GI, Going International

By Patrick Darnell
Your presentations were very well received. Yet, having no previous work experience with moving into international markets, you think it might be best to contract with an external service to research international markets. In the discussion board, meet with your marketing team and discuss the following challenges ahead of you. (CTU, Task Detail; Dec 2006). Consider and discuss the following:

Title: Going International, GI (SAP; 06/01)

1. What are the key considerations in choosing such a partner?
Key consideration: Is it profitable and will it add value?
Most USA based companies go forward in international markets because costs of materials, components, assemblies and real estate often is less than in US. In JavaJoy desire is to “look” at international opportunities and risks. Could it turn out that the firm has a high “ratio of outsourcing?”
Paul Strassman says, “A company’s outsourcing ratio [is] defined as purchases divided by sales...” The worksheet Strassman provides “only indirectly computes amounts a company purchases.” For most company decisions to Going International, GI, effort is related to “basis for decreasing taxation” liabilities (Strassman, Paul A; March 2005).
Without more contextual information, reasons for owner Hank Sanchez’s brainstorm to go international is assumed to “add value via tax savings... and that includes payroll, depreciation, cost of interest and taxes, plus all profits”(Strassman, Paul A; March 2005).
2. What would you expect of them?
Key consideration: “What portion of its internal business controls” is JavaJoy willing to give up for international growth (Para. Strassman; March 2005)?
Strassman warns “Unfortunately, none of generally accepted accounting or financial reports reveals how much a company has placed its business functions in hands of suppliers.” I find international expansion to be a natural evolution for JavaJoy GI. I also believe there are numerous suitors vying for opportunity to share in risks, costs and profits of the coffee brewer.
Would the future partner be very willing to divulge annual expenses and its debt or litigation, in transparency as known in negotiations? Transparency on JavaJoy’s side is “labor and directly related expenses, depreciation costs, interest costs, non-op costs minus expenses, special income, subtracted losses, income taxes, and other income” (Strassman, Paul A; March 2005).
Costs divided into the net sales will give a ratio: if it exceeds 50% the ratio will have meant JavaJoy GI releasing greater portions of control to suppliers international or otherwise.
Determination by using risk aversion ratios is the best way to approach an outsourcing market research partner. It will set the grammar of negotiations when expectations are reviewed with prospects.
3. How would you go about finding such a partner?
Key Consideration: Where does coffee come from?
The “innovations in global commerce have lowered costs and expanded the reach of purchasing transactions” means JavaJoy GI probably has already trans-national pipelines (Strassman, Paul A; March 2005).
Chief Information Officers are key personnel for deciding on an international research partner. Innovation in information technology is a major indicator for merging with any other company. To be a “strategic” partnership, JavaJoy GI will be obliged to look at costs of “intra-organizational matters from those that deal with suppliers to customers” (Strassman, Paul A; March 2005).
Once biggest and best, and most efficient supplier is found, JavaJoy has opportunity to find out if they are involved in international market research or have it in their sights. Outsourcing market research is a very good item for opening up vertical markets with their new prospect. Also cost reductions can be realized as the relationship becomes more transparent.
4. What would your selection criteria be?
Key consideration: So far high price of JavaJoy Inc products has limited growth.
“The JavaJoy product line is very well known and highly respected in coffee industry but, due to its high price JavaJoy has had limited success” (CTU, Task Detail, 2006). Selection for a GI partner is based on the vision statement Hank Sanchez, JavaJoy Owner, has developed. Marketing forecasts will have included research into these categories:
· Company must grow
· How can this growth be accomplished
· What are possible alternative approaches
· Which are best strategy/ approach
· What growth can be anticipated
· What are threats to growth
Moreover, ultimate decisions concerning “how to grow” constitute strategic planning; providing accurate and timely information, and supporting strategic planning process. To provide the answers, the potential partner must appear willing and able to provide and deploy control for gathered data and developed information about:
· Current market size
· Growth potential
· Buying habits
· Distribution channels
· Competition
· Cultural diversity
· Costs versus added value
5. Is marketing research process you have learned applicable partly or wholly in this JavaJoy GI effort?
Key Consideration: With his new market growth vision as the driver, Hank wants to “recast his 5-year strategy to take advantage of expanding markets,” and has decided international incursion is a remedy (CTU, Task Detail; Dec 2006).
Discussion: Learn > Plan > Deploy
Learn >> we have been learning frameworks of market research, and those lessons will provide structure to facilitate as we search for an international research partner. The firm is not looking for another middleman partner, as JavaJoy GI is already high priced. The method then is in applying what has been learned to what will be international strategic planning with all contingency. Define general research areas as primary and secondary. Qualify proposed questions for each area with qualitative research. Apply 6 stages of the marketing research process in extensive research.
Plan >> Clarifying the Research Question ~ Proposing Research ~ Designing the Research Project ~ Data Collection and Preparation ~ Data Analysis and Interpretation ~ Reporting the Results ~ (Cooper & Schindler, 2006, p. 86)
· Can JavaJoy survive in international high-end coffee brewing markets?
· What are trends in coffee consumption?
· How will competition measure up in international markets?
Deploy >> thus, JavaJoy GI will have found a partner who will have capacity in delivering:
• Product acceptance
• Coffee consumption
• Competition
• Regional analysis
• Global partnerships
• Financial
Marketing campaigns
• Primary Research
• Secondary Research
• Qualitative Research
• Quantitative Research
• International Research Companies
• e-commerce transactions
• Automated marketing campaigns
• Full reporting capabilities
• Surveys
• Interviews
• Internet Research
• Analyze
• Reduce
• Interpret
• Develop Website Catalog
• Recommend (CTU, DB; Dec 2006)
6. Is it more cost effective to do research yourself?
Key Consideration: Core Competency of JavaJoy Inc...
“Because of the ease of use of [International Financial Reporting Standards, IFRS] software, even students who lack technical expertise can work with the system in a structured way, and I can finally concentrate on my core competence as a physician, says Gerhard Polak, Manager and Publisher, on Going International”(SAP; 06/01).
JavaJoy GI can learn from every GI industry some fundamental lesson. JavaJoy is not an international marketing firm. Historically, JavaJoy takes bean and grinds and brews it to perfection.
I am certain that rummaging around for a suitor to partner up with is the only answer that will have most positive impact toward implementing growth and expansion visions of Hank Sanchez and JavaJoy GI.
Once its immediate business-system needs are satisfied, JavaJoy GI will investigate additional ways in which it can benefit from hiring consulting groups. The result will be praises for its professionalism and responsiveness to global outsourcing. JavaJoy GI will continue in its role as partner exploring how the solution can further improve its global markets doing business overseas.

References

Cooper, D and Schindler, P; (2006) Marketing Research New York, NY: McGraw-Hill Companies

CTU Online, (Dec 2006) Small Group Discussion Board, MKT350-0604B-03, JavaJoy Inc

CTU Online, (Dec 2006) Task detail, MKT350-0604B-03, JavaJoy Inc

SAP 50 077 808; (06/01) GOING INTERNATIONAL Business One Promotes Medical Training, sap com contact sap

Strassman, Paul A; (March 2005) Outsourcing: what ratio is right, Baseline, 2001-2006 Ziff Davis Publishing Holdings Inc, baseline mag international