Transcript of Fairchild Water Technologies, Inc.Alternative Courses of Action1. Do Not Recommend Entry into India Market

2. Recommend Entry into India Market under Licensing Agreement

3. Recommend Entry into India Market under Joint Venture Arrangement using Skimming Pricing Approach

4. Recommend Entry into India Market under Joint Venture Arrangement using Penetration Pricing ApproachQuestions?Fairchild Water Technologies, Inc.Major IssueShould we recommend Fairchild Water Technologies enter the India Market?

If yes, what mode of market entry should be used?Amy Condrin Bethany EgglestonRyan Ketchum Amanda Prestia`1. Do Not Recommend Entry into India MarketAdvantagesAvoid risk associated with entering foreign market in developing country.Resources available for other expansion opportunities.DisadvantagesLose market benefits:Expanded Brand AwarenessFinancial GainsExpanded Market BaseIncreased International CompetitivenessOpportunity to gain significant market shareNo dominant competitor exists2. Recommend Entry in India Market under Licensing AgreementAdvantagesMinimal financial investment required.Require small portion of target market to see financial gains.Maintain production control and adaptability.No existing dominant competition.Capitalize on market knowledge of Licensee and experience of Fairchild.DisadvantagesLicensee would control operations.More standard Product design.Less control over positioning.Only receive a royalty fee.Licensee could become competitor.Risks of entering foreign market in a developing country.Resources not available for other expansion opportunities.4. Recommend Entry in India Market under Joint Venture using Penetration Pricing ApproachAdvantagesProfits split between two parties - better than royalty fee.More control over operation and product distribution.Penetration pricing more in line with competitor pricing.Benefits of international expansion.

Maintain production control and adaptability.No existing dominant competition.Capitalize on market knowledge of partner and experience of Fairchild.DisadvantagesLarger initial investment.Greater units needed to break even (Alternative 2).Risks of entering foreign market in a developing country.Resources not available for other expansion opportunities.Success strongly dependent on relationship with selected partner.Recommend Fairchild enter India Market under Licensing Agreement

Recommended Course of ActionEnter Market with relatively low risk, minimum financial commitment.Leverage marketing knowledge of LicenseeReach break even units faster than under joint venture.If successful, option to move to a joint venture or direct investment.

3. Recommend Entry in India Market under Joint Venture using Skimming Pricing ApproachAdvantagesProfits split between two parties - better than royalty fee.More control over operation and product distribution.Benefits of international expansion.Maintain production control and adaptability.No existing dominant competition.Capitalize on market knowledge of partner and experience of Fairchild.DisadvantagesLarger initial investment.Skimming approach prices products higher than competitors.Risks of entering foreign market in a developing country.Resources not available for other expansion opportunities.Success strongly dependent on relationship with selected partner.Licensing Agreement AnalysisJoint Venture with Penetration Pricing AnalysisJoint Venture with Skimming Approach Analysis