Executive Summary
DataClear, a US based company within its two years of operations since 1998 has occupied a dominant position in the data analysis market of US by serving telecommunications industry and financial service providers. The company feels threatened by the VisiDat’s upcoming data analysis package with the global targets. CEO, Greg McNally and other key personnel have realised the competitive threats and need of maintaining company’s competitiveness. For this, there is a dilemma of whether to internationalise the business or to focus on domestic market by exploring potential industries like chemical, petrochemical, pharmaceutical, etc. Currently, not to go global is the wise decision for company as it lacks capabilities for international business. It can use domestic market expansion strategy, product development strategy, capabilities development strategy to neutralise threats currently encountered. However, company needs to make a plan for global entry in future. In meantime, it must strengthen its base in domestic market and make global entry when it develops stronger capabilities.
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Case Analysis
Strategic Issues
CEO and the top personnel of DataClear are facing some strategic issues which need to be solved out. Those issues are briefly highlighted below: Maintain the competitiveness of the company: DataClear has realised the competitive threat. To ensure its sustainable competitiveness in the domestic market and to counterattack the potential threats from global competitors is the major concern of the company. Whether to enter global market or not and how?: There is a high degree of dilemma whether the company should enter into global market or not. If the company has to go global, it has to develop a global strategy. It has to come up with the mode of entry, build up resource base, product capabilities, network capabilities, and learn about culture, coordination, etc which involve lots of challenges. Expand business in other industries: There is huge potential of market expansion for DataClear in the unexplored industries of chemical, petrochemical and pharmaceutical sector with the potential of $900m within U.S .Company is facing a serious confusion of whether it should fortify its position in home country or opt for global competitiveness.
The company can come up with following strategies to deal with the issues: Domestic Market Expansion Strategy: Under this strategy, DataClear has to focus on its existing core industries and explore the potential industries. For this it has to build specialised sales and service infrastructures. With this strategy, company can strengthen its domestic base in U.S market and maintain its competitiveness. Product Development Strategy: To serve the new markets, company can develop its product, ClearCloud. DataClear can also come up with product modifications and innovations to attract other new industries to further strengthen its domestic base. Capabilities Development Strategies: Under this strategy, the company needs to focus on the U.S market keeping an eye on global opportunities to build its capabilities accordingly.
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DataClear needs to strengthen its base in domestic market, gradually develop its product, resource base, management and personnel expertise and networks to change itself into well groomed business for global entry in near future. Global market has lots of potential and the company can’t shy away from such opportunities. In due course it must come up with strategic options to make global entry in future. Wait and Watch Strategy: Under this strategy, company needs to make proper research and study of global trends, competitors, potential markets for entry, entry mode, etc. Based on such understanding product capabilities can be built up or global entry can be made through new innovations with strong sales and marketing strategies.
Recommendations for DataClear
Current Move to be Taken
In this current situation, CEO of DataClear should not opt for going global as it lacks organisational capabilities for international business. DataClear lacks management and personnel expertise in international business. It has to overcome technical difficulties of product modifications and customisation requirements for global entry. Moreover, global entry requires huge capital base and its immediate arrangement from capital market is difficult and expensive. Selection of mode of entry should involve lots of research. So, currently company must rather strengthen its position in domestic U.S market. However, it must plan to make global entry within the time period of 3-5 years. Some more recommendations are highlighted below:
•Data Clear must at least follow domestic market expansion strategy and capabilities development strategy. Product development strategy will enhance the effectiveness of these strategies. DataClear is strongly accepted and has high competitiveness in U.S market. These strategies will help the company to maintain its competitiveness by taking advantage of unexplored domestic market so as to strengthen domestic base before making global entry. •The company should not make decision in panic based on the information from limited sources just to counterattack competitors without analysing organisation’s capabilities. Wait and Watch Strategy will help company to make proper assessment of global market and to come up with better ways to make entry.
•The company needs to make proper assessment of risks and cost-benefit before going global. In future while going global joint venture with well known company should be given priority. It can help DataClear to get both financial and management assistance and serve the new market in better ways. So, DataClear currently needs to strengthen its base in U.S market and build up capabilities and develop strategies to make global entry in near future.
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