Global Marketing Strategies for the Futures Market - Case Study Example

Describe the situation discussed in the case. Sperry/MacLennan Architects and Planners is a Canadian based architectural firm which has grown from a one man architectural practice to a thriving 19 people business now specializing in construction of recreational facilities. The firm initially concentrated on the housing market and survived a market downturn in the 1980s courtesy of diversification and creating an alliance with Creative Aquatics which ultimately gave the parent company a firmer grip of the recreational facilities market. Creative Aquatics provided aquatics programming and technical operations expertise (materials, systems, water treatment, safety, and so on) to complement the design and planning skills at S/M. The turnaround was masterminded by two employees who decided to work without pay and their efforts were rewarded when S/M Architects won the competition for the aquatics facility for the Canada games. Buoyed by the success of sports complex design and construction, Sperry Architects now wants to enter into new markets. According to (Keegan 2013) firms enter into new markets to increase profitability, stem inherent risks in the home market and therefore ensure long term business stability. With economists predicting a recession in 1989 and local competition heating up it is clear why Sperry Architects wants to enter into a new market. Identify the key issues for the organization in your selected case. Entering a new market comes with substantial risk, challenges as well as opportunities (Moschis, 1994). Sperry/MacLennan Architects is seeking to enter a new market and must therefore conduct a thorough market research and analysis to increase its chances of success in the new market. In this case S/M Architects must pay close attention to the following. Market Definition/ Opportunities It is imperative that S/M defines the target market it intends to satisfy and the opportunities for growth. Entering a saturated market might not offer many new opportunities. It is also important to identify gaps in the market and weigh the current players in the market while paying close attention to their strengths and weaknesses. Market entry method Another key issue is the mode of entry to the new market. Architects require licensing and this may present a potential challenge while trying to enter a new market. Government regulation Beall (2010) notes that laws regarding business practice vary from province to province as well as country to country. Tax laws as well as well as amount of profits which can be repatriated back home are key issues which should be taken into consideration by S/M Architects before venturing into new markets. Market Analysis/ Consumer behavior Understanding the market dynamics and consumer behavior of the target market is crucial to the success of any firm with intentions of expanding into a foreign market. Cultural beliefs shape the consumption patterns in new markets and this should be put into consideration by S/M. Possible ways the organization might address these issues. As noted earlier diversification presents an opportunity for S/M Architects to take their expertise into a new market giving the firm an opportunity to increase profitability as well as cushion against a predicted economic slump in the local market. The key issues identified above can be mitigated by a number of ways. Joint Ventures Sperry/MacLennan might want to consider entering into a joint venture with an already established architectural firm in its target market. A joint venture has the advantage of partnering with a firm with insider knowledge of the local market. The amount of capital investment is also shared among the partners. Joint venturing comes in handy should government laws require local ownership of foreign firms (Keegan, 2013). The main drawback for this type of market entry mode is reduced profitability and lack of total control over the overall design of the final product. SWOT Analysis Conducting a SWOT analysis is critical in matching S/M strengths and the opportunities available in the new target market. For example S/M has the advantage of experienced architects with a proven track record of designing sports complexes around Canada. This presents an opportunity in new markets whereby referrals would work in their favor. Market Research It is only through market research that S/M will identify market gaps that need to be filled. Courtesy of market research the firm will also identify unique consumer needs and therefore design better sports facilities to meet these needs. Market research will also help identify potential competitors, analyze their strengths and weaknesses and unique ways of creating and meeting demand. Explain the value of market research in the global community. Market research is the process of collecting and analyzing data about potential consumers in a particular market segment (Keegan, 2013). Entering a new market is a risk but this risk can be minimized with a good market research. S/M therefore stands to benefit immensely by carrying out a detailed market research of their target market. Some of benefits derived from market research include. Identification of consumer needs and consumption patterns. Market research helps a global firm understand the unique needs of each market segment and therefore present products which meet these needs. It also helps identify consumption trends and future demand (Cavusgil & Riesenberger 2009). Identifying gaps in the market. It is only through market research that a company can identify niche markets which have not been met. This helps in creating demand for products which might not be necessarily there in the first place. E.g. Introducing swimming pools to a community which didn’t value swimming before. Analyzing competition Market research enables a global firm to understand the local market dynamics in relation to the anticipated competition (Beall, 2010). Understanding customer loyalty to existing products and their willingness to try new products significantly increases the chances of success in a new market. Conclusion Entering a new market presents an opportunity for growth and reliance on a single market. In the case of Sperry/MacLennan Architects and Planners it is also an opportunity to test its expertise and competitiveness in new markets and cushion against a slump in the local market. While it doesn’t guarantee success neither does it guarantee failure and therefore it is a strategy which should be pursued not only by S/M but any other company with ambitions of being a global firm References Beall, A. (2010) . Strategic market research; A guide to conducting research that drives business. Bloomington, IN. iUniverse. Cavusgil, T. S. & Riesenberger, J. (2009) . Conducting market research for international business. London, UK. Business Expert Press. Moschis, G. (1994) . Marketing strategies for the future market. Santa Barbara, CA: Greenwood Publishing Group. Keegan, J. (2013) . Global marketing management. Upper Saddle River, NJ: Pearson Education. Read More