1. What are the arguments for Halogen Analytics going international?

2. What are the arguments for Halogen staying focused on the U.S. market

3. Which of the three international strategy optionsopen its own offices, take on foreign partners, license its productswould you recommend? Explain why.

enter new international markets or get caten alive. Other none of the managers has any international experience and the company would have to hire someone with to foreign distributors as a route to international awareness while keeping a tight rein on expenses. Alles another day winds down, Schaaf and Rockwood are CASE FOR ANALYSIS Halogen Analytics413 choice but to new markets. ready for that step. The company's resources are als stretched to the limit, and some advisors have ward Halogen Analytics. The two had developed a new software that rapid global expansion could spell disasterHalot isn't even well established in the United States, they are and expanding internationally could strain the company's expansion. By giving foreign software companies rights to produce, market, and distribute its RCA software a decision-should Halogen Analytics go global? And would give Halogen enough participation and control to successfully develop its international presence. As closer to a decision about global expansion than they isn't alone in her belief that Halogen has no At the age of 39, after working for nearly 15 years at a leading software company on the West Coast, Alex Schaaf their stock options, withdrawn all their savings, maxed out their credit cards, and started their own business, naming it package for root cause analysis (RCA) applications that they were certain was far superior to anything on the mar ket at that time. Halogen's software was particularly effec capabilities and resources. Ochers have pointed out the tive for use in design engineering organizations because it provided a highly efficient way to eliminate problems in new digital manufacturing processes, including product significant global exposure to even think about entering development, software engineering, hardware design, man- ufacturing and installation. The software, which could be Although Emily tends to agree that Halogen for the used as a stand-alone product or casily integrated with time being should stay focused on building its business other software packages, dramatically expedited problem in the United States, Alex has come to believe that global identification and corrective actions in the work of design expansion of some type is a necessity. But if Halogen does engineering firms. The use of Halogen's RCA software eventually decide on global expansion, he wonders how would find an average of 30 to 50 root cause problems on earth they should proceed in a huge, complex world and provide 20 to 30 corrective actions that lowered defect environment. Sam, the sales manager, is arguing that the rates by 50 percent, saving tens and sometimes hundreds of company should set up its own small foreign offices from thousands of dollars with each application scratch and staff them primarily with local people. Buning The timing proved to be right on target. RCA was just * U.K. office and an Asian office, she asserts, would give getting hot, and Halogen was poised to take advantage of Halogen an ideal base for penetrating markets around the the trend as a niche player in a growing market. Schaaf and world. However, it would be quite expensive, not to me Rockwood brought in two former colleagues as partners tion the complexities of dealing with language and cultural and were soon able to catch the attention of a venture cap differences, legal and government regulations, and other italist firm to gain additional funding. Within a couple of matters. Another option would be to establish alliances years, Halogen Analyties had 28 employees and sales had joint ventures with small European and Asian companiet reached nearly S4 million that could benefit from adding RCA applications to the Now, though, the partners are facing the company's suite of products. The companies could share expenses in first major problem. Halogen's head of sales, Samantha setting up foreign production facilities and a global sales Jenkins, has learned of a new company based in Norway and distribution network. This would be a much less costly that is beta testing a new RCA package that promises to operation and would give Halogen the benefit of the exper outpace Halogen's and the Norway-based company, tise of the foreign partners. However, it might also require FastData, has been talking up its global aspirations in lengthy negotiations and would certainly mean giving the press. "If we stay focused on the United States and some control to the partner companies they start out as a global player, they'll kill us within months! Sam moaned. "We've got to come up with lower-cost approach, that of licensing Halogen's software One of Halogen's partners is urging still a third, even an international strategy to deal with this kind of competition." In a series of group meetings, off-site retreats, and one-on-one conversations, Schaaf and Rockwood Halogen could build brand identity and customer have gathered opinions and ideas from their partners, if so, what approach would be most effective? There's a growing market for RCA software overseas, and new companies such as Fast Data will soon be cutting into Halogen's U.S. market share as well. Samantha Jenkins were when the sun came up