Case Study Narrative2. Major Factors Driving InternationalizationTechNovas push to globalize is driven by: Market saturation: Declining U.S. revenue growth (from 12% to 4% YoY). Client demand: 40% of existing clients operate in Europe and Asia and demand localized support. Technological enablers: Cloud infrastructure allows scalable deployment but complicates data governance. Competitive threats: Rival firm LogiChain has already established a transnational ERP system in 15 countries.3. Developing an International Information Systems ArchitectureThe CIO proposes a hybrid architecture: Centralized core: A unified cloud-based ERP hosted in AWS (U.S.) for financial and R&D data. Regional hubs: Local data centers in Frankfurt (EU), Singapore (Asia), and Johannesburg (Africa) to comply with GDPR, PDPA (Singapore), and POPIA (South Africa). Integration challenges: Legacy CRM systems in the U.S. must connect to regional hubs without latency.4. The Global Environment: Business Drivers and ChallengesDrivers: Cost reduction: Labor costs in Southeast Asia are 60% lower than in the U.S. Market diversification: Africas e-commerce sector is growing at 25% annually.Challenges: Cultural barriers: Negotiation styles in Japan (consensus-driven) vs. Germany (direct). Regulatory fragmentation: GDPR fines (up to 4% of global revenue) vs. Nigerias lax data laws. Infrastructure gaps: Only 35% of rural Southeast Asia has reliable internet.5. Alternative Strategies for Developing Global BusinessesThe task force evaluates four strategies:1. Global standardization: Uniform systems but risks alienating local markets.2. Multidomestic: High customization but costly and complex to manage.3. Transnational: Balance global efficiency with local responsiveness (e.g., McDonalds glocal menu).4. Export strategy: Minimal adaptation but limited competitiveness.6. Global Strategies and Business OrganizationTechNovas current functional structure (siloed departments) clashes with the need for regional autonomy. The COO suggests a matrix structure with: Global divisions: R&D and Finance centralized in the U.S. Regional divisions: Sales and customer support decentralized to hubs.7. Global Systems to Fit the StrategyProposed systems: Unified ERP: SAP S/4HANA with regional modules. AI-powered analytics: Real-time dashboards for monitoring regional performance. Blockchain: For transparent cross-border supply chain tracking.Questions1.1: TechNovas CFO argues that market saturation is the sole driver for globalization. Critically evaluate this claim using three additional factors through research. (10)1.2 Analyze the CIOs hybrid architecture proposal. What are the risks of relying on regional data centers, and how can TechNova mitigate them? (10)