By Joe Vanderstelt, Brendan Prost,
Alex Tallman, and Danielle
Winterberger
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New Company – expand or no?
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Currently operating within the United States

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Currently possess a strong client base and
connections within the United States
Poaching and security
Choose two new markets for Sanctuary to expand
into, expanding domestically is an optional as
well?
Choice one: The United States
Choice two: The United States
Our rationale…
Attractive Attributes of Germany:


World’s second largest market for software and
IT services (U.S. having the largest)
Highly educated workforce
However, we decided against expanding to Germany
because…
Source:
Case Study Prompt
General Observations:


Labor unions have a strong foothold in Germany
Germany is a bad environment for restrictive
covenants, putting our customer base and
possibly confidential information at risk.
Can we afford the risks and limitations that come
with hiring German labor?
Source:
"Economy Rankings." Doing Business. International Finance Corporation, 2010. Web. 15 Nov 2010.
<http://doingbusiness.org/rankings>.
Special Research Observations:
Ease of Doing Business:

Germany: 2010- 21 2011-22

United States: 2010- 5 2011- 5
Starting a New Business:

Germany: 2010- 84 2011-88

United States: 2010- 9 2011- 9
Germany is becoming progressively less conductive for market
growth while the U.S. is maintaining its strong global
positioning.
Are we willing to accept these harsh conditions?
Source:
Reynolds, Morgan. "Labor Unions." The Concise Encyclopedia of Economics. Library of Economics and Liberty, 2008.
Web. 15 Nov 2010. <http://www.econlib.org/library/Enc/LaborUnions.html>
Why would the United Kingdom be a potential
option?
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More college graduates than Germany
Averages wages were also lower than United
States and Germany
However, we did not choose to expand into the
United Kingdom because…
Source:
Case Study Prompt


United Kingdom market for software: around
$18 billion – 5.5% annual growth
United States market for software: nearly $90
billlion – 5.3% annual growth
Is an extra 0.2% annual growth rate worth
sacrificing nearly $72 billion dollars in the
market?
Source:
Case Study Prompt



In 2009, 66.1% of online fraud perpetrators were found to be
operating in the United States of America, while only 10.5%
are operating in the United Kingdom
In 2009, 88.4% of internet fraud complaints within the
United States are the result of purchases that a person had
not agreed to.
The PCI (payment card industry) Data Security Standard
required all companies that allowed credit card purchases to
implement multiple systems in order to secure cardholder
data.
Would it be reasonable to leave such a demanding market?
Sources:
“Internet Fraud, Scam and Crime Statistics – 2009.” Internet Crime Complaint Center. Federal Bureau of Investigation, 2009. Web. 08 November 2010. <
http://www.consumerfraudreporting.org/internet_scam_statistics.htm>
“Consumer Fraud in the United States: The FTC Surveys.” Keith B. Anderson, Bureau of Economics. Federal Trade Commission: February 25, 2009. Web. 08
November 2010. <www.ftc.gov/bcp/workshops/fraudforum/docs/b.Day1Panel2.ppt>
Case Study Prompt
Why is China an attractive market?
Low Labor Costs
 .64 vs 21.97
High annual GDP growth
 10.2% vs 3.2%
However, we did not choose China because…
Source:
Case Study Prompt
Why not China?
General Observations:
Low amount of consumer technology
 Internet users per 1,000:


85.1 vs 630
Personal Computers per 1,000

40.9 vs 762.2
Source:
Case Study Prompt
Research Observations:



Lower “E-readiness” Rankings. 56/70 (4.3) vs.
5/70 (8.6)
Lower “Ease of Doing Business” Rankings. 79/183
vs. 5/183
Weakness of Chinese banks considering the
dynamism of credit and the uncertainties over the
amount of non-performing loans.
Sources:
Doing Business Home - World Bank Group. Web. 12 Nov. 2010.<http://www.doingbusiness.org/>.
"Country Insights | GlobalEDGE." GlobalEDGE - Your Source for Global Business
Knowledge. Web. 12 Nov. 2010.<http://globaledge.msu.edu/countries/>.
India:

Gross national income per capita: 2,930
United States:
 Gross national income per capita: 48,430
Can they afford us…?
Source:
Case Study Prompt
India:

Poaching is very hard to prevent or maintain.

Investor protection: 44/183

Enforcing contracts: 182/183
United States:

Poaching is much more severely approached.

Investor protection: 5/183

Enforcing contracts: 8/183

Do we want to risk losing our highly skilled talent?
Sources:
Reynolds, Morgan. "Labor Unions." The Concise Encyclopedia of Economics. Library of Economics and Liberty,
2008. Web. 15 Nov 2010. <http://www.econlib.org/library/Enc/LaborUnions.html>
Case Study Prompt
Ease of doing business:

United States: 5/183

India: 134/183
Starting a business:

United States: 9/183

India: 165/183
Global competitiveness:

United States: 2/133

India: 49/133
Source:
Reynolds, Morgan. "Labor Unions." The Concise Encyclopedia of Economics. Library of Economics and Liberty, 2008. Web. 15 Nov
2010. <http://www.econlib.org/library/Enc/LaborUnions.html>
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Creating Efficiency – Dr. Robert Wiseman
“What seemed to us to be a simple sales process
was actually long, complicated, and very
dependent on relationships with very senior level
people at the banks” – Smalley
We possess a current brand name that we’re trying
to grow, and starting from scratch again would not
be to our current advantage
In the future, an international expansion could be
to our advantage