Sanctuary soft is security software that a company registered as Sanctuary Soft Inc. The company is currently carrying out its day to day business operations in the United States, specifically in San Francisco, where it has been founded. The original idea to establish the company belonged to Smalley, who got the idea while working with a local commercial bank named Woodson. Smalley then realized that like any other banks in the region, Woodson had a very poor security system and as a result, most of the company’s information including the customers’ personal data was vulnerable to exposure to third parties. A situation that could even land such crucial information was in scrupulous hands. Smalley shared the idea of starting a company that could provide a secure way of storing organization’s information. The friend and classmate at Berkeley, Aguilar, supported the idea and as a result of efforts of two colleagues Sanctuary Soft Inc. was born.
The events that unfolded later on favored the company. For example, the initial two partners of the business did not have enough capital to establish the company. The meager savings could not support as well as take care of all the logistics involved in the process of registering a new company. Fortunately, they met Valentine who invested over two million dollars which was equivalent to 40% of all investments in the company. In addition, Smalley also got a helpful advice from the boss at Woodson, Mr. Grieves, who told her that if she really wanted to execute her own idea of making and selling security software, she should better resign her current position and pursue her interests as a business lady. Smalley took the decision with all the seriousness that it required. Moreover, other things occurred in the favor of her initiative, for instance, the request of the government to set up a Digital Encryption Standard (DES), which Sanctuary Soft participated in. The company had also succeeded in employing competent staff though poaching from other organizations and stakeholders who made the company win the trust of clients and, hence, penetrate rather congested and competitive market.
The trouble with directors arises from the pressure impacted by customers who are demanding that Sanctuary Soft Inc. should expand its markets outside of San Francisco and other states and countries. This is a position the directors of the company have not anticipated and, therefore, have not prepared for it in terms of infrastructure or even psychologically, financially and legally.
As a result, this calls for a lot of consultations and brain storming from the directors. On behalf of the company, they even go as far as outsourcing another company to research which actions must be taken in case something occurs or if the company decides to expand particular markets that it has an aim to occupy as well as consider their chances of survival in such markets. Emerging issues include specific market potentials in those markets, legal issues, availabilities and costs of labor, certain ways of how to maintain the currently existing market, and how to handle employees poaching among others.
First, it is important to make it clear that Sanctuary Soft Inc. has no other choice but to go international. The reason for this is that most of their clients are growing and they are creating their branches in various markets across the globe. They are, therefore, more willing to work with a service provider that can be available to maintain their systems in the market that they have taken over. If Sanctuary Soft Inc. is not able to meet this standard, then it risks losing most of its customers as they are likely to address other companies which are able to provide their services at an international level. This is because the nature of business that Sanctuary Soft Inc. deals with entails that the company has to grow at the same pace that clients’ demands do, otherwise, it will not be able to satisfy the needs of the growing client base. Second, the directors of Sanctuary Soft Inc. need to be aware that they are lucky to be able to expand new markets nad keeping the same clients base. Thus, this reduces other costs including advertisement, and networking expenditures among others. The company locates new centers in those places that are close to their clients. Therefore, they can even rely on the market research done by their clients in the new areas because their business is not competitive. They do not need to take more time moving to international markets because a business opportunity will not exist in the same place for a long time. Someone else might pay attention to this opportunity and accept it leaving others procrastinating on the decision on whether to move or not. What they should do is to inform the managers they want to reach international markets, improve them and also set the values due to which the company will be more successful in the local market. In some cases, business environments are not similar. The American market might not be the same as the Chinese or Germany one. To avoid a situation of culture shock, one of the directors can explore the new markets, set up a center there and then work with trained managers in the foreign market. As a result, the working conditions will be more comfortable and they will have an opportunity to work independently. Furthermore, going international can make the company benefit from other incentives created by the government in those particular areas as taxation reduction, by investing in a specific industry, cheap labor, availability of raw material and infrastructure. The company can then take advantage to maximize profits. Furthermore, going international also makes directors and managers understand traditions and cultures of the business environments of markets as it is an international phenomenon. Finally, it will be a great opportunity to avoid the risks. It means that in case one of their markets becomes less productive as a result of growing completion, advancement in technology or high cost of doing business, Sanctuary Soft Inc. will still survive as the business and will be successful in other viable markets.
The company can implement proper human resource strategies by analyzing the latest labor market trends in the country they chose to set a center. The company needs to know how easy it is to find qualified employees in the target market. Employees hired from a local market are cheaper if compared to an imported labor force. However, it might be difficult to find already trained or qualified employees in markets that are still green. In such case, the company could consider transferring their own staff to such areas or recruiting them from higher learning institutions rather than retraining them to meet their demands. Internally trained employees are usually more loyal to the company if compared to readymade staff that comes from other companies or markets. In addition, they need to study the labor policies in targeted countries to reduce legal fees spent paying fines in industrial courts.
All these issues need to be put into consideration before implementing a hiring policy to avoid breaking labor laws in recipient countries and also to come up with a highly motivated team of employees. From a liberalist’s perspective, the company should not be afraid of poaching as long as the staff from other companies is well qualified and competent enough to perform their duties. Employees will always look for greener pastures and even if they are restricted by law, better opportunities and more fulfilling jobs will always be more attractive to them. Poaching, therefore, does not need to be discouraged as it is part of the competition in the market.
As an expert, I would recommend that Sanctuary Soft Inc. first explores the Chinese market because of the following reasons.
First, incentives provided by the government of China in China’s Special Economic Zones (SEZs) are very attractive to relatively young and growing companies, for instance, Sanctuary Soft Inc. The economic zones reduce amount of tax paid by the company and, therefore, the latter increases the profit margin for the company.
Second, the analysis carried out in various countries shows that China has the cheapest labor force. These also are other expenses that have been reduced due to which company’s profits have increased.
Moreover, the Chinese market is considered to be green. Therefore, Sanctuary Soft can capitalize on the monopoly and take a leadership position in the market. This can even lead to domination and, hence, customer’s loyalty.
The analysis also reported that China’s economy has grown by 12%. This implies that local companies in China are expanding its size and wealth. This, therefore, creates a need now and in the future for secure software which not only protects the current market, but also the future one. The benefits from reduced taxes make the market even more attractive. More resources will be needed on the market.
The ease of enforcing restrictive covenants in Chinese market brings a number of benefits as well. The company could take advantage of these agreements and bar rival companies that would join the market later from poaching their experienced staff. This would enable the company stay at the top of the ratings for some time even after rival companies enter the market.
In conclusion, Sanctuary Soft Inc. needs to reach international level cautiously making sure that it does not lose contact with the home market. The company could even make its international investment in China, but with an aim of penetrating fully the American, German and Asian market. To achieve this successfully the company needs to have an ambitious vision accompanied with a clear and practical plan of achieving of the highest business results. In addition, the company should ensure that while pursuing its expansion goals, it does not compromise on quality and customer’s satisfaction. It should also use more resources during the research to come up with the best and latest security programs that match the current technological advancement in the market.