Graneer Systems Inc is an internationally known provider of water purifier and filter with large amount of market share and profitability, making us able to expand their market coverage to other countries and expand their business operation. Currently, our company is initiating its way towards various markets of developing countries to expand the business. This organizational mobilization aims to widen the market coverage of the company, and at the same time to increase our market shares.
The following countries are being studied by our company liaisons to determine the probability of the entry of the company: India, Indonesia, Argentina and Brazil. The main purpose of the operation of the business is to provide its market with safe and clean water to drink and for other consumption purposes. It is said that most of the countries has been having problem regarding the supply of quality and safe water. With this, the Graneer Systems Inc was formed to answer such kinds of problems by the market.
After taking into consideration all the other possible market, we are going to give more emphasis on the Indian market for it addresses more the problem regarding the quality supply of water and this market is more likely to respond to our entry as compared to other countries (waterpartnersinternational, 2007). This report intends to analyze the market entry of Graneer Systems Inc to Indian market as well as other economic and market factors that could affect the said plan of entry.
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This report is arranged according to successive sections that have something to do with the analysis of the probability of the entry of Graneer Systems Inc to Indian market and the possible problems that may arise after the implementation of the project started. A detailed SWOT [Strengths, Weaknesses, Opportunities and Threats] Analysis of the organization will also be provided by this report in order for us to be guided to the flow of the discussion and for us to determine the important factors that must be given more attention during and after the implementation of the project (Echaniz, 2001).
Analysis of Our Past and Present Conditions Our company was founded in 1980 by Eugene Graneer who produced its first product, a desalinator, which gains market acceptance into the Floridian market and quickly expands to neighboring municipalities, smaller businesses, hospitals and bottlers of water companies. In 1985, Graneer started to export products to Mexico and Belize and later to water bottlers in Germany. The rapid growth of the export sales of the company give birth to our International Division in 1990.
By the years 2000, our company experienced a profit of almost $400 million and already offering various product lines to offer to the market. Annual sales growth of the company increased to 12 percent for the past five years and currently employing over 4000 workers to participate into the operation of the organization. Export sales also increased to $140 million; $70 million of it comes from countries in Latin and South America, $30 million from Europe and $40 million in South Asia and Australia.
The international division of the company has sales offices, small assembly areas and distribution facilities in Frankfurt, Germany, Tokyo, Japan and Singapore (Kerin, 2007). In 1995, two models of water purifiers that was distributed into the markets of Poland, Hungary, Romania, the Czech Republic and Slovakia, were designed into the United States. Sales Engineers were able to developed two models of water filter due to the request of the consumers and distributors in 1994.
The market for clean water I the developing countries were huge, profitable and attractive in a socially responsible sense. But in the late 1999, developing countries started to feel not satisfied with water filters alone. With this, Graneer Systems Inc started to developed water purifiers and adding it to their product lines so as to answer the needs of its markets. After the development of the water purifier, engineers of Graneer named it as “Delight”. External Opportunities which we could exploit
The Indian market is about 40 million consumers belonging to middle- and upper-middle-class households just like in the US and European Union market. Indian consumers give more premiums to foreign brands and would be willing to pay higher price for such brands as long as it over-performed their local products. Indian government is giving more attention the problem regarding the supply of quality and safe water into Indian states. There are only 100 small, regional manufacturers of water purifiers competing into only one or two of India’s 25 states.
This only shoes that each one of the current water purifier producer in India has only small market share and weakly influences the entire market. This magnifies how easy to enter into the market of India. The average return on assets on India is about 18% as compared to the 11% of the US corporations. It is expected also in the coming years the booming of the Indian market. Investment and trade regulations in India in 2000 means that the business could be conducted much easier as compared before. External Threats that could impede success
Tax rate in India is relatively higher as compared to US. The existence of a large number of competitors as well as three other companies with a large market share in the Indian market. Power interruptions in India makes the consumers think twice to purchase mechanical devices for water purifications. Indian market would eventually require, based from the observations of Chatterjee, a number of models of the water purifier from the company. This would surely add up to the costs of entering into the market of Indians. Internal Strengths on which to capitalize
The company has been known in the field of producing water purifier for the past decades in US and Europe. The company has international offices in various strategic locations around the globe. Innovates the products based from the suggestions of their consumers and distributors. Has good customer relationship. Provide products with special features like a battery operated water purifier to answer the frequent power failure in India, inclusion of “bells” or “whistles” to tell cooks, maids and family members that the unit is indeed working properly.
Graneer has 4000 workers, 380 of which have technical backgrounds and responsibilities (Temple, 2005). Internal Weaknesses to overcome The company does not have initiative to conduct market studies regarding the acceptability of their products to the market. Since the company is operating internationally, it would be problematic to disseminate information and communicate with one another. Since the company will hire Indian workers, cultural problem could arise since western and eastern orientation in the work field are different from one another.
The company depends too much on their export group. Their local sales are relatively less as compared to their export sales. Graneer engineers lack initiative in improving their water purifiers. They always rely on the suggestions coming from the distributors and other market agents. They should be the first one to initiate improvements if there are any flaws or inadequacies in the product of the company (Pracownicza, 2007). Assumptions on which strategies are based It is assumed that the quality of the models of Graneer will surpass those water purifiers coming from the local Indian producers.
We also presume that the product will work perfectly under the Indian market, that there will be no mechanical failures or anything that is related to the performance of Delight. Another assumption would be, there are adequate numbers of distribution and communication facilities in the rural areas of India since a large part of the company’s target market would be coming from the latter. With regards to the labor costs of Indian worker, we are going to assume that there is no great difference between the labor costs of American workers as compared to Indian laborers.
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