Case Brief: Mercan Systems,

Background and Problem commentary Mer wad Systems, Inc. founded in 1980 their first product cosmos a desalinator which was used to remove salts from brackish well irrigate supplied it to mobile radix park residents in Florida. The product was truly successful in the merchandiseplace place and it quickly expanded to nearby hospitals and bottlers of water for sale to consumer. By 2000, they made vast gain in their product by including section filters, ozonators, ion exchange resins, and purifiers. It had kept its price high than its competitors.They launched a new product and precious to formulate an entry system for the food market entry of Delight water purifier in India. Market and Industry Analysis at that place were slightly 44 meg households who took precautions and every last(predicate) the safety measures for their family. Ab turn up 50% of the take market used traditional simmering water method, 20% used standard candle filters and an early(a) 20% used wa ter purifiers. The major competitor for Mercan was Eureka Forbes who principally had two products namely Aqua arrest and Pure sip. The unit prices for Aqua oppose and pure sip were approx. Rs. 5 cholecalciferol and Rs. 2000.Apart from this there were other companies like Ion Exchange, Singer, and Delta Brand. On more thrifty observation Chatterjee found out that utmost gross gross revenue were from urban areas where the existing manufacturers were stretching only 10-15% of the entire Indian population. military rank of Alternative course of Action 1. level Acquisition/Joint Venture looking for at the estimated gross sales figure from prove 3 we find that the sales were approximately 430000 units. Analyzing it further we see that in upshot we adopt the skimming price outline and sell products by dint of monger alley we can estimate a sales of 279. trillion INR in comparison to 129 million INR in font Penetration outline. We pick up the same thing for Direct Sale s we can see that in case of skimming strategy the estimated sales were 215 million INR and in case of penetration strategy it was 86 million INR. (Exhibit 1 for the analysis). The pros and cons for adopting the strategy allow be Pros There is a huge opportunity to gain market share with new technology. Cons Initial enthronement is Rs. 30 gazillion is pretty high. merely Joint Ventures may turn out to be complicated as it go forth involve people with different brain and working style. 2. LicenseeConsidering the total cost incurred for licensee 35000 USD (Exhibit 2) and estimated sales contribution as 129 gazillion INR (Exhibit 3) Pros It has minimum cost and is of less risk. It can meet royalty from licensee. National staff can be hired with minimum pay Cons No control over licensees operation Conclusion My recommendation will be they must go with survival of the fittest 1 which is to enter Indias market using joint venture/ acquisition mode of entry. Exhibit 1 Estimate d Sales in units = 430000 units Contribution per unitCalculationsEstimated Sales grazing footing through Dealer Channel650=650*430000279. Million INR Penetration Price through Dealer channel300 =300*430000129 Million INR Skimming Price through Direct Sales force500 =500*430000215 Million INR Penetration Price through Direct Sales force200 =200*43000086 Million INR Exhibit 2 capital for business facilities and equipment30000 USD office facilities and equipment. 5000 USD organic investment35000 USD Exhibit 3 Contribution per unit (Average royalty per unit)300 INR Total no. of units sold (estimated) i. e. , National market potential430000 units Estimated Sales contribution300*430000=129 Million INR