Case Analysis: Blair Water Purifiers

(b) Strategic Alliance:

Here, Blair would make an agreement with a non competitor to share resources by spelling out the precise scope of the alliance and all the details of how it will be accomplished like a common goal, a strategy that defines the role of each partner to accomplish that goal, the parameters of working toward that common goal, key steps that each partner will take to meet the requirements of the agreement, a time frame for achieving those key steps, an outline of each partner's accountability by including consequences for "worst-case scenarios" such as missed deadlines, budget overruns, or products not delivered as promised or in the format expected. Possible strategic alliance could be a partner who could cross sell Blair's water purifier. Payoff for the partner could be in a percent participation of every sold product of Blair's water purifier or a flat return per unit sold. Strategic alliances usually make sense when the parties involved have complementary strengths. If Blair is unable to find a party with the same strengths as Blair, the project could be at risk and the common goal not achievable. Are there opportunities for a strategic alliance with a non-competitor, where you could each benefit from cross-selling? The joint effort can involve anything from getting a better price for goods by buying in bulk together to seeking business together with each of you providing part of the product. The basic idea behind strategic alliances is to minimize risk while maximizing your leverage in the marketplace.

(c) Joint Venture:

This would involve for Blair to partner with an Indian company that manufactures then Blair's water purifier and also markets it. The only difference to Licensing is that Blair splits the profit with the Indian company. The venture is for one specific project only, rather than for a continuing business relationship as in a strategic alliance. A specific project for Blair could be to promote their water purifier product. Here the financial investment would be much larger than for Licensing.

(d) Aquisition:

Here Blair would buy an Indian company that would then manufacture Blair's water purifier. This is the only alternative that would give Blair all profits as well as being able to market their product on their own. This seems to be the most profitable way for Blair if they would have a huge success with their product in India. But in addition to all the fixed cost like in a joint venture, Blair must have an even higher investment amount to purchase a company.

3. Decision Criteria

One criteria could be PRODUCT PERFORMANCE. Blair needs an Indian company who is able to produce a superior product. Another criteria by choosing one of the alternatives should be the PURCHASE PRICE. Which alternative would give Blair a possibility to enter the market with a fair market price passed on to customers willing to pay for the product. Or in other terms, which alternative could give Blair the highest margin by having the least costs. Another important criteria for Blair should be EASE OF INSTALLATION AND SERVICE. Is the company they buy or work together with capable of giving good service to the customers. Beyond that WARRANTY AND AVAILABILITY OF FINANCING should be also a criteria for Blair in choosing an alternative and an Indian partner or company. Furthermore, Blair should take a look at the possibilities of tax concessions. Another criteria could be therefore how does TAX TREATMENT in the different areas in India affect the business of Blair. Where will be the most likely biggest payoff. Finally, the last decision criteria for Blair should be if the Indian company has the CAPABILITY in terms of skills and manufacturing capacity to produce the product in larger quantities if the market should grow rapidly.

4. Recommendation and Implementation

In order that all criteria can be influenced by Blair but at the same time the risk for Blair in regard to their investment reduced, I would suggest that Blair should opt for Alternative number 3, the joint venture. Reason for this is that Blair would here partner with an Indian company, who knows the market best plus they split the profits and Blair still can have an input in the overall strategy of their product. Also, Eureka Forbes, the best established competitor is a joint venture company that is the current market leader and very successful with being a joint venture company. The companies Blair has already identified have already a dealer network that could be used for this product.

As what the pricing strategy is concerned, I would opt for the penetration strategy with the dealer channel as well as with a direct sales force. Penetration has several advantages. As demand in India is price sensitive, this would mean new buyers could be attracted to Blair's product and even existing buyers could be tempted to buy more or additional ones. With the penetration follows a large sales volume that will lower the costs per unit even more for Blair. The only thing Blair should look is that their partner in the joint venture has enough production and distribution capabilities to meet the demand.

Blair could be so the disruptive innovator with a simpler and more convenient water purifier that sells for less. This would be the best way to attack the established competitors.

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