Go Global Case
DataClear was established by Greg McNally, a venture capitalist, and David Lester in 1998. The company’s main products included the two versions of ClearCloud that were made for the telecommunication sector and financial providers. A year into the market, the company made $2.2 million in revenue, which grew to approximately $5.3 million in 2000. Following its success, DataClear is considering venturing into other business sectors by undertaking some product development and recruiting more staff. One of the main threats that the company is facing is the entry of new competitors in the market. However, the company has numerous opportunities in the United States, including diversifying into the petrochemical, chemical, and pharmaceutical industry whose latent demand is $900 million (Kuemmerle 2). At the same time, it might choose to undertake global possibilities by expanding its existing products at a cost of $600 million, or getting into the petrochemical, chemical, and pharmaceutical sector for $660 million (Kuemmerle 2). Given the available opportunities, the big question is whether DataClear should expand into the global market or diversify and remain in the United States.
DataClear is facing three major dilemmas. The biggest dilemma that the company is facing whether it should diversify its operations and how this should be done. The second issue the second issue is whether it should go global or not. Lastly, the company need to decide which the best strategy is to use while expanding into the global market. The first available possibility is to use the Greenfield Approach by opening its own subsidiaries in the UK, for its European market, and Tokio and Singapore for its Asian markets (Kuemmerle 4). The other possibility involves getting into a strategic alliance with a Norwegian software development company, Benro.
Instead of expanding into the global market, DataClear should remain in the United States and seek to diversify its products instead. The company has a small number of staff who do not have any experience in working in the international market. Therefore, seeking to expand into an overseas operation is bound to result in even greater challenges for an organization that does not have any expertise on foreign markets (Oshri, Kotlarsky, & Willcocks 213). The company should take into consideration the fact that the US domestic market offers it numerous opportunities and benefits that could turn into sizeable costs once it chooses to join the international market (Frynas, George, & Mellahi 107). While there are some new entrants into the US market, DataClear should slow down and take time to clearly consider its current situation. Given that the company has the option of expanding into the petrochemical, chemical, and pharmaceutical sector in both the US and global markets, it should seek for ways to make this possible before rushing into an unknown market. It is only through taking all factors into consideration that the company would be able to come up with numerous workable strategic options that will allow it to grow into the global market the most appropriate time.
The biggest dilemma that DataClear is dealing with at the moment is whether it should take the risk and go global or remain in the United States and expand its operations. Given the success and the growth that the company has undergone over the years, it is not advisable for DataClear to rush into the international market. Instead, it should take advantage of its reputation in the United States to diversify into the petrochemical, chemical, and pharmaceutical sector, which will provide it with a better platform to get into the global market in the future.
Frynas, Jedrzej George, and Kamel Mellahi. Global Strategic Management. Oxford University Press, USA, 2015.
Kuemmerle, Walter. “HBR Case Study: Go Global – or No?” Harvard Business Review. Harvard Business School Publishing, 2001.
Oshri, Ilan, Julia Kotlarsky, and Leslie P. Willcocks. The Handbook of Global Outsourcing and Offshoring 3rd Edition. Springer, 2015.
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