The case study titled “Sperry/MacLennan Architects and Planners” (Aaker, Kumar, & Day, 2007) is devoted to representing key stages of the Canadian architectural company’s establishment and development and to the set of issues which are faced by the firm. Founded by Drew Sperry in 1972, the organization soon becomes the workplace for another talented architect named John MacLennan; as a result, the company becomes Sperry/MacLennan. Due to persistent and high quality work, the firm, specializing, primarily, on sports complexes’ designing and recreational facilities’ constructing, manages to achieve an exceptional success in the industry.
However, because of the slowdown expected in 1982-1983 and thus limitation of growth opportunities Sperry/MacLennan is developing the plan of expanding its services to international markets by exporting its operations. Mitch Brooks, junior partner of the company, is responsible for the preparation of the plan of entering the international markets by the firm. To create the plan for exporting company’s services and determine most promising markets, Brooks is focused on conducting market research and collecting specific information regarding potential markets. Among the options of markets, the region of New England is being regarded by Sperry/MacLennan as the most appropriate one. There are three major factors contributing to making such conclusion by the firm: close proximity of the company with the territory belonging to New England, density of region’s population, and similarity of climatic conditions. Nevertheless, Brooks still has certain doubts concerning New England being most desirable international market for the company; because of this, other markets are being as well searched, and a set of potential risks are being analyzed by Sperry/MacLennan (Aaker, Kumar, & Day, 2007).
Key Issues for the Organization
While striving for entering new markets, Sperry/MacLennan realizes that such strategy is associated with specific issues which can influence on the company in either positive or negative way. Sufficient determining of these key issues by the firm can contribute to increasing the company’s capability to handle serious decisions regarding choosing geographical locations and market for the expansion. It is reasonable to define five principal issues for Sperry/MacLennan in terms of its dealing with the plan of entering international markets: the problem of forecasted economic recession, decreasing of the demand in the Canadian housing market, issue associated with licensing’s difficulties, and the concern regarding crossing of international business barriers.
Firstly, a serious issue which is going to be faced by the company is the economic recession predicted by the economists for 1989. Therefore, in order to decrease possible risks’ impacts, it is necessary for the business to increase its market share by expanding into other avenues and to develop a sufficient strategy of profit maximization.
Secondly, because in Canada there are 30 percent more architectural practices, Sperry/MacLennan has to deal with the problem of high competition. As the company does not have strong competitive advantage at the Canadian market, entering new markets seems to be rather desirable step.
The third issue for the organization is lessening of the demand in the Canadian housing market. At the same time, in the USA the demand for the buildings of suitable quality remains high; thus, entering American market by the firm sounds as a reasonable idea.
The fourth concern of Mitch Brooks is associated with certain difficulties regarding the procedures of licensing of architectural practice. In Canada, it is not easy to transfer licenses, and there are diverse levels of licensing’s functioning. Because of this issue, it might not be simple for Sperry/MacLennan to expand its services abroad.
Finally, entering the American market is equivalent to the crossing of international business barriers, which is, by definition, a challenge for any Canadian company, including Sperry/MacLennan. Specific law system and principles of establishment trade relationships in terms of the USA can cause a set of problems for the architectural company.
In case of preparing a sufficient strategy of development by Sperry/MacLennan, the company, might be, most probably, able to address and handle every of mentioned issues.
First of all, it is necessary for the company to understand that there is variety of uncontrollable factors, like an economic recession, which can cause either business’ rise or its fall. To diminish the severity of negative impacts of such factors, it is significant for Sperry/MacLennan to take a set of specific measures, for instance, to save a sufficient amount of currency, cut its expenses, and train profoundly its employees in order to increase their efficiency.
Secondly, to survive in the struggle with its rivals, the company should concentrate its attention on developing its unique competitive advantage. It can be done, for example, by applying new cost-effective and innovative building procedures or offering exclusive service or product for the customers.
Thirdly, in order to strive for its expanding on Canadian market and contribute to the increase of the demand on architectural services, it might be needed for Sperry/MacLennan to introduce certain temporary price discounts for its services. At the same time, lack of demand on domestic market can be compensated by increased sales in American market (Samuelson & Nordhaus, 1985).
Besides, in order to deal with the problem of difficulties with licensing, it is reasonable for the company to start negotiating with partners and customers from the potential foreign markets. In case of these negotiations’ success, it might become easier for Sperry/MacLennan to obtain needed licenses.
What is more, it has to be noted that there might not be serious problems regarding crossing by Sperry/MacLennan American business barriers as there is the Free Trade Agreement between Canada and USA due to which the principles of international trade between countries are considerably eased.
Value of Market Research in the Market Community
After the analysis of the case, it can be determined that the market research has an extraordinary value in the market community. A series of business opportunities can be discovered and analyzed due to conducting the research of the market. The case study is focused on investigating by Sperry/MacLennan most appropriate international markets. It can be seen that after the profound work directed on determining major risks and issues associated with entering American market, the company becomes capable to make constructive conclusions regarding the appropriateness of this new market for the firm and to make efficient decisions concerning future functioning of the company in terms of this market. In other words, market research is an instrument of determining new most suitable markets for the company and defining possible risks on new markets for the firm; as a result, the course on expanding by the company in new markets can be chosen, and potential risks of the activities on new markets can be seriously diminished.
References
Aaker, D., Kumar, V., & Day, G.S. (2007). Marketing Research. 9th ed. Retrieved January 20, 2016 from Chapter 3: Case Study: Sperry/MacLennan Architects and Planners, Ed. Wiley.
Samuelson, P., & Nordhaus, W. (1985). Economics. 12th ed. New York: McGraw Hill Inc.
