Growth of any organization can only be realized if there are new opportunities that can be used for expansion. Businesses should consider venturing into foreign markets if the local market is saturated to give way for more opportunities. After an enterprise has expanded, its chances of achieving cost advantages and higher profits increase. Hence, a business stands a chance to enjoy economies of scale and customer base expansion. While Alteryx has managed to achieve a significant growth within the data analytics market, its presence has not yet been felt in North America. The company has a strong base within Australia only, and foreign expansion is necessary if the organization is to benefit from its historic growth. International trade, which is a significant revenue contributor for most firms in the world, is likely to increase the competitiveness and profitability of the enterprise. Nevertheless, it is imperative for Alteryx to consider the skyrocketing industrialization, communication, and transportation tools to decide on the direction to take.
Reports on market data indicate that India, which has for a long time been a hub for outsourced technology, is experiencing inadequacy of analytics talent as most reputable global enterprises are continually channeling data related tasks to the nation (Hogler, 2017). Hence, our organization’s expansion into the Indian market will be an opportunity to take advantage of the paradigm shift and emerge as a leader in the analytics industry. The explosion of data analytics needs will be essential for our expansion. Reports released by economic analysts in the U.S indicate that while there was a 30% increase in exports from the United States to all countries, there was a double increase of exports to India. Hence, India appears to be one the fastest growing market around the globe. This dynamic provides a perfect opportunity for the company to venture into foreign expansion.
There has been a boom in data analytics across the globe for the past years, with outstanding economies experiencing massive rewards. Nevertheless, India has been lagging in adopting the opportunity until recently. The past three years have been accompanied with a high demand for cloud-based and analytics solutions. The trend has set the nation on the path to catch up with other leading nations in the world. According to India’s market watch, the data analytics sector is currently valued at a whopping $1.5 billion, which makes it among the best analytics market in the world. It is expected that by 2024, the figure will have grown to $10 billion. The data analytics industry is at the brim of digital revolution, especially in the information era. Hence, most businesses have started to discoverthe importance of incorporating data and analytics into their enterprises to survive the wave of change in the global market. As such, it is anticipated that by 2018, half of the organizations in India will to fail deliver in the available traditional setup of analytics. It is evident that the data analytics sector in India will be the most relevant and this has been boosted the necessity for the business intelligence segment in India. The main beneficiaries of analytics will be the banking, telecommunication services and retail sector. Nevertheless, the small and medium sized businesses are unlikely to be at the phase of deploying analytics in their operations.
All along, Alteryx has been relying on financial aids to realize its domestic growth. The business has received funding from firms such as SAP Ventures, Toba Capital, and Iconiq Capital. The money has majorly been used for expansion in North America. However, the company has not ventured into the promising Indian market, and its absence from the market questions the company’s strategic model. Alteryx will consider Foreign Direct Investment (FDI) to strategically penetrate into the Indian market. FDI will be beneficial in taming price escalation as a result of transportation costs. Furthermore, custom duty fee would be reduced or nullified making it favorable for the business.
Most U.S companies, particularly those in the IT sector have been enticed by the demand and revenue opportunities in India. As a result, wages in India have grown at a tremendous rate in a short time. According to market analysts of India, the average income in a household would have tripled by the next 20 years and this will lead the nation to be one of the world’s largest consumer based economy. These trends are ideal for growth of Alteryx and may allow the form to dominate the market in India. Hence, India is a perfect place to expand the business.
If Alteryx does not explore the business opportunity in India, then it would have missed an opportunity that may not be available several years to come. India’s economy is fast growing and has a consumer class that is growing rapidly. In fact, economists point out that India will have the largest consumer market in future because its middle class accounts for approximately 290 million individuals, which is comparable to the European Union market. There is likely to be a positive deviation of the numbers if the trend is uninterrupted.
Deloitte’s report indicates that a specialist in IT expects a salary of $13,975. As such if 100 specialists are needed, then, the cost on labor will increase from $1,397,500 to $2,724,540 by the year 2027 (Markey & Monat, 2017). Consequently, the net revenue will grow from approximately $ 180 million to $502. Table 1 below shows costs and revenue for the expansion.
Figure 1.cost and revenue for the expansion
Consolidated Financial Impact
Using information from previous performances, the consolidated financial report will be as indicated in Table 2 below.
Figure 2. Consolidated financial report
External risks are the circumstances in an economy that cannot be controlled by a company. The company has to consider the risks of venturing into the Indian market to set up strategic goals. Businesses operating at international levels are to prone specific financial and politics-related risks that may domestic companies may not experience. Fluctuations in the foreign exchange market, unfavorable political environment, tariffs and other unpredictable events are some of the challenges that a business faces upon venturing into the global market. external risks can be caused by economic, natural, or political factors. Risks due to economic factors can be caused by events such as variation in the market. On the other hand, natural risk factors may be caused by naturally occurring events, such as earthquakes. Finally, changes in the politics influence political risks.
Managing External Risks
Alternate Ffinancial: (+-20%). The uncontrolled factors in the market could lead the company’s financial statements to be affected by either a decrease or increase of 20%. This Alternate Financial model assumes that in the worst scenario, the company will be affected by a decrease of 20%; which is within the acceptable range. Hence, the company will be in position to pay off any debts while maintaining the stock price. If there is a 20% increase in Alteryx’s financial statements, the company will be able to pay off its debts sooner which increase the chances of stock appreciation.
Besides the external risks, a business must identifying internal risks. The main internal risks include human, technological, and physical factors. Some of the possible risks that can arise from human factors include strikes, untrustworthy employees, failure on the part of the management, and ineffective suppliers. On the other hand, the technological factors may encompass variation in delivery and distribution. Finally, physical factors can arise when the company’s assets are damaged.
,Alteryx will require $10 million with an extra plan of $6 million, which shall be spread in the second and third years, to carter for the expansion and startup expenses. The loan rate for the given amount is 6.5% with the higher limit being 9%. If there are no incurred penalties, then the company shall commit itself to settle the loan in 20 years with an option of accelerating the repayment to 15 years after the revenues have stabilized. Using 6.5% as the preferred interest rate, the enterprise will be capable of settling the loan while anticipated $1.3 million savings if the repayment is accelerated to 15 years as show in Table 3.
Tracking the Company’s Record
Alteryx has grown to be the leading self-service data analytics with a profound vision of developing software that will benefit most organizations. The enterprise was founded by three parties and has since developed into a reputable organization because of their excellent leadership skills. the expansion provides an opportunity for attractive revenue and profit, and the company is well positioned to handle any expansion debt. Consequently, the enterprise boosts of a minimal debt to equity margin, which makes it attractive to investors. Additionally, the company’s current assets indicate that it can survive an economic recession, which most corporations face once in a while. The company’s strategies show that it has been pursuing market growth with a high success rate and there is a low possibility of failure in this case.
Alteryx has the potential to seize the Indian market opportunity by implementing its vision for expansion. The company can be a leading organization in the country given that it has demonstrated outstanding skills in the local market. The data analytics company can stretch past its goals to become an established business in India. Thus, this proposal for funding is the only sure that company can convert the opportunity into a profit. In the long term, the loan requested for the proposal shall be settled while providing the investor with an opportunity to enjoy an increasing stalk valuation.
Hogler, R. L. (2017). Business Intelligence: Readings in the labor-managementissues. University Park: Dept. of Labor Studies and Industrial Relations, PennsylvaniaState University.
Markey, R., &Monat, J. (2017). Alteryx SWOT Analysis.Aldershot, Hants, England: Avebury.
Putzier, J. (2014). Alteryx: ). Investment Opportunities of Big Data Technology in India).Upper Saddle River, NJ: FT Prentice Hall.