Abstract
New and unsaturated markets are predominantly located in countries with low incomes. To successfully establish businesses in these new markets, an increasing globalization of value creation is necessary. The integration of these new markets is challenged by their dynamics, turbulence and regulation. Above all, an initially low and volatile demand as well as high barriers for market entry must be counteracted by economical small-series production. As market development is a major challenge for Small and Medium Enterprises (SME), knowledge about the impact of local conditions on their production strategy decisions is essential. Therefore, we design a recurrent fuzzy model combining country- and company-specific input factors as well as internal production parameters to obtain a transparent and reproducible impact statement. The model allows a simplified development of the expert knowledge base by mapping the influences in two steps. The application of the designed model is based on the example of the aCar mobility project, within which an electric vehicle was designed for local value creation in Africa. By applying the model for different African countries, strategy sensitivities can be identified, and recommendations derived.
Highlights
Entering new markets offers companies a new opportunity, which is gaining importance due to stagnation of previous growth markets
For Small and Medium Enterprises (SME) it is, essential to reduce planning times and to provide these dependencies of the production strategy fast and transparent to achieve a reliable result. For this task we present our model, which allows the highlighting of dependencies and to map decisions based on expert knowledge in a model, in order to reduce the effort for planning new locations
To select an appropriate Multi-Criteria-Decision Methods (MCDM), we evaluate the ability of the methods to present cause-effect relationships, weighting of the criteria, necessary system knowledge and data basis to apply this method
Summary
Entering new markets offers companies a new opportunity, which is gaining importance due to stagnation of previous growth markets. Many African countries strive for local added value by means of tariff and non-tariff trade barriers [2,3]. The inhibition threshold for SME to open new locations in these countries is high. From an operational perspective, manufacturing costs of a local production site must be lower than the sum of imported product manufacturing, transport and tax per piece. The manufacturing costs of a locally manufactured product must be lower than the sum of manufacture, transport and taxes of imported products [4]. Political stability and volatile demand is a risk for companies to invest in local value adding. There are advantages of local production facilities, such as future prospects of a high volume of solvent customers and the contribution to the development of this region
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