Globalization and Market Research Task

Globalization and Market Research Task

Among the critical aspects of marketing and development for an organization is market information research. This provides crucial information about the profitable ventures that a business can venture into for profitability both locally and globally. Mostly, after success in the local market, a company ventures into new and existing markets beyond its local boundaries. This requires data analytics to formulate an effective market strategy to venture into the market. Poor market research has led to failure for several companies, such as Starbucks Coffee Chain Restaurant. The current review discusses the case of Netflix and its expansion strategy, as well as the importance of data analytics in global market research while answering core questions.

What were the most important strategic moves that propelled Netflix’s International Expansion Success?

The article authored by Brennan (2018) outlines the two major reasons that were behind Netflix’s success internationally; the expansion strategy adopted and its appellation to its customers. The company employed a strategized market entry technique by first venturing into the countries where the operational strategies were similar to its local market in the US. The experiences obtained from these markets acted as guides in new market entries. By 2015, the media company had ventured into more than 50 countries through the strategy. The way Netflix appealed to its potential customers also determined its success in expansion. Netflix first appealed to local customer needs and cultures through content and collaboration with stakeholders locally.

Why was this investment important? What type of information did Netflix derive from the data collected?

Big data analytics was a phenomenal investment that facilitated the company’s expansion overseas. The second phase in the company’s expansion entailed detailed expansion. Therefore, to obtain reliable data regarding market choices and entry strategies, big data analytics was a relevant investment. Spotfire (2014) noted that the investment provided a basis for understanding and predicting customer behavior. The type of information obtained included information about channels used by potential customers for information access, income, and lifestyle attributes, and cultural factors such as the type of content compatible, which was a crucial consideration in market entry. The company customized the market entry strategies to particular markets based on the information obtained.

What is Exponential Globalization?

Brennan (2018) defines exponential globalization as a market entry and expansion technique that entails a well-strategized and planned expansion cycle, implemented with the aim of expanding into more countries to reach more customers and actualized with an increasing speed. Brennan (2018) suggests that a market entry strategy is a viable approach that other companies can employ to enter new markets.

US Companies that have failed in attempts of Expansion Externally; A Case of Starbucks in Australia

Starbucks is a giant in chain restaurants globally, dealing in the provision of high-quality coffee. In 2000, the company attempted an entry into the Australian market, which did not turn out as expected. Seale (2020) notes that the market entry attempt did not turn out as expected since the local Australians perceived Starbucks’ products as being expensive. Local sellers in Australia had also acquired a stable market pool. The market entry efforts in Australia did not bear fruits, and the company was forced to shut down 61 stores, which led to losses in investment of approximately $ 143 million. Although the company retained a number of its shops in Australia until 2014, the market failure forced a takeover of the remaining shops by Withers Group. The data in the article is reliable since it cites reliable sources and provides links to statistics and data figures mentioned in the study.

Market Failure and reasons why certain companies’ expansion plans have failed in the past.

According to the information by Seale (2020), companies may fail in efforts to enter new markets due to stiff competition in target markets, poor timing, legal restrictions, incompatible cultural practices, and poor market analysis before entry. Lack of expansion capital may also cause the failure of business in new markets.

Part II: Hypothesis Testing

Hypothesis 1: Determining whether the average TiQ is lower than the industry standard of 2.5 minutes (150 seconds). Use a significance level of α=0.05.

Null Hypothesis = The average TiQ is equal to the industry standard of 2.5 minutes (150 seconds)

Alternative Hypothesis = The average TiQ is lower than the industry standard of 2.5 minutes (150 seconds)

H₀ : µ = 2.5minutes vs. H₁ : µ < 2.5minutes

=  =

= –0.6168

The calculated z-statistic score, which is the p-value (-0.6168) is less than the critical value obtained from the Z-table (1.645); we reject the null hypothesis that the average TiQ is lower than the industry standard of 2.5 minutes.

Determining Whether the Company Needs to Allocate More Resources

From the results obtained above, it is recommended that the company invest more resources to ensure that the Time in Queue is less than the current industry average.

Hypothesis 2: Determining whether the average ST with service protocol PE is lower than with the PT protocol. Use a significance level of α=0.05.

Null Hypothesis = The average ST with service protocol PE is equal to PT protocol

Alternative Hypothesis = The average ST with service protocol PE is less than with the PT protocol

H₀ : PE= PT vs. H₁ : PE < PT

Where;            X₁= 149.28, n₁=853, S₁²=34556.46

X₂ = 212.163, n₂=821, S₂²= 36320.9

Since n₁ and n₂ >30, we use a Z-test

but,

= S _p = √ =  = 35421.795

= √35421.795= 188.207

=   =  = -6.36

Therefore, the p-value obtained is -6.36, which is less than the critical value of 1.64. This means that we reject the null hypothesis and conclude that the average ST with service protocol PE is equal to PT protocol.

Determining Whether the New protocol served its purpose

Ideally, the new protocol was introduced in the company to reduce the average service time customers were served. Since the results indicate that there is no difference in service time between the new protocol (PE) and the traditional protocol, the new protocol did not serve the intended purpose. It is recommendable for the organization to make necessary adjustments.

As seen in the case of Netflix and the hypothesis testing for the customer service representative context, a business needs to analyze its current strategies before introducing a new strategy. Other than making decisions guided by illusions, data analysis on insightful metrics guides a business on the most suitable strategy and measures to employ, such as changes in customer numbers, revenue trends, and other metrics.

References

Brennan, L. (2018). “How Netflix Expanded to 190 Countries in 7 Years.” https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-in-7-years

Seale, A. (2020). “Seven Epic Cases of Companies That Failed Internationally.” https://www.firmex.com/resources/blog/seven-epic-fails-by-businesses-that-tried-expanding-into-foreign-markets/

Spotfire. (2014). “Big Data Analytics: The Gateway to Success in New Markets.” https://www.tibco.com/blog/2014/03/04/succeed-at-entering-new-markets-via-big-data-analytics/

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This assignment is intended to give you an opportunity to strengthen your skills in gathering and analyzing business-related information. It provides a deeper understanding of how companies can look at globalization as part of their strategic and operational plans. The assignment has two parts: one focused on information research and analysis, and the other is on applied analytics.

Resources:

Microsoft® Excel®
“How Netflix Expanded to 190 Countries in 7 Years” from Harvard Business Review https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-in-7-years
Call Center Waiting Time

Part 1: Globalization and Information Research

Context: Companies that perform well in their country of origin usually consider expanding operations in new international markets. Deciding where, how, and when to expand is not an easy task, though.

Many issues need to be considered before crafting an expansion strategy and investing significant resources to this end, including:

the level of demand to be expected for the company’s products/services
presence of local competitors
the regulatory, economic, demographic, and political environments

Carefully researching and analyzing these and other factors can help mitigate the inherent risk associated with an overseas expansion strategy, thus increasing the likelihood of success.

As a data analyst in your company’s business development department, you’ve been tasked with the responsibility of recommending countries for international expansion. You’ll write a report to the company’s executive team with your research, analysis, and recommendations.

Instructions:

Write a 525-word summary covering the following items:

According to the article listed above, what were the most important strategic moves that propelled Netflix’s successful international expansion?
The article mentions investments in big data and analytics as one of the elements accompanying the second phase of overseas expansion. Why was this investment important? What type of information did Netflix derive from the data collected?
According to the article, what is exponential globalization?
Not all international expansion strategies are a resounding success, however. Research an article or video that discusses an instance in which an American company’s expansion efforts in another country failed. According to the article/video you selected, what were the main reasons for this failure? Do you agree with this assessment?
Explain some of the reasons why certain companies’ expansion plans have failed in the past.

Part 2: Hypothesis testing

Context: Your organization is evaluating the quality of its call center operations. One of the most important metrics in a call center is Time in Queue (TiQ), which is the time a customer has to wait before he/she is serviced by a Customer Service Representative (CSR). If a customer has to wait for too long, he/she is more likely to get discouraged and hang up. Furthermore, customers who have to wait too long in the queue typically report a negative overall experience with the call. You’ve conducted an exhaustive literature review and found that the average TiQ in your industry is 2.5 minutes (150 seconds).

Another important metric is Service Time (ST), also known as Handle Time, which is the time a CSR spends servicing the customer. CSRs with more experience and deeper knowledge tend to resolve customer calls faster. Companies can improve average ST by providing more training to their CSRs or even by channeling calls according to their area of expertise. Last month your company had an average ST of approximately 3.5 minutes (210 seconds). In an effort to improve this metric, the company has implemented a new protocol that channels calls to CSRs based on area of expertise. The new protocol (PE) is being tested side-by-side with the traditional (PT) protocol.

Instructions:

Access the Call Center Waiting Time file. Each row in the database corresponds to a different call. The column variables are as follows:

ProtocolType: indicates protocol type, either PT or PE
QueueTime: Time in Queue, in seconds
ServiceTime: Service Time, in seconds
Perform a test of hypothesis to determine whether the average TiQ is lower than the industry standard of 2.5 minutes (150 seconds). Use a significance level of α=0.05.
Evaluate if the company should allocate more resources to improve its average TiQ.
Perform a test of hypothesis to determine whether the average ST with service protocol PE is lower than with the PT protocol. Use a significance level of α=0.05.
Assess if the new protocol served its purpose. (Hint: this should be a test of means for 2 independent groups.)
Submit your calculations and a 175-word summary of your conclusions.