A strategy for expanding Edge Research’s services internationally:
Developing a strategic alliance with a developing country during a global financial meltdown may appear to be a crazy idea at first glance. However, by partnering with a primary research firm in Turkey, Edge Research could boost growth and insulate itself from the poor economy in 2009. This proposal will explain the growth opportunities in Turkey, the competitive advantages that can be gained through an alliance and the structure of a global partnership.
Edge Research is a full-service marketing research firm servicing clients in a range of industries including telecommunications, tourism, IT, and automotive. Many of Edge’s clients are multi-national companies requiring research projects to be conducted all over the world. Currently, Edge has the ability to manage most domestic primary research and analysis needs, but international primary research must be done on location and in language requiring outside vendor services. Currently, Edge has two partnerships with sample providers that are able to handle international projects in Europe and Latin America. As clients expand to developing markets, it is in Edge’s best interest to develop new alliances with service providers in those markets. Turkey is one such market that Edge’s clients are becoming increasingly interested in and by developing a strategic alliance with a primary research partner in Turkey, Edge could cultivate competitive advantages to other domestic marketing research firms.
Before investing time in developing a partnership with a Turkish research firm, the country’s economic atmosphere must be examined to make sure the partnership will be able to weather the storm. In light of the global financial crisis expected to last through 2009, it is important to look at the foreign government’s policies and abilities to stimulate growth. The Economist Intelligence Unit’s (EIU) latest report on Turkey (Jan. 2009) states that Turkey’s government remains broadly in favor of reforms needed to control the public finances, boost competitiveness and attract foreign investment. This is not to say that Turkey is immune from the global financial crisis however as 2009 indicators show that unemployment is rising, inflation is increasing, and economic activity is declining.
Q&A Market Research
Q&A Market Research is an ideal candidate for Edge Research to form a strategic alliance with in Turkey. Based in Istanbul, Q&A is runs an online panel and a number of focus group facilities around Turkey. A unique characteristic that sets it apart from the small handful of competitors has additional offices in the Middle East and North African markets as well. For this strategic alliance, Edge will be offering its expertise in research methodologies, online capabilities and proprietary analytics. In return, Q&A will allow us volume discounts on panel participants, access to focus group facilities and rights to use their consumer knowledge database. Both partners to this deal will provide referrals from current clients to use each other’s services when applicable.
Growth Opportunities
Entering a strategic alliance with Q&A Market Research will allow Edge to provide current clients with new market intelligence and access to one of the fastest growing research markets in Europe with net growth of 30.2% 2005-2006. Creating a “virtual mass” through this partnership, Edge and its Turkish ally can build a portfolio of licensing agreements and contract partnerships to sustain specific markets through organic growth. Co-development and co-promotion strategies will help strengthen R&D and positioning in new or diminishing markets.
Edge Research has developed proprietary solutions for conducting consumer research in developing economies through its telecommunication studies for Nextel International in Latin America and has an expertise in the travel and tourism industry. In addition to helping Nextel International evaluate possibilities for expansion, the Edge/Q&A partnership will provide new research services Q&A’s current client, Turkish telecom Turkcell, the leading cell phone operator in Turkey with more than 36 million customers.
Tourism is one of the most important sectors of the Turkish economy. According to balance-of-payments data from the Central Bank of Turkey, earnings from foreign visitors and Turkish citizens living abroad rose sharply from US$7.4bn in 2001 to US$18.5bn, or 2.8% of revised GDP, in 2007. As the economy and tourism goes into a slump during 2009, marketing research will be implemented to improve tourism in Turkey.
Competitive Advantages
A strategic alliance with Q&A in Turkey would give Edge the competitive advantage of combining services and enhancing their presence in the full-service marketing research market. Having a partner in Turkey gives Edge access to key insights into the Turkish marketplace that it would not be able to afford without a foreign relationship. There are three product solutions that Edge can develop by entering a strategic alliance: a reliable European focus group network, an on-demand source for online sample in Turkey, and access to new clients.
Recruiting for good, international focus groups is a major challenge for US firms trying to conduct international research. A handful of domestic marketing research firms are able to provide international online sample for quantitative surveys and only two have consumer sample in Turkey. The alliance would develop synergies between Edge and the Turkish partner allowing their clients access to the services of both companies as well as referrals. As mentioned above in the growth section, Turkey has many major companies that operate in industries that Edge has expertise in.
Already Edge’s partnerships allow it to be extremely competitive on cost because of volume discounts. Developing an international collaboration with Q&A will allow it to provide competitive pricing that it can pass on to clients. Having a consistent partner for survey research in Turkey will also reduce turnaround times on projects because it eliminates the need to develop RFPs.
Structure
To get the most out of the global strategic alliance, Edge Research will specifically define the structure of the global partnership. It is important to communicate the benefits of working together to a potential strategic alliance partner and spell out what’s in it for them. Q&A Market Research will need to be independent of Edge, but still share the same dependencies on joint projects’ success.
A good partner should help the company achieve its goals, share the company’s vision for the purpose of the alliance, and be unlikely to exploit the alliance for its know-how while giving little in return. To keep both companies committed to the arrangement, Edge will develop a new team to manage all projects involving Q&A. This team will be responsible for creating a knowledge management resource that can be maximized by other parts of the company. This group will also routinely estimate revenues for the group to justify the partnership to both sides of the alliance and promote development.
Revenues from projects must be beneficial for both partners of the alliance, but Edge will not invest in nor share equity with the partner. As mentioned earlier, Turkey is still a developing economy experiencing inflation and other economic instability caused by the global financial crisis. It is in Edge’s best interest to minimize exchange rate risk by keeping equity separate. The strategic alliance allows both companies to be fiscally flexible for the long term while benefiting from short-term and long-term growth provided by the partnership. The alliance will be evaluated yearly to reestablish its profitability and goals.
In conclusion, entering a strategic alliance with Q&A Market Research will allow Edge Research to grow its international presence without sacrificing significant equity. Turkey is an excellent country to be venturing into marketing research at this time, but it’s just the beginning as a strong presence in Turkey will translate into easy access to Middle Eastern and North African markets in the future.
References
Associated Press. “Turkcell wins 3G license in Turkey.” International Business Times. http://www.ibtimes.com/articles/20081128/turkcell-wins-3g-license-in-turkey.htm.
DataMonitor. “The Pharmaceutical Mergers and Acquisitions Outlook 2001.” Business Insights Ltd. URL: http://www.globalbusinessinsights.com/rbi/content/rbhc0064m.pdf
Dyer, Jeffrey, Kale, Prashant and Singh, Harbir. “How To Make Strategic Alliances Work.” MIT Sloan Management Review. July 15, 2001. http://sloanreview.mit.edu/the-magazine/articles/2001/summer/4243/how-to-make-strategic-alliances-work/.
Economist. “Travel and tourism profile.” Economist Intelligence Unit. Sept. 5th 2008.
Economist. “Turkey, County Report, January 2009.” Economist Intelligences Unit.
