Global Market Research Analysis. Michele Morehouse. University of Phoenix MKT/441. Norma Atkinson

Transcription

1 Global Market Research Analysis 1 Global Market Research Analysis Michele Morehouse University of Phoenix MKT/441 Norma Atkinson

2 Global Market Research Analysis 2 Overview Sperry/MacLennan is an architectural practice that specializes in recreational facilities. The company was founded in 1972 by Drew Sperry since the practice started off as a one-man firm. The original name of the company was H. Drew Sperry and Associates. John MacLennan who was hired on as one of the junior architects later became a senior partner. Throughout the 1970s with the baby-boom enables Sperry to develop a thriving architectural practice as the housing market was expanding. By 1979 two branches had been established in Charlottetown and Fredericton. The establishment of these branches provided a local market presence and allowed for Sperry to meet licensing requirements since it was an aggressive growth period (Aaker D., Kumar V. & Day G.S. 2007). Case Sperry/MacLennan is an architectural practice that specializes in recreational facilities. In order to export the company s services, Mitch Brooks the company director is going to present the plan to the directors in the first week of October. Since the market for architectural services shows signs of slowing, new markets must be opened. The market began to shows signs of slowing down from later 1980 to It was again in 1983 that Drew Sperry gained some ground for winning a competition for an aquatic facility for the Canada Games which was held in Saint James. The original target consisted of recreational facilities. In order to seek new markets Mitch Brooks must reflect on the current activities and project developments since the Canadian sports facilities market is secure. Since economic analysts are predicting a recession in 1989, the company has 19 employees to keep busy and a

3 Global Market Research Analysis 3 competitor on the West Coast, which allowed the company to consider exporting their architectural practices (Aaker D., Kumar V. & Day G.S. 2007). Key Issues for Sperry/MacLennan As Sperry/MacLennan strives for expansion into new markets they are faced with key issues that will impact them both negatively and positively in the fore seeable future. Through identifying the key issues Sperry/MacLennan have a better chance of handling the decisions of markets and geographical locations to expand into. The key issues that Sperry faces are competition, economic recession, slowing of local housing markets, licensing requirements, architectural practices only receive business through five possible processes; developers are not always loyal, technology, and international barriers. Competition Canada has more 30% more architectural firms than the United States, so expansion into the United States would allow for new markets. Since Sperry/MacLennan specializes in recreational facilities they do not have a competitive advantage over other Canadian architectural practices that are into both the commercial and residential markets. Through expanding business into the United States less competition occurs and more availability for growing the business can occur. Economic Recession With a predicted economic recession forecasted by economic analysts for 1989, the need to expand into other avenues is important to keep the business going and to keep 19 employees busy. Depending on the location that is best suited for the type of architectural designs they specialize in Sperry/MacLennan may come across a possible

4 Global Market Research Analysis 4 profit maximization or increased market share resulting from the expansion of business (Aaker D., Kumar V. & Day G.S. 2007). Slowing of Housing Market The demand for the housing market in Canada was in a constant pattern so no room for expanding services was possible. Americans were demanding better buildings so the opportunity to expand in the United States would help with the slowing of housing market in Canada by exporting their services to the United States. Licensing Requirements In Canada expanding architectural services is hard since architectural practices are licensed provincially. The licenses are not easily transferrable. Different levels of licensing exist. Since licenses are hard to transfer from province to province, Mitch Brooks can suggest expanding the practice by entering into joint ventures arrangements with a local company in a specific regional market that Sperry/MacLennan could enter. Five Possible Ways to Receive Business Since architectural practices are limited in how they receive business it can harm several possible business opportunities and attracting clients. Though walks in clients occur it rarely does. The first possible way to receive business is through a satisfied customer that gives a referral. The second way is through a juried design competition in which the only option is to come in first place. The backlash of this is that the costs are too high and compensation offered to other entrants is too low. The third way occurs when a client publishes, Call for Proposals. This is where Sperry/MacLennan rates the possible opportunities and if it has a 75% chance of winning the contract they will take on the project. The fourth way they can receive business is through a potential client who

5 Global Market Research Analysis 5 picks a selected number of architects to make bids on a project and the companies qualifications. The last way to receive business is through the architectural practice hearing of a potential building project and contacts the client and presents them with a bid (Aaker D., Kumar V. & Day G.S. 2007). These five processes are a guideline by how the company can receive business, but if taken too serious when trying to expand operations elsewhere this may have a negative impact and costs the company millions. By keeping an open policy and not limiting how they receive potential clients, this will allow for Sperry/MacLennan to gain new markets. Developers are not Always Loyal When going into joint ventures with local companies especially in other Canadian provinces the company needs to keep in mind that not all buyers are loyal. This occurs most in Nova Scotia where buyers will often change architects with every major project. The company needs to ensure the new buyers upon who the company makes joint ventures with that quality products are being provided with quality service. This will help reflect on the reputation of the company. Technology Backlash One major concern for Mitch Brooks upon analyzing the American markets is that American architectural practices are well ahead in the use of CADD technology. CADD is short for computer-assisted design and drafting. CADD technology allows for conceptual design to facility management. Unfortunately, Sperry/MacLennan has yet to get CADD off the ground. Once the financial assistance is approved through the Atlantic Canada Opportunities Agency, Sperry/MacLennan will be able to start using CADD (Aaker D., Kumar V. & Day G.S 2007).

6 Global Market Research Analysis 6 International Barriers If Sperry/MacLennan decides to expand into the United States international business barriers will need to be crossed. Unlike, Canada, Sperry/MacLennan will have no problem engaging freely in trade in the United States. Mitch Brooks will not have to worry about applying for any licensing in the United States because of the Free Trade Agreement. Architects are able to conduct business in the United States without needing to become qualified under the American Institute of Architects, if they are members of their own architectural associations. In result of being able to expand into the United States Sperry/MacLennan will target New England for the expansion. The reason for choosing New England is because of the geographical location is close to Sperry/MacLennan s main branch. Aside from expanding into the New England region, Brooks wants to evaluate all possible avenues for expansion, so that the company is no missing out on possible lucrative ventures. Global Community Within the global community market research plays a major role. Through the use of market research data can be collected and analyze for the best decision to make in regards to a companies local community and how much to give. By expanding the company the giving goes from being local to global. When partnerships are made with global projects, companies use marketing research to help define the needs of these global partners from studying such factors as the population and income level to determine the direction of giving. Since giving to the global community would involve a partnership with a nonprofit organization the research would be geared toward

7 Global Market Research Analysis 7 understanding what percentage of consumers support or relate to the partnership through market research. Market research can help support the marketing activities that will be used to support the efforts the company is going to support the global community, which can include saving the environment or feeding the hungry. Through understanding how many people may donate or contribute money that is how the consumers help companies set a goal for the money that needs to be raised. Overall market research is the supporting foundation in many partnerships that helps establish the global community. Disney has partnered with several environmental nonprofit organizations in a project called Friends for Change. They use the advertising of the ad tracking through the young adults to how many young adults who are teens age 12 to 16 that are influenced to make a difference (Disney 2009). The market research method used is ad tracking or the rating for the television commercials aired for the projected. Through the number of viewers watching this helps indicate how many people are pledging towards their global community project. Sperry/MacLennan if expanding into internal or the global community in other countries, especially in the United States they need to support the communities in which they will have a local presence in. By supporting and giving to the global community Sperry/MacLennan can create brand awareness and create a base for loyal clients. Reflection Based on the analysis of the case study of Sperry/MacLennan exporting their architectural services, I believe this expansion will be beneficial to the growth of the business. Not only will they gain more recognition, but a better competitive edge over

8 Global Market Research Analysis 8 other Canadian architectural practices that have yet to expand elsewhere. Mitch Brooks choosing New England is a hotspot since it will be still located close to the home office, but far enough to open another branch and gain more potential clients.

9 Global Market Research Analysis 9 References: Aaker D., Kumar V. & Day G.S. (2007), Marketing Research 9 th ed. Retrieved September 14, 2009 from Chapter 3: Case Study: Sperry/MacLennan Architects and Planners, Ed. Wiley Disney (2009), Friends for Change, Retrieved September 15, 2009 from _video_180_pwrshr#/disneygroups/friendsforchange/