DataClear's International Expansion Dilemma: To Go Global or Not?

1. Case Study 5Go global or no? Sarah Bonneville Bryan Weichelt Rebecca Johnson Samantha Miller

2. Setting: • DataClear a software company, was really taking off with $2.2 million sales in its first full year of operation in 1999. • Now, the following September sales could easily reach $5.3 million. • DataClear has thirty-eight staff members. • The future is not so clear as DataClear contemplates “going global.”

3. Major Players • DataClear: • Greg McNally- Founder and owner of DataClear • David Lester- Part owner of DataClear • Tom Birmingham- Business development-manager • Susan Moskowski- Sales team member • Pierre Lambert- a candidate for head of European sales • Sarah Pappas-Greg’s old friend from school, founder of Desix which designs specialty chips for the mobile communications industry.

4. Major Players (cont.) • VisiDat- a British start-up company who is a competitor to DataClear and pushing them at the idea to go global. • Benro- a small software shop in Norway. • DataClear- company which started in Palo Alto, California in the spring of 1998 • ClearCloud- a state-of-the-art data analysis package

5. Brief Case Outline • Greg McNally starts DataClear in Palo Alto, California in the spring of 1998. • Greg and two researches came up with a state-of-the-art data analysis called ClearCloud in September of 1998. There would be two versions, one for the telecommunications industry and one for financial services providers. • Greg realized that ClearCloud had huge potential outside the telecommunications and financial service industries. ClearCloud would be adapted for the chemical, petrochemical and pharmaceutical industries.

6. Susan Moskowski, member of the sales team, brought Greg an article highlighting VisiDat, a British start-up, which is beta testing a data analysis package that was only weeks away from launching. Competition would be rough and it was time for ClearData to go global. • Greg split his team into two groups, group A focusing on building their own organization to serve Europe and group B focusing on forming alliances with companies already established there. • Group B came up with the idea of working with Benro instead of doing all the work on their own.

7. Greg went to Norway to meet with Benro’s CEO, who was interested in doing a joint venture. He also met with Sara Pappas to get some insight on going global since she had experience with her own company. Sara advised Greg to keep doing business in the U.S. • Greg then met with Pierre Lambert who was a candidate they had found for doing European sales. • VisiDat made its first sales to Shell which was worth at least $500,000. • Greg found himself in hard place, a decision needs to be made whether DataClear should expand into international markets or stick to the U.S.

8. Key terms • Joint ventures-is a business opportunity/investment undertaken by two separate organizations. Both control the enterprise, resources, assets, revenue and expenses. If the joint venture is for a specific project, it is referred to as a consortium. The University of Wisconsin has a consortium MBA program in which several of the UW schools collaborate toward this one project/program. • Venture capitalist-is the individual who invests the time and financial support to a start up or already established business in hopes of a hefty return on investment (ROI). The venture capitalist is not seeking to donate funds, they are investing in hopes of a significant financial return.

9. European Labor Market-To ensure a decent working environment throughout the EU and of protecting workers' rights continues. Common standards for all cover minimum rules on working conditions, collective redundancy, part-time and temporary work, health and safety at work, maternity and parental leave, equal pay for equal work, and protection against sexual harassment. • Across the EU, common legislation outlaws discrimination on the basis of gender, racial or ethnic origin, disability, sexual orientation, age, religion or belief.

10. Assignment Questions 1) what dilemma or strategic threat is DataClear facing? • DataClear has had the data analysis market to itself for two years. Now a British start-up company VisiDat is joining the market. • DataClear is being pressured to expand their company to international markets.

11. 2) Would you recommend that DataClear expand into international markets at this point in time? Either way, fully explain the basis for your recommendation. • Their foothold in the US isn’t extremely strong at this point and we feel that they may be spreading themselves too thin by expanding internationally so early in the game. Greg spoke with his old friend, Sarah, who voiced her recommendations to build a strong foundation in the US and that DataClear has more options for domestic success than her business, Desix.

12. 3) If your answer to question 2 was yes, lay out specific recommendations for exactly how DataClear should proceed to go global in the near term. If the answer to question 2 was no, what specific steps should DataClear take to position itself for possible future expansion overseas? • DataClear’s next steps: • Establish a strong foundation with domestic partners and customers. • Expand into new markets within the US. • Establish a Global Plans/Operations Committee. • Continue to research the market for 6-12 months. • When financial stability is met (and DataClear is able to fund it’s own expansion globally) locate potential international managers, work with consultants, and look to expand to Europe and Asia.

13. Bibliography • "Activities of the European Union - Employment and Social Affairs." EUROPA – The Official Website of the European Union. Web. 18 Jan. 2011. http://europa.eu/pol/socio/index_en.htm • Adekola, Abel, and Bruno S. Sergi. Global Business Management: a Cross- cultural Perspective. Aldershot, England: Ashgate, 2007. Print. • "Venture Capital." Wikipedia, the Free Encyclopedia. 14 Jan. 2011. Web. 18 Jan. 2011. http://en.wikipedia.org/wiki/Venture_capital