

and intentions. Also by taking inventory of intangible assets such as
patents, procedural manuals, trade secrets, other forms of intellectual
rights, exclusive distribution of contracts and manufacturing agreements.

The Key to this- prepare the PESTLE and SWOT ANALYSIS and INVOLVE
ALL STAKEHOLDERS.
COMPETITIVE ADVANTAGE:

To share is human, an exciting idea might run out in the streets and
competitors will see the same opportunities that you do.”

To keep our competitive advantage do the following things

1. Make your plan confidential

2. Use non-disclosure agreements
3. Company confidentiality training
4. Memorandums and guidelines, registrations safe.
5. Establish barriers to competitors- legal terms (within limits of fair trade)
6. Special contractual agreements made with suppliers and manufacturers
to try keep them away from your competitors.
7. Be flexible and allow for changes in markets, technology, locale, labor
and similar conditions and maintain competitive advantage.
 Third Fundamental Issue : THE AUDIENCE

o Every entrepreneur person proposing a new venture for an existing

company must write a plan with specific audience

o The Core information of the business plan will remain same regardless
of a audience

o But pay attention to details that reader needs to know

THE AUDIENCE

You need to determine who will be reviewing your plan

and using the information included in it.

Always review your business plan outline and determine

which components will be most & less useful to your
reader.

Different audience have different interest in your plan, so

emphasize on marketing if it’s a Marketing manager who
wants to see your plan.
 Fourth Fundamental Issue: A CLEAR PLAN OF ACTION

A great idea is worthless without proper execution.

Identify the plan of action:

1. The 3 M’s:
Manufacturing, Management & Marketing.
Methodology, Management & Marketing. (Service business)
2. Don’t talk too much on product or service.
3. Talk about the manufacturing, managing and marketing side of
it.
4. Get it to market at a profit.
5. In International business, communications and logistics are more
sufficient.
 Fifth Fundamental Issue: A GREAT TEAM

Strength of a Company is its people. Management must have a clear vision and
commitment
Each person must be carefully selected for the talent he can bring to the
organisation.

Identify both the people and position that you need to fill.

Invest in Human resources- select people who are committed and have a vision
that gives clear indication of loyalty.
 Sixth Fundamental Issues – Organisational Analysis

Organizational analysis is a process of self evaluation.

Organisational analysis helps to know the potential value of new
opportunities.
Sometimes organisational analysis can be done by outside consultants to
learn the strength & weaknesses of the company.

Organisational analysis must include the components such as:

1. Functional areas (e.g. for a manufacturer, production, marketing,
logistics & purchasing).
2. Financial position of company & condition of fixed assets.
3. Position of company in domestic market & future trends to seek
outlets for products.
4. Managerial and technical skills of existing workers.
 Seventh fundamental issue: Requirement of Confidentiality
Eight Fundamental Issues: A schedule for implementation

MICHAEL PORTER DIAMOND MODEL

This is a model that is designed to help understand the competitive

advantage of nations or group possess due to certain factors available to

them, and to explain how governments can act as catalysts to improve a

country’s position in a globally competitive economic environment.

MICHAEL PORTER DIAMOND
MODEL
Firm strategy
Chance structure and
rivalry

Factor conditions Demand conditions

Related and
supporting Industries Government
DIAMOND MODEL

• Factor conditions are human resources, physical resources, knowledge

resources, capital resources and infrastructure. Specialized resources
are often specific for an industry and important for its competitiveness.
Specific resources can be created to compensate for factor
disadvantages.

• Demand Conditions in the home market can help companies create a

competitive advantage, when sophisticated home market buyers
pressure firms to innovate faster and to create more advanced products
than those of competitors.
MODEL

• Related and Supporting industries can produce inputs which

are important for innovation and internationalization. These
industries provide cost-effective inputs, but they also participate
in the upgrading process, thus stimulating other companies in
the chain to innovate.

• Firm strategy, structure and rivalry constitute the fourth

determinant of competitiveness. The way in which companies
are created, set goals and are managed is important for success.
But the presence of intense rivalry in the home base is also
important; it creates pressure to innovate in order to upgrade
competitiveness.
MODEL

• Government can influence each of the above four determinants of

competitiveness. Clearly government can influence the supply conditions
of key production factors, demand conditions in the home market, and
competition between firms. Government interventions can occur at local,
regional, national or supranational level.

• Chance events are occurrences that are outside of control of a firm. They
are important because the create discontinuities in which some gain
competitive positions and some lose.
QUESTIONS FOR DISCUSSION

o “Why do some nations succeed and others fail in international

competition?”

o How can you explain the existence of the double diamond model
of Michael Porter.

o These factors (Porter’s model) interact with each other to create

conditions where innovation and improved competitiveness
occurs. Discuss.
 DOUBLE DIAMOND MODEL
Double Demand (DD) based 9-Factor Model

Business Context Politicians & Bureaucrats

Factor Physical Demand Human

Workers Professionals
Conditions Factors Conditions Factors

Related Industries Entrepreneurs

Domestic diamond International Diamond