1. Marco Curti Marketing, Sales and International Business Istituto nazionale per il Commercio Estero Area Formazione Manageriale Innovation & Internationalization in SMEs …………, 5th June 2012

2. 2 “I win my battles also thanks to the dreams my soldiers have when they sleep” (Napoleon Bonaparte)

3. 3 Index 1. What kind of a SME are we? 2. The necessary abilities and skills 3. What Innovation stand for? 4. Market globalization vs/ Enterprise dimension 5. SME positive thinking 6. SME vs/ KFS 7. SME vs/ Internationalization 8. Conclusions

4. 4 1. What kind of SME are we?

5. 5 What kind of SME are we?: the “official” parameters (*) As per Italian law:  MICROENTERPRISE Max 10 employees and yearly business turnover lower than 2 million euro  SMALL ENTERPRISE Max 50 employees and yearly business turnover lower than 10 million euro  MEDIUM ENTERPRISE Max 250 employees and yearly business turnover lower than 50 million euro (*) La Gazzetta Ufficiale n. 238 del 12 ottobre 2005 pubblica il Decreto del Ministero Attività Produttive del 18 aprile 2005, che recepisce la Raccomandazione della Commissione Europea n. 361 del 6 maggio relativa ai nuovi parametri dimensionali per la definizione delle Piccole e Medie Industrie.

6. 6 What kind of SME are we?: the “non official” parameters  PIGMY ENTERPRISE Usually, but not necessarily, small in dimensions (structure, business turnover, number of employees etc …) CAN NOT GROW AND WILL NOT LAST LONG  SMALL ENTERPRISE Small in dimensions (structure, business turnover, number of employees etc …) CAN GROW TO MEDIUM SIZE (if and how, it is to be seen!) AND CAN EVENTUALLY LAST LONG  MEDIUM ENTERPRISE It was a successful Small Enterprise IT COMPETES WITH THE BIG ENTERPRISE BY ATTACKING THE LATTER’S MARKET NICHES  BIG ENTERPRISE Big or very big in dimensions (structure, business turnover, number of employees etc …) LOOKING FOR LEADERSHIP ON THE TARGETED LARGE OR VERY LARGE MARKET/S

7. 7 What kind of SME are we?: the “academic” parameters for internationalization (*)  INTERNATIONAL ENTERPRISE Develops and manages import / export activities without any structural investment abroad  MULTINATIONAL ENTERPRISE Develops and manages domestic and international business also thanks to structural production investments abroad (location of plants and works)  TRANSNATIONAL ENTERPRISE Develops and manages domestic and international business also thanks to economies of scope.  GLOBAL ENTERPRISE Develops and manages business by locating earning (target markets) and costs (sourcing, production, marketing and sales, service) wherever (*) Charles W. L. Hill, “International business – Competing in the global marketplace”, 2005 McGraw-Hill e Svend Hollensen, “Global Marketing”, 2004 Prentice Hall

8. 8 What kind of SME are we?: the “non academic” parameters for internationalization  INTERNATIONAL ENTERPRISE There where international business is: - an integral part of the company Mission / Vision, - looked at, like the Domestic market, - felt as a potential Opportunity, - exploitation of efficiency and effective factors. Consequent to what above, the being of an international enterprise does not depend on the dimension of the company international business turnover (which may be small, medium and big) but on the strategic approach to the market.

9. 9 2. The necessary abilities and skills?

10. 10 The necessary abilities and skills:  THE DISTINCTIVE ABILITIES - What makes us more valuable (different or better) than the competitors? - What do we do to be recognized as more valuable (different or better) than competition? The distinctive abilities are the ones in terms of product and/or service and/or brand that our company is able to offer more or better than competitors to our reference market, thus assuring ourselves a competitive advantage. In other words:: -What’s the core know how of our company? -Which product or service of ours better demonstrates the uniqueness of our Mission / Vision? -For what are we ready to engage with our customers more or better than competition? -Which is/are the value/s that the reference market recognizes to our company more or better than competition?

11. 11 The necessary abilities and skills:  THE EMOTIONAL AND RELATIONAL SKILLS The emotional and relational skills have to do, at different extents and in different times and situations, with: * the understanding of the people’s existing and potential skills; * the “listening”; * the being “close” * the positive thinking; * the soliciting of creativity. The emotional and relational abilities are the indispensable resources for successfully managing the Human Resources working for and/or with us. Since Human Resources are the “blood” of the enterprise, the emotional and relational skills really make the difference!

12. 12 The necessary abilities and skills:  THE ABILITIES TO ADAPT OR CHANGE Since both the social and the economic worlds are significantly and rapidly changing: - The enterprise are to re-consider their Mission and., probably, to modify their Vision - The companies are to look for: * top efficiency in terms of Costs (i.e.: cancellation or outsourcing of non valuable costs) * top efficacy in terms of Revenues (i.e.: ROS)

13. 13 3. What innovation stand for?

14. 14 Reminding that the objective of the enterprise is to maximize its economy and finance values within present and future environments, innovation has to do with: 1.Revenues = Market = Opportunity & Threats a. Ways and instruments for a faster understanding of market needs b. Ways and instruments for more securely managing the Life Cycle curve c. Ways and instruments for better analysis of the Attractiveness and the Suitability of world markets d. Ways and instruments for better and faster outlining the company’s offered Value 2. Costs = Company = Strength & Weaknesses a. Product innovation b. Process innovation c. Distribution innovation d. Communication innovation e. Organization innovation What Innovation stand for?:

15. 15 What innovation stand for?: 3. Finance a. Ways and instruments for financial management and control b. Financial partnership development c. Global sourcing d. Financial ethics and deontology Consequent to all what above, Innovation in and for the Enterprise is to be referred to Innovation in the Development and Management of: HUMAN RESOURCES (the strategic thinking) and their ORGANIZATION TECNOLOGY (the strategic instrument) and its ORGANIZATION

16. 16 4. Market globalization vs/ Enterprise dimension

17. 17 Market globalization vs/ Enterprise dimension  “Globalization” is a neologism used to make reference to happenings which impact over such a planetary scale to overcome the national one.  Market globalization is in reality only one aspect of the larger phenomenon of the social interrelations on a worldwide scale.  Market globalization is the growth of the economic interdependency among countries of the world by: ‣ increase in volume and variety of the world exchange of goods and services, ‣ freedom of capital and labour movements, ‣ faster and easier spread out of technology.

18. 18 Market globalization vs/ Enterprise dimension They say that SME (not including the pigmy ones) have to face the problem of: MARKET GLOBAL DIMENSION VS/ ENTERPRISE SMALL DIMENSION In reality: -One has to take into consideration the “reference market”, that is to say the market which is “reachable” by the company -The reference market for a SME is normally a niche (small) market -Consequently the problem is real only when SME’s “reference markets” become global in terms of dimensions, thus causing economies of scale and experience to become Key Factor of Success -If and when global has a geographical meaning only, it is to be checked whether SME is in front of niches spread around the world and, in the positive, which geographical niches are affordable.

19. 19 5. SME positive thinking

20. 20 SME positive thinking 1.Eliminate sayings like: impossible or not for us!. A small country like Japan has been able to become one of the world economic powers thanks to: 2. Develop capacities to dream and to realize the feasibility of dreams. 3. Understand that Mission and Vision are the first dreams of an enterprise 4. Look for partnership to overcome structural weaknesses (typically the financial, managerial and market knowledge ones)

21. 21 SME positive thinking 5. Be curious and develop Public Relations with all possible Stakeholders 6. Learn more about strategic thinking and implementation 7. Look at change as an opportunity and not as a threat 8. Remember that man is particularly afraid of what he does not know. Hence be “hungry” of knowledge and know how. 9. Remember that practive without theory leads nowhere

22. 22 6. SME vs/ KFS

23. 23 SME vs/ KFS It is out of any doubt that, once the reference market is outlined, today’s KFS stand on: - Technology - Communication - Finance - Organization and management All of them linked in an integrated mix. As a n example you may consider the link among above factors in Social Networking, Web and Mobile Marketing, CRM etc …

24. 24 SME vs/ KFS Listed KFS can be played by SMEs as well, that is to say: -Technology = it is cheaper and cheaper and may support thinking and decision of the other factors -Communication = definitely helped and made easier by available technology as well -Finance = look for partners and/or public funding to sustain the other factors -Organization and management = that’s the new frontier for cost cutting (efficiency) and market fidelity (effectiveness)

25. 25 7. SME vs/ Internationalization

26. 26 SME vs/ Internationalization 1.Internationalization represents a business possibility for every enterprise, including the SME. It is up to the SME to mek it an opportunity or a threat. 2.Internationalization may mean: a. larger and/or more stable business turnover; b. higher profits; c. higher economies of scale and/or experience and/or scope d. diversification of risks; e. product life cycle rivitalization; f. sourcing of know how; g. more prestigious image

27. 27 SME vs/ Internationalization 3. Internationalization requires: a. Scenario visions b. Clear Mission c. Medium-long term strategic thinking d. SWOT analysis e. Value definition f. Marketing Mix adaptation g. Excellent organization h. Competitors’ careful analysis i. Efficient network with vendors and suppliers j. Excellent relationship with stakeholders

28. 28 8. Conclusions

29. 29 CONCLUSIONS At the light of all what above said, SME need help for: 1.Understanding the scenario 2.Looking for the correct business opportunities 3.Designing and developing the suitable strategies 4.Private and public fund raising 5.Human Resources management and development 6.Technology sourcing and use 7.Networking The Agent represents a steady and competent presence for steady and competent SME development in a globalized world.

30. 30 Marco Curti Cell.: 328.0133444 Email: curti_marco@libero.it