Article

23.09.2020

Internationalisation: which strategy should you apply?

Conquering international markets is an indispensable growth lever for companies. Such a project can take different forms or follow different paths: from e-commerce to mergers and acquisitions.

International expansion can be an important growth factor for your company and an undeniable source of opportunities – both commercially and in terms of innovation or resilience. After a complete assessment of your current situation, an inevitable question follows: which strategy should you apply to realise your project? There's no magic formula or mapped-out path: in reality, you often adopt a wide-ranging approach based on various strategies. Nevertheless, we do see some broad outlines. And each has its own strengths and limitations. Whatever you decide, your choice should fit into an overall thinking and be in line with the current situation and the future of your business. The objective? Increasing your chances of success and keeping the risks under control as much as possible. 

1. Direct and indirect export

This is naturally one of the most widely used strategies for conquering foreign markets. You can sell your products abroad through one or more channels:

  • E-commerce: E-commerce is a fast and accessible solution to get 'far' with limited resources. Internet sales have grown very strongly in recent years but have a significant impact on the logistical workload. This includes not only technology and conformity, but also the commercial aspect. You are far from your target market and must deal with competitors from all over the world, while the internet knows no borders – and that's both an asset and an obstacle.
  • A local intermediary: A gamble without too many risks, because you make use of the power of local sales – your agent delivers the customer's orders locally and you transfer them. The only thing left to do is to decide how to distribute your products. In this regard, it's important that you make full use of your knowledge of the foreign market. Think, for example, of consumers' consumption habits and expectations. Although this approach does not require major investments (payments on commission), it isn't entirely without risk. The success of your project is entirely in the hands of your local contact, leaving you to count on that partner's reliability.
  • Commercial distribution: A similar approach to conquering the international market. This strategy can be implemented quickly and is the result of cooperation with independent distributors who are based in your target area. They buy the goods and then sell them, enabling you to benefit from their expertise and network. Unlike the intermediary, this distributor takes several tasks off your hands (invoicing, collection, marketing costs or import costs). Choosing the right partners and determining the terms of the contract is no easy task. After all, your project's success depends on it...
  • Transfer of patents or technology: This is a way to make your know-how or technology pay off, not your products. This transfer of skills gives a foreign entity the right to use your methods or innovation within the framework of a previously established contract (geographical area, duration, etc.). An opportunity to go international where you 'outsource' production, sales and distribution. Contract preparation is one of the stumbling blocks of this approach.

2. Local establishment 

Another model for internationalisation is to establish your business abroad. This means that you go local: you establish your entire value chain in another country, or you produce, distribute or sell your products there yourself. This geographical approach necessarily requires greater investment, but it also gives you more clout. This approach is also a way of reinforcing your resilience: the financial and commercial risks, as well as the pressure on your value chain, are spread over several areas. Over the years, a more flexible approach has also been introduced, allowing companies to move more flexibly in line with the international situation. Various options are also available here:

  • Subsidiary or branch: In both cases, it's a matter of establishing a firm and lasting foothold in the local market. However, the project requires a solid foundation and a long-term vision. You should also think carefully about the legal status: do you opt for a subsidiary or for a branch? Consequently, when making this decision, take into account various factors: the degree of autonomy, the desired degree of decentralisation or consultation, the legal and tax implications, whether or not to produce locally (to take advantage of cheaper raw materials, for example), the financial resources that you can mobilise, and so on. In any case, a perfect lever for applying the well-known formula 'think globally, act locally'.
  • International joint venture: This principle is based on the creation of synergies. Your company joins a company that already has a local presence and both companies complement each other. Each company benefits from the other's strengths while sharing the activity's risks, control and common costs. Such a joint venture or partnership often requires a customised legal structure. As you can see, a joint venture is not an easy marriage. It's therefore crucial that you find the right partner and come to an agreement with them concerning each party's input and responsibilities.
  • Merger or acquisition: This growth strategy offers a few advantages. What's the greatest advantage? A merger or acquisition is a method of consolidating and diversifying your business. It's also a 'quick' way to conquer a new market by exploiting the local company's competitive advantages (technological, commercial, etc.). Such a project naturally entails not only potential benefits, but also risks. For example, you may misjudge the sources of value creation or the risks, or have difficulty integrating.

As you can see, your international project's success depends on many factors. And, first and foremost, on your own strategic choices and your ability to develop a clear vision of exactly what you want to achieve. From the development of a commercial partner network to a sustainable local presence, there are many options that deserve not only thorough consideration, but also professional guidance.

 

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Article

16.09.2020

A full 'assessment' before you go abroad

We can no longer deny the benefits of internationalisation. But is your business ready for it? A thorough assessment to measure your project's success is therefore a must before you cross the border.

Just because your business is doing well in our country doesn't mean that you can just jump into the export market. An international breakthrough is an important strategic (and necessary) choice that requires extensive preparation. The first step is to take a detailed look at the state of affairs of your company. Because that way you can:

  1. Highlight your strengths and success factors: a specific skill, your expertise, your brand image, etc.;
  2. Identify your weaknesses: both internal (poor knowledge of the target market, need for funding, etc.) and external factors;
  3. Prepare your structure for 'new' demands: in terms of human resources and in financial, organisational, legal or commercial terms;
  4. Draw up your roadmap: make the necessary changes, maximise your assets and find the right solutions for your weaknesses.

 

A COMPLETE TOOLKIT

Such an assessment is not market research in the literal sense of the word, although some elements will eventually overlap or complement one another. The assessment should also enable you to gain insight into existing opportunities (competitive advantage, commercial trends, etc.) and threats (changes in legislation, major competition, etc.). To do that, you must be able to look at your foreign target group with the necessary distance.

There are many tools for this. Examples include the SWOT analysis, Porter's five forces model, the Boston Consulting Group matrix or the PESTEL analysis to measure the influence of macro-environmental factors. So, feel free to use those tools, but also remember the importance of step-by-step guidance.  

 

A MUCH-NEEDED SELF-ANALYSIS

Give attention to different elements. To achieve a relevant assessment, you must also find answers to a series of important questions:

  1. Create your 'identity card'
    Take an unbiased look at your organisation. What are your values, culture, references, image, etc.? How are you perceived by others? Does your positioning match your identity? Through these questions, you'll also gain insight into the reasons for your successes and failures on the international market. It's interesting to repeat the positive points and learn from your mistakes. 
  2. Analyze your position on the domestic market
    Take stock of your commercial position. Examine the evolution of your recent results and your weighting in your segment (market share, competition, degree of dependency, etc.). Find out what stage your products and services are in (launch, growth, saturation or decline). Next, you can consider your market's prospects and future: how will it evolve? A very important question at a time where the challenges of the sustainable transition are radically changing many sectors.
  3. Assess your products and services
    Each country has its own specific obligations and standards. So, ask yourself whether your products and services are 'compliant', both commercially and legally. Perhaps you need to adapt them? Or maybe your production or delivery method needs to change (e.g. to respect the cold chain and guarantee reasonable delivery times)? In other words, are you ready for the step from a commercial point of view?
  4. Lay bare your capabilities
    If you want to conquer foreign markets, you must be able to cope with that growth rate on an operational level as well. Can you increase or adapt your production capacity to the new demand? Are you ready for that in terms of supply and logistics? Also take into consideration the reliability of your partners and suppliers. And don't forget that your inventory will increase, and you must also have guarantees in that regard as well.
  5. Examine your financial situation carefully
    Going international means a big investment for your company. So, take a close look at your finances and see whether you have enough funds to bring the project to a successful conclusion. You need these resources, for example, to launch commercial initiatives locally (while waiting for the first revenues), to 'transform' your company in the necessary areas, to support your activity in your own country or to recruit additional staff.
  6. Carry out an analysis in the area of human resourcesTo export, you need qualified and skilled staff (production, sales teams, communication, after-sales service, R&D, etc.). You may also need to train staff or recruit new talent with international experience. Although internationalisation can be an extra motivation for your employees, it will also require additional efforts from them. So, don't lose sight of the 'human' factor either!

 

This complete audit of your structure gives you everything you need to make the right choices. Have you got the commercial strengths, the human and financial resources, the operational capabilities and the necessary experience to take the step? Do you need some extra support to adjust certain parameters? Or are you postponing the launch to find the right solutions for some weak spots? The adventure can begin once you're ready!

 

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Article

06.09.2023

New mobility: the benefits of technology

Is technology the key to moving towards more sustainable business travel? Here’s what Philippe Kahn, Mobility Solutions Expert, thinks.

Now more than ever, businesses need to rethink mobility so that it forms part of the sustainable transition that needs to take place in our societies. Since 1 July 2023, the regulation meaning that company vehicles with combustion engines will no longer be longer tax-deductible by 2026 has started to have an impact. At the same time, Belgium’s Federal Mobility Budget and its recent developments are making this (r)evolution much more concrete and practical. And one thing is for sure: technology – and especially apps – have a key role to play. Philippe Kahn, Mobility Solutions Expert at Arval BNP Paribas Group, explains why.

1 July 2023: a key date

“In the few weeks that have passed since the pivotal date of 1 July 2023, we have already seen a change in the needs expressed by our corporate customers,” says Kahn. "Some of them had already taken practical steps towards sustainable transition. But nowadays, more and more of them also have to address the specific questions and concerns of their employees. How will I be able to use an electric car when I live in a city and have no charging stations available? Do I want to search for a reliable place to charge every day? And am I ready to fundamentally rethink how I get around? Providing a satisfactory answer to these questions is inevitably a priority for employers. As well as the end-to-end management of company electric vehicles – including the question of charging them – more and more companies are starting to rethink their overall mobility policy, analysing all existing alternatives, particularly multimodal solutions. And that’s great news, because it’s essential for their future. So I think the demand for such solutions is only going to grow. Technology, and apps in particular, are key tools for a smooth transition".

Anticipating change to serve companies better

Whereas this issue is only just emerging for many companies, it has been a priority for Arval BNP Paribas Fortis and Philippe Kahn for years. "For more than five years now, we have been anticipating the changes that are now taking place, ensuring that our vision of mobility and expertise go far beyond leasing. We now have an entire department that deals with these matters exclusively. This enables us to meet and even anticipate the needs of companies that have no experience of these issues, and who sometimes feel a little lost when it comes to this revolution in travel.”

A simpler, smoother experience thanks to technology

But why and how is technology playing an important role in this transition to more sustainable business travel? "It’s making the experience of new mobility easier and smoother for its users. And that's where the latest developments in the market are heading," says Kahn. "In fact, that's also what our new Mobility Arval App now offers our corporate customers. It makes it easier for employers to manage the mobility budget established by the federal authorities. This budget, its three pillars and recent developments are crucial factors when a company is rethinking its mobility. But at the same time, it involves some regulatory complexity. That’s why, five years ago, we started developing a whole range of technological tools to help companies deal with these matters. For example, we  make it simple for our customers to manage the combination of an electric car and bicycle within this mobility budget. In this spirit of innovation, and aiming to improve the user experience, our app integrates all facets of new business mobility, which are all accessible from a smartphone. Use of public transport, shared mobility, taxis, and even parking – even though this is not one of the pillars of the mobility budget – everything is in one place. The app also makes it easier to manage transactions: low-value mobility transactions, such as buying a bus ticket, are automatically captured and validated, so manual checks are no longer needed. Similarly, there is no longer any need to advance money to employees or reimburse them for anything, and no need for them to keep and present tickets or any other proof of purchase. In short, our app translates the entire mobility budget, which can be pretty complex, into a user-friendly tool where all the important components are taken into account: car, bicycle, scooter, multimodal solutions, public transport, shared mobility, etc."

Technology as a strategy accelerator

Arval Belgium’s innovations perfectly illustrate why technology is an important accelerator when implementing new mobility strategies. And it goes without saying that what exists today will evolve very quickly, leading to an ever-richer user experience. As Philippe Kahn says, "there are a lot of innovative tools out there already. But one of the challenges, linked to the complexity of the situation in Belgium, is to bring together all the players involved under the same umbrella, so that the result of this collaborative work can be found in a single 'magic' app. The solutions that exist today in Belgium are often local in scope. This is a limitation that doesn’t exist in the Netherlands, for example, thanks to their OV card.  Belgium’s urban planning realities are also a challenge:  outside the major urban centres, it’s less easy to set up mobility hubs in which all modes of travel are accessible."

One thing is certain: for companies, the transition to new forms of mobility is well underway. And the new Arval Belgium app is a valuable tool for those companies. “This technological innovation now makes it possible to mitigate the regulatory complexity for employers, and to make multimodal transport a very fluid experience for employees,” concludes Kahn.

Arval Belgium SA, Ikaroslaan 99, 1930 Zaventem – Registered with the Brussels trade register – Belgian VAT number 0436.781.102.  Company with an ancillary insurance brokage business, registered with the Belgian Financial Services and Markets Authority (FSMA) under number 047238 A. Subject to acceptance of your request.

Arval Belgium SA is a subsidiary of BNP Paribas Fortis S.A.

Article

22.06.2023

Shipping: focus on the impact of decarbonisation and energy transition

At the end of May, BNP Paribas Fortis and the University of Antwerp brought together a number of experts to discuss the many challenges involved in decarbonising the shipping sector. What are the key points to remember?

Established 12 years ago, the BNP Paribas Fortis Chair in Transport, Logistics and Ports - linked to the University of Antwerp - conducts in-depth research to find concrete and innovative ways of creating an increasingly resilient – and sustainable – maritime ecosystem.

Building on the success of its first two major events in 2017 and 2019, the Chair has decided to do it again this year. On 25 May 2023, a number of experts and stakeholders from the port and maritime transport sector gathered at the BNP Paribas Fortis premises in Antwerp to discuss the impact of decarbonisation on the maritime ecosystem.

Here are their main findings...

1 – We need to move up a gear

Shipping is currently the most carbon-efficient form of commercial transport in terms of CO₂ emissions per tonne and kilometre. But it can do better.

So far, industry players have favoured quick wins, such as modifying ship propellers and adjusting speeds. But on 25 May, the experts agreed that now is the time to experiment with new fuels and technologies, and move towards (near) zero emissions. The pace of change is accelerating, but there's no silver bullet yet. The costs (and risks) are huge.

2 – International regulation, please (and only one)!

The regulatory framework is complex and constantly evolving.

The International Maritime Organisation (IMO), which reports to the UN, is committed to reducing the carbon emissions from all ships by 40% by 2030 and by 70% by 2050 compared to 2008.

The European Union has committed to reducing greenhouse gas emissions from shipping by at least 55% by 2030, compared to 1990 levels. By 2024, an Emissions Trading Scheme (ETS) will apply to all ships of more than 5,000 gross tonnes sailing to or from EU ports.

In short: things are moving, and in the right direction. The problem, according to industry players, is that numerous regional and supra-regional programmes continue to coexist. This leads to administrative and financial overload.

On 25 May, all those involved agreed on two points: firstly, that a single international policy is essential, as this is a global sector; and secondly, that players who do not comply with the rules must be sanctioned.

3 – The transition to carbon neutrality will be costly 

The investments required to build new greener ships is estimated at $5 trillion by 2050. The cost of modernising the existing fleet is not yet known, but it will not be zero. In addition, the investment required to renew port infrastructures promises to be huge.

4 – Fuel and/or preferred technology: uncertainty reigns

What will be the fuel or technology of the future? Opinions are divided.

Many types of low-emission fuels are likely to coexist for some time. Electricity will only be used on coastal vessels, ferries and some tugs. Large ships will use liquefied natural gas (LNG) or liquefied petroleum gas (LPG), methanol, ammonia and possibly even biofuels.

Long-distance shipping will initially depend on heavy fuel oil, possibly with carbon capture and storage. Hydrogen has potential, but its density, storage and handling raise questions. Wind, solar and nuclear power are also in the mix.

But the real problem at the moment is that while the number of ships that can run on cleaner fuels is increasing, these fuels are not yet sufficiently available internationally. In other words, supply is much lower than demand.

5 – Banks play a key role

Banks have a key role to play in financing the energy transition. In 2019, eleven financial institutions – mostly European, including the BNP Paribas Group – launched the Poseidon Principles to support the transition to low-carbon shipping. This global framework makes it possible to measure and disclose the carbon intensity of bank loans in the maritime sector. There are now 24 signatories, including Japanese financial institutions. And that’s good news.

Want to know more?

Presentations, videos and photos from the 25 May event are available on this page.

Article

02.05.2023

How are we doing when it comes to sustainable mobility?

A recently commissioned survey by BNP Paribas Fortis on mobility found that this remains a major challenge for the coming years. The bank is determined to play its part.

A survey among 2,000 people, and representative of the Belgian population, on mobility shows that the switch to electric driving is slowing. Almost 80% of those surveyed still drive a diesel or petrol vehicle, and more than a third of them have no intention of trading in their cars for a more environmentally friendly model any time soon. And yet almost 50% want to be driving electric by 2029. But before that switch, some hurdles first need to be cleared. According to two-thirds of respondents, the bank needs to take a proactive role in the transition to sustainable mobility.

  • Only 10% of cars on the streets today are electric, hybrid or run on hydrogen. Users of these vehicles confirm they are very satisfied. Though most have their own charging station, public charging stations are a bottleneck.
  • While fighting climate change remains the main argument for switching, changing mobility habits isn’t so easy. The switch to electric is slow, and more incentives are needed, such as new tax measures, and above all, a commitment from the government. Prices also need to come down. It is clear that the practical issues of driving and charging times mean people hesitate to make the switch.
  • As a result, enthusiasm about new mobility initiatives is rather muted. Although, especially in big cities, an app that combines mobility options has good chances of success.
  • Mobility and work are strongly linked. One in three people spend at least an hour a day travelling to/from work. It turns out that teleworking is a solution for only 50% of the people, and that the other half of the population don’t have the opportunity to work from home.
  • More awareness needs to be created around new mobility. Not everyone is familiar with shared cars, bikes and charging stations yet.

Mobility partner

BNP Paribas Fortis is determined to contribute to more sustainable mobility and be a mobility partner for both professional and private customers. We are doing this by informing audiences of all the advantages of an environmentally friendly switch. And also by offering support through financing, insurance and leasing. Our goal is to provide a global response to tomorrow's mobility needs through innovative services.

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