Sperry and McLennan Architects and Planners Case
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Sperry/McLennan Architects and Planners Case
This is a case analysis of Sperry/MacLennan (S/M) Architects and Planners, a Dartmouth-based firm seeking to expand its business in the international markets. The following items are reviewed;-the firm’s situations, the key issues that affect the decision to expand globally, and how these issues are addressed. The rationale on the review is that global market research is critical in global business expansion.
Situation
Sperry/MacLennan (S/M) an architectural practice firm specializing in recreational facilities is seeking to export its services. The decision to export services is arrived at after the realization that the market for architectural services in the region is declining.
The volatile and unpredictable environment in the architectural business has triggered the need for the firm to seek and attain a competitive advantage. The firm has remarkable expertise and is client focused in service delivery. However, the volatile economic environment threatens the survival of the business. An option is for the firm to reach for the global market but this is a risk venture as it is not known whether the firm will successfully establish in a new market. A thorough market research in the new markets is highly recommended. The partners are speculating whether it is a good idea to expand from Canada into the U.S and New England markets.
Key Issues in the firm
The main issue in the company is that the partners believe that in order to stay in business, the company should speculate more than just the regional business. The firm is ready to expand its business to the global level but there is need to find out whether the risk is worth taking. Nevertheless, the firm is in capacity to consider expansion and export its services worldwide. First, the firm has gained tremendous recognition through design awards at local level and its reputation in the Canadian market is well secured. These include the award for best design in the construction of the aquatics center facility for the Canada Games that were held in St. John, and the Canadian Architect Grand Award for the design of the Grand River Aquatics. Such awards aid architects to get business through various ways. A firm can submit the award recognition to a potential client who seeks to find out about the firm’s qualification. Additionally, the satisfied client can refer other clients to the firm. Second, the firm has the right focus on the need for excellent customer service through its philosophy of “quality products, quality service for quality clients”. The firm identifies that customers desire novel and innovative designs. Additionally, a good partner architect-Brooks-ensures that works is delivered on time and within budget. The partners believe that with the recognition through design awards and the focus on client satisfaction, they are ready to export their expertise to other global markets like the U.S and New England.
On the other hand there key issues that seem to hinder the establishment of the business in international markets.
Licenses
During the period, issuance of licenses to architects is done provincially and the licenses are not transferable to other provinces.
Technology
Canadian architectural firms have held a good reputation in the international level for good quality buildings. However, the American firms are way ahead in use of technology such as use of the Computer-Assisted Design and Drafting (CADD) which can aid in producing more specific designs at a shorter period of time.
Competition and Nature of market
The firm is knowledgeable about the nature of markets and the looming competition in the international markets, for instance Amherst, N. S., YM-YWCA, a U.S firm that won the internationally recognized American National Swimming Pool and Spa Gold Medal award for pool design. The partners are aware of the opportunities in the U.S market, such as fewer architectural U.S firms as compared to Canada, the shared values of work practices in the U.S and Canada markets, Americans demand of better quality buildings which Canadian firms offer, and the increased population shift to the North East. New England market offers a close geographical proximity to S/M in Dartmouth and thus has similar market expectations. However, market research shows that the U.S market does not promise long lasting business sustenance because of the issue of customer loyalty, and the declining support of federal funding in renovating recreational facilities in schools. Similarly, the New England market does not promise a thriving business because an analysis shows that geographically close markets do not offer best choice for long term market share or long-run profit maximization.
Addressing the Issues
On the issue concerning licensing, the firm can use two approaches: – one, to involve in a joint business venture with the local firms in the new markets, or two, to wait for the promulgation Free Trade Agreement in which architects will be able to trade their services freely across the boundaries as long as they are registered within their provinces.
On the issue of technology, the firm should be ready to incur higher investment costs in technology introduction and training and development of staff that will use the technology (Jain, 2003). A thorough evaluation should be done to determine whether advancing in technology has more benefits than costs, or gives an upper advantage to the firm as opposed to when the firm had none. An organizational culture that is technology oriented should also be developed before the introduction of the technology (Jain, 2003).
Market analysis should be inclusive of competitor analysis (Roura, 2002). The firm should seek to find out the aspects that make their potential competitors to be sort by clients. The firm can carry out a further market research in other global economies; for instance, emerging economies can offer lucrative business but the firm should be aware of other risks involved such as security and varying trade policies.
The value of market research in the global community
Market research involves the systematic collection, recording, and analysis of information relevant to the marketing of a firm’s products and services (Jain, 2003). The objective of market research is to identify and assess how the altering elements of the marketing mix (price, product, promotion, and place) impact the behavior of customers (Roura, 2002). For instance, in the case, it is discovered that quality customers are willing to pay a good amount for quality products and services as well as retain loyalty to the firm, and this is the customer base that S/M seeks to retain. Market research in the global community is necessary because it slightly varies from domestic research (Jain, 2003). This is because at the global level, the business meets a market with different values, customs, cultures, and expectations (Kumar, 2004). This indicates that whatever works for the firm back at home may not necessarily work for the firm abroad. Market research in this case is therefore valuable in providing the firm with information that can be used in decision-making (Jain, 2003). The decision can take two approaches:-first, to determine whether the firm should establish its business in the market, and second; to determine the right strategic approaches that the firm needs to use in order to establish the business in the market.
References
Jain, S., C. (2003). Handbook of research in international marketing UK: Edward Elgar Publishing.
Kumar, V. (2004). International marketing research, chapter 30. Retrieved October 27, 2010, from HYPERLINK “http://knowing.persiangig.com/document/En.%20article/inernational%20marketing%20research.pdf” http://knowing.persiangig.com/document/En.%20article/inernational%20marketing%20research.pdf.
Roura, J.C. (2002). Trading services in the global economy. UK: Edward Elgar Publishing.
