International Business Strategy Case Study

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| |Course Assignment: Case Study – Elixir Technology – Entry into the Middle East {Case: Ivey 904A12} | | | |Report terms of reference | |Consider the firm’s position in May 2003. It has had some success expanding into other markets and is now considering the Middle East. | |Before it proceeds further, you need to consider the following: | |Why is Elixir interested in expanding internationally? | |What is/are Elixir’s source(s) of competitive advantage, will these be transferable to the Middle East? Can you foresee any significant | |competitive threats if the firm expands into the Middle East? | |Assess the cultural distance between the Middle East and Elixir’s home market. Use your own understanding of the region and any reasonable| |assumptions necessary to supplement case material; | |Should Elixir enter the Middle East market? If so, how should they enter the market? Provide a complete evaluation of opportunities. | Elixir Technology was founded in 1993 in Singapore, an Asian leader in technology development, has successfully led a business in the country starting with offering training and consulting services to produce by 1999 the Elixir Report (ER), a software for report generation developed entirely in JAVA, targeting both developers and end users and suits both large and small operations, advanced with internationalization support for localized multilingual reporting platform independence, which allowed it to run on virtually any operating system and had been enhanced to support bi-directional text handling, a requirement for Arabic characters.

In May 2003, ET had successfully sold this software to corporate clients in Singapore, China, and Japan, following a very adaptive marketing strategy in each market. For that the managing director of ET finds the necessity to expand internationally, moreover the following reasons explain why ET wants to expand internationally:

1. To find new markets, and especially in the Middle East, where some reports had shown that there were an increased accounts of Asian business in the region, suggesting a window of opportunity. 2. In 2001 after two years of research and development, elixir was ready to break into the world’s enterprise software market. 3. R&D are usually a heavy cost on the company and Singapore is a small market, so as more clients buy the software the average cost per customer will decrease and realize economies of scale. 4. The development of world-class product and the flexible partnership platform opened up the realm of possibility for foreign markets. 5. ET’s MD decided to focus on Asia in the near term, which will be the best choice to yield results.

“A company can increase its growth rate by taking goods or services developed at home and selling them internationally.”[1]

On the other hand, Elixir’s core competencies are the bedrock of its competitive advantages by transferring the skills and products derived from its core competencies to foreign markets where indigenous competitors lack those skills. The Technological know-how enabled Elixir to build a better product. However, flexible and scalable product features are the primary strengths of Elixir, which...
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