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Copy of Go Global or No

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by

Stefan Collins

on 30 April 2014

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Transcript of Copy of Go Global or No

What dilemma or strategic threat is DataClear facing?
Question 1
Background to the Case
Would you recommend that DataClear expand into international markets at this point in time?
What specific steps should data clear take to position itself for possible expansion overseas?
Go Global or No?
Question 3
Step 1 - Consolidate on domestic market
Step 2 - Restructure organization
Step 3 - Explore Foreign Market entry and ownership strategies
- DataClear in infant stages
- Only 38 employees
- Inadequate capital to expand
Capitalizing on domestic market
1999 = 2.2m sales
2000 = 5.3m sales
2001 = 20m sales
2002 = 60m sales
- provide much needed capital
- establish brand name and awareness
Domestic Expansion
- into pharmaceutical and petrochemical industries
- assume will be cheaper and easier as no cultural/language adaptation
- alot of these natured firms have ties to europe
- more lucrative than global expansion
- current structure inadequate to accommodate global expansion
Organizational Requirements for Successful International Strategy
Corporate Structure
Management Processes
Human Resources
Corporate Culture
- the way reporting relationships and units are organised
- currently small scale and domestically oriented
- need set up divisons and managers

- start with exporting

- marketing > export > global area structure


- Planning, budgeting, coordination and performcnace approasial activities and systems
- accurate figures on expansion costs
- monitor overseas expansion
- people who staff the firm
- expansion need more empoyees
- ensure culturally and educationally qualified
- Expectations, values, beliefs and unwritten rules that guide employee behaviour
- establish consistent culture prior to expansion
Go Global
or No?

Go Global, Eventually...
- 5 Steps
Step 1
The mission statement
- summaries key values and overall organization purpose
- Process of Developing International Strategy
Step 2
Conducting SWOT analysis
Step 3
Evaluate alternative strategies and set strategic goals
Step 4
Develop implementation tactics and plans
Step 5
Create a control and evaluation framework
- exploit strengths
- overcome weaknesses
- monitor
- prevent and rectify errors
Recommendations


DataClear's weaknesses & threats

National Competitive Advantage

Challenge: Small Firm limited

Susan-reactive/informal plan
Developing International Strategy
SWOT analysis

New Strategic Plan:
Exploit strengthen/opportunities (Domestic diversification/Tom)

Overcome weakness/neutralize threats (Home field advantage)

Taking The Plunge


Potential Benefits
$1.5b domestic
$1.26b internationally
Costs > Benefits
Costs are estimated too simply

Lack of management skills

If In Doubt, SWOT It Out
National Competitive Advantage
Exploring Expansion and ownership Strategies
Joint Venture
Multi-Domestic
- shared ownership foreign facility
+ Cheap option
+ Keep controlling stake of technology
+ Access to their Assets (intellectual , Physical)
+Sharing Risk

- Benro unfit candidate - (little Experience)
- need seek more establish company eg SAP
- Cultural or personal problems
- What each person brings to JV could be
Skewed

- independent goals for specific countries because of high need for local responsiveness
- language barriers
- high technical requirments
- ongoing support
+ highly localised and responsive
+ managers high degree of control

- inefficient on global scale
- expensive
Question 2
DataClear founded in 1998 by Greg McNally
Venture Capitalist: David Lester
No international experience

About DataClear

First successful product: ClearCloud

2 versions of the product:
- telecommunications sector
- financial sector

Revenue in 1999: $2.2 million
Revenue in 2000: will reach $5.3 million

Key Employees

Susan Moskowski
- Head of sales
- 2 years experience in Singapore

Tom Birmingham
- Business development manager
- 20 years experience in chemical industry

Future Success

DataClear expanding new industries

Facing new competition: British company, VisiDat
Two Expansion Options

Expand domestically and into new sectors

Enter the Global Market

Possibility in the USA

Adapt ClearCloud for the chemical, petrochemical and pharmaceutical industry

Annual demand could reach $900 million

Global Possibilities

Annual demand for telecommunications and financial sector: $600 million

Annual demand for chemical, petrochemical and pharmaceutical sector: $660 million

Global Issues
Should DataClear establish offices based on Greenfield approach
Or
Enter into a joint venture with Benro, a software company in Norway

- Greenfield approach: establish in the UK for European market and in Tokyo for Asian market

Dilemmas
To expand into new sectors
To go global or not
To go into a joint venture or use Greenfield Approach

Domestic Expansion
Opportunities

New opportunities in a new market

Company does not depend on one sector, so risk is decreased

Possibility for a great profit

Transfer of technological know-how

Decision
Diversify domestically

Not ready for global expansion

FOCUS
Threats

Losing control of primal sector

High initial costs

Specialised sales and service infrastructure

Globalisation
Opportunities
New markets
Company growth
Cross cultural benefits

Threats
More complexity
Rapid change
Cross cultural difficulties

Joint Venture
Opportunities
Combined firm resources
Access to intellectual property
Better understanding of culture company is entering

Threats
Difficult to build trust among partners
Possibility for one partner to use information from the other partner and use it as a competitive advantage when alliance has ended

Cultural Analysis
CONTEXT
DEMAND
RELATED AND SUPPORTING INDUSTRIES
FACTOR
- Universities
- Financial Institutions
- Underexploited market

- Adapted for the petrochemical, chemical and pharmaceutical industries with little product development.
- Joint venture with Desix? Benhro?
- USA
- UK
- Law abiding countries
1) How does your case countries Hofstede differ to DataClear's?
2) If DataClear did expand to you country, should they take existing employees abroad or hire local workers?
3) SWOT Analysis, expanding to you case country
Class Discussion

Regardless of when DataClear commences its international activity what role should the domestic opretation play in the strategy?
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