Our Objectives in the German-Brazil Year of Science, Technology and Innovation

1. Brasilianisch-Deutsches Symposium 2010 zur Förderung desAustausches von Wissenschaft und InformationstechnologieSimpósio brasileiro-alemão 2010 para a promoção do intercâmbio científico e de tecnologia de informaçãoBrazilian-German Symposium 2010 to promote the exchange of science and information technology

2. Prof. Dr. Edith Rost-SchaudeBusiness Administration, Science and Sociology of WorkAspects of a network for partnership between Germany and Brazil on the field of software production and – marketing My Teaching at the university of Applied Sciences Darmstadt, which is related to the „Brazil Project“: • Business start up and strategic business development • International Marketing • Management

3. Our Objectives in the German-Brazil Year of Science, Technology and Innovation With these presentations in the context of the Brazilian-German co-operation we would like to attract new partners • who share common project objectives, • who would like to accumulate know- how together with us, and • who would like to contribute as scientific partners or partners with practical experience (in the field of economy, in politics, administration, or associations) to the common objectives of the project

4. The project • As a start our project aimed at processing and transfering legal, economic and cultural-linguistical know-how for small and medium-sized enterprises that have the intention to distribute their software products on the Brazilian market. • Therefore a curriculum was developed which shall enable students of our university to get themselves involved in an international co-operation as internationally qualified specialists. This model covers international law, marketing, intercultural training and the Portuguese language. • A memorandum of understanding between the city of Rio de Janeiro and the federal state of Hesse shall intensify the collaboration in science and research and organise a student exchange.

5. further targets • It is as well possible to seek an exchange that works in both directions: to open the Brazilian market to German enterprises and at the same time the German market to Brazilian enterprises. • Scientific co-operation shouldn‘t be limited to the context of software producing companies and their respective market sectors but it should rather embed other economic sectors as well. (projects of our colleagues at the h_da)

6. The main questions SMEs who want to internationalize ask are: • How can I create an interntional company? • Which information and Knowe-How do I have to gather before starting an internationalization project? • How can I get into contact with appropriate partners in the target market? • How can I get personnel, who hs international skills and language know-how? • Marketing-Mix-decision No 1: which products with which quality are prone to be successful on the target market? • Marketing-Mix decision No 2: analyse the price for the software offered, which might be cpmnetitive • Marketing-Mis decision No 3. which are the most promising forms of distribution and service?

7. Why is the product softwareinteresting? A key issue for the development and functioning of the information- and knowledge based society are IT products, in particular: software products. Software has a key cross-sectional function in all businesses The IT branch and particularly software products are of interest for internationalisation projects also because they qualify exceptionally well for e-commerce and thus cause a reduction in the complexity of sales activities. Furthermore, because of its atypical allocation of development expenses and production costs, software is a product that can still be successfully marketed in low-cost-markets if a reimport can be successfully hindered or blocked.

8. Which software categories are most relevant on the Brazilian market?first results of an expert survey • Business-Intelligence products, particularly additional tools for SAP solutions - SAP-tools and service-oriented architecture (SOA) • Software for the production sector like ERP/MES/PLM (Enterprise Resource Planning/Manufacturing Execution Systems/Product Lifecycle Management) or SCM (Supply Chain Management), Embedded Systems, control software • quality management software as well as business technology optimization software • IT-security products • software for mobile services

9. SOHOs and SMEs as target partners why? • Big companies have sufficient and own capacities to internationalize their business • Small or medium-sized companies need help and a proper organization model – e.g. a sort of „bundling“ of different developers in form of a network or cluster

10. Creation of Scientific Know-how In order to meet the project‘s objectives the following has to be achieved in any case (also in diverse markets and different enterprises or sectors): • discipline-specific knowledge has to be acquired • this knowledge has to be implemented in an interdisciplinary context and applied „in the field“

11. Epistemological issues: 1. What kind of knowledge is needed? 2. How is this knowledge attained? 3 How does knowledge become „know-how“? 4 How can knowledge and know-how be transferred?

12. What kind of knowledge is needed? • Knowledge shall be generated about a) the country, b) the market and market-relevant products c) market access chances and condition of the market, d) chances for co-operation, e) legal terms f) cultural and linguistic conditions and g) successful methods of market penetration and the implementation of internationalisation strategies and marketing-mix decisions. • All participants of the project (SMEs, scientists, distributors, associations, universities…) have their own specific interests and a respective knowledge requirement that depends on these interests. • Ultimately a common knowledge-pool is being generated that shall evoke symbiotic effects.

13. scientific knowledge as a contribution to the market-entry-process of enterprises: • Description of the economic system, the country, the Market • Analysis of the market and the capabilities of the enterprise • Defining decisions in the four parts of the marketing-mix – according to the analysis of external conditions of the market and enterprise capacities. • Implementation and help in the market-entry process (project management)

14. “How does knowledge become know-how?“ • Through implementation and critical appraisal of the results • In order not to let this practice become an economical desaster a) a premium, professional consultancy and transfer of know-how as well as b) a professional project management system is needed.

15. How can knowledge and know-how be transferred to business or public administration? 1. co-operation requirements are • Establishing contacts e.g. through symposia, congresses etc. • Formation of clusters / establishing of networks • Elaboration of a co-ordination and management model versus swarm intelligence and chaos theory • Establishment of an it-infrastructure for the network (Internet-platform) • Conclusion of an agreement between partners

16. Example for the intended network h_da co-ordination and management Prof. Wilmer Prof. Rost-Schaude Dr. Tobias administration: Martin Kader Rio de Janeiro DAAD Sao Paulo Brasiliaministries SME AHK universities PUC and UERJ Prof. Almeida Prof. Altinho & Prof. Rojas … SME associations FIRJAN and SEBRAE Internet platform administration: Robert Wagner distributors law firms Germany associations Bitkom 10 SME among others Tuneup, Osco, SAG, … chambers AHK, IHK Mercosur project office

17. How to govern the network / Cluster-Management Two basic models: self-control versus external control • Self-control: system-theoretical models attribute abilities for self-control to the cluster or network. The theoretical basis consists of the chaos-theory, the theory of swarm-intelligence or Michael Porters Clustertheory • External control: the basic assumption is that groups of individuals have to be controlled (leadership, management). The reason is, that there is no instinct in men to orient behavior on the common welfare. Individual interest have to be harmonized with collective interest by coordination of individual behavior. Until now our institute tried to build this steering-center for the network already built

18. Wishful thinking: self-organisation: swarm intelligence and chaos theory • cybernetic model: every bird alligns itself to the closest flying bird by following simple rules. • The result is a “swarm intelligence“ that helps to reach the goal of the collective. Source: Leo LíonniSwimmy

19. How to define and analyse the market environment? • SWOT analysis • PESTLE analysis • Porter analysis of the relevant competitive environment • analysis of the overall market • analysis of the market risks • analysis of the target country

20. the challenge: marketing-mix decisions for the implementation of the internationalisation strategy • depending on the product the requirements and interests of partners and customers differ. • Therefore a clear segmentation and determination of target groups have to be performed. • Marketing-mix decisions depending on the analysis of the competitive environment and on quality requirements are being prepared. These concern 4 fields:

21. Decisions in the Marketing-mix products • products • communication mix • contraction mix • distribution mix communication mix contraction mix distribution mix

22. Product policy, price policy and distribution policy as central decision-fields for our project

23. Requirements on product policy • The Brazilian software industry is highly developed.Not only American suppliers, but also large German suppliers such as SAP and Software AG are active in the market • At the same time there is a high demand for high quality and innovative products, as in many fields – i.e. the e-government - the market in Brazil is much more developed than in Germany • Innovation is related to product requirements for the application of software, but also to requirements regarding new application fields such as the development of Teachware or Groupware

24. Innovation in the product policy • Innovation management: software is a sector with rapidly changing products. So it is extremely important to develop new tools and devices to adapt to the technical progress in this field. The producer has to offer solutions, which help to create value in the b2b-field.

25. Innovation in the product policy • Different innovation models may be used to adapt successfully to the changing surroundings. e.g. open source software or collaborative software development – collaboration with the customer – is one innovation-model. • Another current innovation may be to deliver software as a service, to rent software in the internet and to overcome implementation problems in the existing production scheme enterprises have.

26. Innovation in the product policy • Innovative software, innovative distribution and service-models, innovative and successful implementation - all this has to be specified according to the sector and the methods of software-usage. There is e.g. a big difference between software usage in the retail-sector compared with software usage in the banking sector. People, business ad IT-Infrastructures differ and this makes a difference for software production and software implementation

27. Innovation in the product policy • Deliberate Change management is an important remedy to overcome problems with new forms of software or new application contexts

28. Innovation management in the product policy Prerequisite for success in innovation is organizational flexibility and creativity of the developers *Quelle: Alexander Busch WirtschaftsmachtBrasilien

29. Innovation management in the product policy • Organizational flexibility is more prevalent in Brazil than in Germany. In German companies democracy forms a thin layer, which vanishes quickly if leaders see a chance to return to autocracy .

30. Innovation management in the product policy Brazilian hierarchies are flatter, team-work is for granted and the conditions for creative services are provided

31. Innovation management in the product policy • Creativity of the developer is constrained by standardized tools (which is often the prerequisite for quality management is). Open source is a chance, novel applications and new software products in the cooperative model to develop

32. (Total) Quality management in the product policy • in addition to the requirement to create an innovative product there are also high demands on quality management. • A further research question of our project is about finding the best form of quality-management (e.g. CMMI, ISO 9000 ff, ?) and to construct models of quality function deployment as an appropriate tool to adapt software to the demands of the market

33. Requirements in pricing-policies /contracting policies Pricing of information products • An information product such as software, for example, has a very extreme profile of the cost curve. It is very expensive to develop initially, but then very cheap to produce additional copies. The fixed costs incurred by developing software are high but the marginal costs of production low - similar to pharmaceutical products, but still more extreme in the course.

34. Requirements in pricing-policies /contracting policies • There is no limit to the reproducibility of information goods at a low and constant unit price, as long as the customer demand is maintained.

35. Requirements in pricing-policies /contracting policies • Neither raw material shortages or increased power of suppliers can lead to enforced cost increases, if the producer's rights and his intellectual property are adequately secured.

36. Requirements in pricing-policies /contracting policies • A purely cost-based pricing is not appropriate. There can be set low introductory price.

37. Further requirements in pricing policies • An acceptable level of profitability is achieved at its best if large quantities of copies can be created. This requires a high market volume, which can be achieved often only by bringing in new markets and optimizing communication and service.

38. Further requirements in pricing policies • If the costs of the development of a product are already covered on the domestic market, you may use on the new market a sharply competitive pricing strategy. This is especially important in emerging countries like Brazil, because the price level there is lower than in Europe. This market must therefore be entered with a low price level.

39. Further requirements in pricing policies • differential pricing strategy: because software products can be even disposed of in a one-to-one marketing and direct sales, they can be designed so specificly as a customized product, that different individual price for different customers may be required

40. Further requirements in pricing policies • A re-import to European markets has to be prevented

41. Requirements in distribution policy Direct sales versus indirect sales: 1. The low-cost variant of the direct sales by Internet is being choosed wherever possible – provided that the use is largely standardized.New forms as cloud computing or software as a rented service play the major role today 2. Market success in as many areas as possible through the addition of indirect / partner sales and warranty maintenance and services over the Internet service too 3. Marketing intermediaries like representatives are needed. They must have good networking market and co-operate trustworthy.