Fairchild Water Technologies
Case Study
Student: 00599-3878
By the year 2000, Fairchild Water Technologies, Inc.
(Fairchild) was a mature
company experienced in the realm of water technologies and offering a diverse product line consisting of desalinators, particle filters, ozonators, ion exchange resins and water purifiers. Even though their prices were higher than those of many competitors, industry experts generally regarded the product line as superior in terms of performance and quality. Fairchild had experienced some early success upon entering the markets of developing countries and was now poised to become a leading competitor in these foreign markets. Based on the information presented in the case study, I believe that Fairchild should aggressively enter the Indian market since there is a high likelihood that Fairchild could become the market leader in home water purifiers. Specifically, I would recommend that
Fairchild enter the market under a joint venture using a skimming pricing strategy.
Ultimately, this strategy should maximize profits and minimize the risks of entering the market of a developing nation. I will first outline why such a strategy is possible and then summarize the advantages (and disadvantages) of a joint venture. I will also outline how this strategy can be executed most efficiently.
1. In regards to market potential, there is a tremendous need for improved water quality in India. This need is exacerbated during the Monsoon season. Many Indian consumers had little choice but to consume the water as it was found. However, better educated, wealthier and more health conscious consumers took steps to safeguard their family’s health. It was estimated that there were 40 million such households in India and these consumers were similar in many respects to consumer in middle and upper class
households in the U.S. and the EU. They liked foreign brands as long as these products outperformed competing Indian products.
2. Fairchild developed the “Delight” purifier in
Student: 00599-3878
By the year 2000, Fairchild Water Technologies, Inc.
(Fairchild) was a mature
company experienced in the realm of water technologies and offering a diverse product line consisting of desalinators, particle filters, ozonators, ion exchange resins and water purifiers. Even though their prices were higher than those of many competitors, industry experts generally regarded the product line as superior in terms of performance and quality. Fairchild had experienced some early success upon entering the markets of developing countries and was now poised to become a leading competitor in these foreign markets. Based on the information presented in the case study, I believe that Fairchild should aggressively enter the Indian market since there is a high likelihood that Fairchild could become the market leader in home water purifiers. Specifically, I would recommend that
Fairchild enter the market under a joint venture using a skimming pricing strategy.
Ultimately, this strategy should maximize profits and minimize the risks of entering the market of a developing nation. I will first outline why such a strategy is possible and then summarize the advantages (and disadvantages) of a joint venture. I will also outline how this strategy can be executed most efficiently.
1. In regards to market potential, there is a tremendous need for improved water quality in India. This need is exacerbated during the Monsoon season. Many Indian consumers had little choice but to consume the water as it was found. However, better educated, wealthier and more health conscious consumers took steps to safeguard their family’s health. It was estimated that there were 40 million such households in India and these consumers were similar in many respects to consumer in middle and upper class
households in the U.S. and the EU. They liked foreign brands as long as these products outperformed competing Indian products.
2. Fairchild developed the “Delight” purifier in