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CASE FOR ANALYSIS TopDog Software104 At the age of 39, after working for nearly 15 years at a TopDog's software was particularly effective for use in de leading software company on the West Coast, Ari Weiner sign engineering organizations because it provided a highly and his soon-to-be-wife, Mary Carpenter, had cashed in efficient way to eliminate problems in new digital manu. their stock options, withdrawn all their savings, maxed out facturing processes, including product development, soft- their credit cards, and started their own business, naming ware engineering, hardware design, manufacturing, and it TopDog Software after their beloved Alaskan malamute installation. The software, which could be used as a stand- The two had developed a new software package for root alone product or easily integrated with other software cause analysis (RCA) applications that they were certain packages, dramatically expedited problem identification was far superior to anything on the market at that time, and corrective actions in the work of design engineering Curries C Meana Chapter 6: Designing Organizations for the International Environment 253 firms. The use of TopDog's RCA software would find an have pointed out that none of the managers has any inter- average of 30-to-50 root cause problems and provide 20-national experience, and the company would have to hire to-30 corrective actions that lowered defect rates by 50 someone with significant global exposure to even think percent, saving tens and sometimes hundreds of thousands about entering new markets. of dollars with each application. Although Mary tends to agree that TopDog for the time The timing proved to be right on target. RCA was just being should stay focused on building its business in the gerting hot, and TopDog was poised to take advantage of the United States, Ari has come to believe that global expansion trend as a niche player in a growing market. Weiner and Car of some type is a necessity. But if TopDog does eventually penter brought in two former colleagues as partners and were decide on global expansion, he wonders how on earth they soon able to catch the attention of a venture capitalist firm should proceed in a huge, complex world environment. Sam, to gain additional funding. Within a couple of years, TopDog the sales manager, is arguing that the company should set up had 28 employees and sales had reached ncarly S4 million. its own small foreign offices from scratch and staff them pri- Now, though, the partners are facing the company's marily with local people. Building a U.K. office and an Asian first major problem. TopDog's head of sales, Samantha office, she asserts, would give TopDog an ideal base for pen- Jenkins, has learned of a new company based in Norway etrating markets around the world. However, it would be that is beta testing a new RCA package that promises to quite expensive, not to mention the complexities of dealing outpace TopDog's and the Norway-based company, with language and cultural differences, legal and government FastData, has been talking up its global aspirations in the regulations, and other matters. Another option would be to press. "If we stay focused on the United States and they establish alliances or joint ventures with small European and start out as a global player, they'll kill us within months!" Asian companies that could benefit from adding RCA appli- Sam moaned. "We've got to come up with an international cations to their suite of products. The companies could share strategy to deal with this kind of competition." expenses in setting up foreign production facilities and a In a series of group meetings, off-site retreats, and global sales and distribution network. This would be a much one-on-one conversations, Weiner and Carpenter have less costly operation and would give TopDog the benefit of gathered opinions and ideas from their partners, em the expertise of the foreign partners. However, it might also ployees, advisors, and friends. Now they have to make a require lengthy negotiations and would certainly mean giving decision-should TopDog go global? And if so, what ap- up some control to the partner companies, proach would be most effective? There's a growing market One of TopDog's partners is urging still a third, even for RCA software overseas, and new companies such as lower-cost approach, that of licensing TopDog's software Fast Data will soon be cutting into TopDog's U.S. market to foreign distributors as a route to international expan- share as well. Samantha Jenkins isn't alone in her belief sion. By giving foreign software companies rights to pro- that TopDog has no choice but to enter new international duce, market, and distribute its RCA software, TopDog markets or get eaten alive. Others, however, are concerned could build brand identity and customer awareness while that TopDog isn't ready for that step. The company's re keeping a tight rein on expenses. Ari likes the low-cost ap- sources are already stretched to the limit, and some advi- proach, but he wonders if licensing would give TopDog sors have warned that rapid global expansion could spell enough participation and control to successfully develop disaster. TopDog isn't even well established in the United its international presence. As another day winds down, States, they argue, and expanding internationally could Weiner and Carpenter are no closer to a decision about strain the company's capabilities and resources. Others global expansion than they were when the sun came up