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Strengths − Industry expert consider superior products in term of performance and quality. − Range of related product. − Own Western brand name − Advantage in water purifier technology − Distribution facilities in Asia countries like Japan, Indonesia and Singapore Opportunities − Customer’s needs on high quality water − Large customer base in middle and upper middle income households − Customers prefer foreign brands − Does not have a standard measure on water purifier products. − No competitor has a national presence. − Market is in its early growth stages. − Low labor costs, packing costs, administration costs. Weakness − No business experience in India − Higher prices than other competitors − Many competitors who either have strength in brand awareness or distribution network Threats − Corporate tax rates in India are somewhat higher than in US. − Cumbersome and time consuming business approval process. − The trademarks legal protection is fragile. Strengths Fairchild Water Technologies Inc. is highly regarded by industry experts on product quality and good performance. Starting from a desalinator used by mobile home parks in Florida, the company expanded its product line to particle filters, ozonators, ion exchange resins and purifiers. The main office in the United States is a hot spot for new technologies. Fairchild Water Technologies Inc. also has technical advantages they gained through learning economies by conducting business in other countries. The knowledge gained via international ventures creates an advantage for Fairchild as the company moves towards competing with Indian companies. Companies in India are not as focused on technology as to the extent that US companies are. The international division of Fairchild Inc. has distribution facilities in Japan, Singapore and Indonesia that can help to store products, raw materials, machines or send laborers to India. The greatest advantage Fairchild Inc. possesses is its western brand name. Indian customers prefer products that are imported from or made by foreign companies. They believe the foreign brand names guarantee higher quality products. Weakness Fairchild Inc. has not conducted business in India before and has little practical knowledge about Indian business practices, customer values and preferred marketing approaches. The company needs to spend more time and costs to capture customer needs, customers’ attention and build its own distribution system. The companies that are active in the water purifier market have more experience with Indian operations and have developed successful distribution network. Fairchild can create better products than its rivals but the company cannot reach customers without a distribution network. The construction of a distribution network is an essential need, it is a long term process with a high amount of cost. Although Fairchild has received praise from industry experts, Fairchild’s products often have higher prices than its US competitors. When participating in the Indian market Fairchild’s products price will cause a competitive disadvantage for the company if the company decides to keep its high pricing. Opportunities Although there are many difficulties in understanding the market there are still growth opportunities for Fairchild to exploit. First the main need of Indian customers is the quality of drinking water. Fairchild Inc. can certainly take advantage of this opportunity by fulfilling this need. Fairchild has advance technology that can aid Indian consumers. Fairchild is also able to target a large market of potential customers that are apart of the high income group, have better education and like foreign brands. These customers lead a more conscious healthy life style and are willing to pay a higher price for products that can outperform India’s competing products. The market is currently in its early growth and has yet to develop a standard measure on water purifier products. This means that Fairchild can come up with a high advanced product and implement its world - class marketing approaches to set a new standard for the industry. There is high competition in the market but no company dominates the entire water purifier market. Low production costs and low labor costs will aid Fairchild Inc. in re-considering price reduction and increasing its competitiveness. Threats The following are some challenges Fairchild Inc. needs to consider when entering and operating in the Indian market. First of all, the process of being accepted and allowed for foreign investment in India usually takes at least six months. The process includes applications to the Foreign Investment Promotion Board, Secretariat for Industrial Approvals, Ministry of Industries. This requirement is time-consuming and the results may be unexpected. If Fairchild Inc. were rejected, the company could potentially acquire a huge loss. Second, local tax increase could be another great disadvantage to be considered by the company. Foreign companies are taxed on income arising from operations in India. Thus, the company has to pay tax for the United States and India respectively. In addition, the company needs to consider the legal matters because the appeal process in Indian can extend to another generation. Table B in the appendix shows each company’s product strengths and weaknesses. The positioning map provided below demonstrates the relative position of each product as well as the Delight product provided by Fairchild Water Technology Inc.
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