OPERATION SERVICE MANAGEMENT

Operation service management



Operation Service Management

Industry experts generally regard the Midwich Water product line as superior in terms of performance and quality. For the past five years your company has enjoyed an average annual sales revenue growth of 12 percent due to its quality and market reputation. The product line, consisting of, desalinators, particle filters, ozonators, ion exchange resins and purifiers have awarded you with record sales in 1996 of almost $400 million. Your consumer base is diversified, capturing residential, hospitals, municipalities and various businesses including water-bottling companies. With over 4,000 employees, including 380 dedicated to technical applications, international sales offices, small assembly areas and distribution facilities in Germany, Japan and Singapore, you are prepared to expand its international market presence.

Currently, your company successfully sells its two versions of home water filters to Germany, Poland, Hungary, Romania, Czech Republic and Slovakia, which significantly contributed to the 1996 international sales of almost $140 million. However, other market opportunity exists with other less developed countries (LDCs). Many LDCs are plagued with contaminated water that most home water filters cannot properly decontaminate. To meet the needs of LDCs your research and development group engineered, Midwich Water Inc., a home water purifier.

Although many LDCs exist, UK is the focal point for our recommended marketing strategies due to your interest in this country and its liberal foreign investment policies. The following SWOT analysis supports latter detailed marketing strategies for Midwich Water Inc. and future growth opportunities in UK.

External Opportunities Midwich Water Could Exploit

The UK market strongly believes in the need for improved water quality that is supported by ongoing folklore, newspapers, consumer activists and government officials.

Water quality greatly diminished during monsoons.

Treated/Untreated water contaminated by:

Numerous leaks in systems

Unauthorized withdrawals from systems

Government concerned with water quality on national, state and local levels and responsible for:

Measuring quality of water at thousands of locations nationwide.

Notifying consumers if water is not safe.

40 million households boil, boil and filter, only filter or purify water.

4 million households are mid to high income and highly educated and do not treat water due to lack of confidence in available products.

80 percent of UK's population lives in rural areas with lower water quality than metropolitan areas served by current competition.

Six known competitors, marketing to large metropolitan areas.

Eureka Forbes product line cannot eliminate inorganic solutes.

Singer UK LTD product line must be disposed of after 70,000 liters of water is purified.

Other competitors' similar deficiencies in products.

UK market willing to purchase foreign brands at higher costs if product outperforms domestic product.

UK provides tax concessions for foreign investment

Six free trade zones

Liberal depreciation allowances

Generous deduction policies

External Threats That May Impede Success

Investing in foreign countries requires diligent research and analysis of all risks, including established competition, government and legislation.

Foreign investment lengthy process in UK

Apply for market entry to Foreign Investment Promotion Board

Assesses relevant technology and UK's need for it.

Approved proposal reviewed by Reserve Bank of UK, Ministry of Finance:

Approves any royalties, fees, and remittances of dividends or interest, repatriation of profits and invested capital and repayment of foreign ...