Fairchild Water Technologies Case Solution
Attractiveness of Indian Market for Home Water Purifiers
In analyzing the potential of Indian Market for the home water purifiers some facts are identified. The country currently lacks the pure drinking water which is creating water borne diseases in the people of India which is paving the direction for the companies like Fair child home water purifiers to boom in India. According to the recent stats the home water purifiers industry in India is valued at approximately INR 34 billion which is quite a significant number. Moreover, it is also forecasted that the industry would further grow at the annual growth rate of 22% until 2019 which could reach another big height for the industry as a whole. Moreover, the Indian economy is open to foreign investors who are beneficial for the company.
The key reason behind this positive future outlook lies in the economic well-being of the people living in India which give the increased disposable income for the people who could result in the increased spending on the taking of the pure water also because of the health consciousness and the growing awareness among the people. Moreover, India is the developing country which can create huge advantage for the Fairchild Water Technologies in the sense that whatever it is going to introduced could be easily and rapidly expanded also because of the fact that currently the level of competition in the industry is very low because of no dominant competitors present which could help the company in gaining huge market share.
Alternatives for Fairchild regarding its entry in India
- Do not Enter in India
- Enter in Indian Market under the Licensing Agreement
- Enter in Indian Market under Joint Venture Arrangement using Price Skimming Approach.
- Enter in Indian Market under Joint Venture Arrangement using Penetration Pricing Approach.
In order to recommend one alternative for the company, each alternative should be studied in details with its qualitative as well as quantitative aspects.
Alternative 1: Recommendation for not entering in the Indian Market.
The decision to enter in India has already been taken therefore, this recommendation is only taken as the null hypothesis which could help in the evaluation of the remaining alternatives.
Qualitative Analysis
Pros
The first and the foremost benefit of this strategy is the company would be safe from the additional risk associated with the entrance in the foreign market especially in the developing country. Moreover, by looking at the current resources of the company, it can be seen that the company has the available resources for the expansion in the home country therefore,moving in India was not at all required if we consider this alternative because the company can be able to gain sufficiently without taking any additional risk.
Cons
With the saying, “ NO GAIN, NO RISK”, if the company does not take risk of entering in the global market, then there would significant loss for the company in terms of earning return for the company. By opting this alternative, the company could lose significantly its expected brand awareness which is the prime requirement for every business for its long term growth. Moreover, as the company prefers to move in the developing country where the revenue generation is quite fast so by not entering in India,it could lose significant financial gains, expanded market base and the increased international competitiveness which are some of the key points that are focused by the stakeholders of the company.Furthermore, with this expansion, the company could have the opportunity to gain significant market share for its products in the environment where there are no dominant competitors for the similar products................
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