Should DataClear Go Global or No?

Greg McNally recently created DataClear, a small start-up that has had a successful first
couple of years. A British company is beta testing a data analysis package, which will perform
similar functions to the ClearCloud data analysis package from DataClear. This imminent threat
of global competition has McNally faced with a dilemma of choosing his company's path.
Several factors play into the decision McNally will make:
1. There are significant budget constraints as the firm is still young and relatively small.
2. There is an evident lack of specialized knowledge and staff internalization among the
team.
3. ClearCloud will need several adaptations to be helpful in different global markets that
can create substantial technical difficulties.
The long-term considerations McNally is facing:
1. Consideration of the coordination costs of internationalizing.
2. A decrease in productivity closely following global expansion.
3. Analyzing the legislation of the countries, ClearCloud will operate to make necessary
programming changes.
McNally can follow several courses of action, but the best option would be to remain in
the United States and continue developing their programs with the team that is already in place.
At this point, it seems too early for the company to expand globally. The capital required to set
up new sales and service locations is beyond what DataClear is capable of currently.
The US market is large enough that not expanding globally at this time will not hinder
their expansion prospects for the future. If DataClear invests its capital in developing the
domestic pharmaceutical, chemical, and petrochemical industries, the portfolio of programs
ClearCloud will support will increase, making a transition to the global market easier. The cost
of this development will be significantly lower than the cost of expanding into one or more
different countries. During this time of domestic development and expansion, McNally can
continue to increase his understanding of the global marketplace, ensuring he is more confident
of a global expansion decision when the opportunity arises again. The global trend is currently
moving more towards cloud computing. Therefore, the demand for their products is likely to
continue to increase. A broader range of programs will make DataClear more desirable to future
consumers.