Swot Analysis of White Appliances Company - Essay Example

White Appliances Case Memo White Appliances is an international company that markets household appliances globally. The company also manufactures high end-models of microwave that are sold in the United States and Asian markets. In these markets, the company mainly concentrates on high income earners for its main market. Currently the company is eyeing the opportunity of marketing its products in the Indian market especially to the booming middle class. Initially microwaves had been considered as appliances for high-class citizen. With the new opportunity, the main issue is how the company is going to change people’s perception towards its products in order to acquire the Indian market successfully. To evaluate the suitability of the new idea, White Appliances limited needs to consider the SWOT analysis for this case objectively. A SWOT analysis will be a useful technique that the company can use to determine its strengths, weaknesses, opportunities, and threats before considering the new venture. The technique will enable White Appliances to determine or identify a sustainable niche in the competitive global market. Using the SWOT analysis the company will be able to determine strategies that will make it stand out from its competitors. Strengths As a manager of the White Appliances limited, the company has adequate strength to penetrate and establish itself in the new Indian market. The company’s strengths are determined by what the company can do better than its competitor and factors that enable the company to stand out from its competitors. To begin with, White Appliances produces its microwaves from both its Asian and American manufacturing lines. The company markets its microwaves mainly in the American and European markets. Having two manufacturing locations for microwaves will enable the company to penetrate and sustain the Indian market. The company also needs to sustain its old markets while it searches for a new markets, the company can therefore decide to use its Asian production units to concentrate on the new market while the American production unit concentrates on the existing markets. White Appliances has marketed its products successfully in major European and American markets. This implies that the company has a good and reliable market that it can turn to incase the new venture prove to be unpromising. Being able to control the European and American markets has also enabled the company to acquire adequate profits that can be applied in any expansion measure undertaken by the company. The ability to control the American and European markets indicates that the company produces high quality appliances. Dominating the European and American markets has enabled the company to gain a good reputation as a producer of high quality products. The European and American markets are associated with people of high living standards and therefore, it is expected that they buy commodities of high standards. Indians expect a company that serves the European and American market to have high quality products and this factor will create favorable condition for entering the Indian market Using the Asian production unit, the company will be able to cut its production cost by eliminating the costs required to transport the finished products to the Indian markets. This will enable the company to offer its microwaves at a reduced cost as compared to its competitors. Marketing the products at a competitive cost will enable the company to gain ground in the new market. Offering microwaves at a competitive price will also enable the company to acquire the targeted middle class markets. Weakness Although White Appliances has the stated factors as it strengths, the company has areas of weaknesses that it needs to address to acquire the target market successfully. The weaknesses of the company are factors or things that the company needs to change to successfully acquire the Indian market (Elliott, Rundle-Thiele, & Waller, 2010). The weakness of the company will also be concerned with factors that would make the company to lose its share of the market or sales to its competitors. Concentrating with the American and European high-class society as the market for its product will be the main weakness in the new market. Being associated with American and European markets makes people to perceive White Appliances as a company that produces expensive commodities aimed for the upper-class citizens. The targeted Indian market is composed of middle class earners and the perception will make them anticipate high prices for White Appliances microwaves (Kalb, 1993). The company has also been associated with the high-income segment of the Indian market. This factor will also contribute to the poor perception that people have towards White Appliances products. Secondly, the company is involved in the production of other household appliances and therefore, it may not concentrate adequately on the production of microwaves for the newly acquired markets. The divided attention will make the company create loopholes that its competitors can use to advance their products in the Indian market. Opportunities in the Indian market Opportunities are the factors that the company considers as attractions in the new market. Opportunities for White Appliances Company are also concerned with factors that the company considers interesting in the new market (Mind tools web, 2012) Firstly, the Indian society is experiencing a change of lifestyle due to the improving economy and cultural integration. Initially people perceived a microwave as an appliance designed for the wealthy members of the society. The trend has reversed and the Indian society now considers a microwave as any other ordinary appliance. White Appliances Company should therefore view this change in trend as an opportunity to market their microwaves in the Indian market. Secondly, India has a fast growing middle class society. According to the case study, India has 17- 90 million households in the middle class. The case study also shows the country has another 287 million household that are aspiring to join the middle class. Currently each Indian middle class household controls between $4,500 and $22,000 annually, this is a significant spending compared to the European and American spending. The growing middle class and improved earnings per household present an excellent opportunity through which the company should market its products. Thirdly, the case study indicates that American Indians are repatriating to their home country. The repatriating Indians are brining American spending habits and lifestyle to people currently living in the country. Buying and using microwaves is more of an American habit than an Indian habit. However, due to the increased repatriations, the spending and consumption behaviors have reversed in favor of the microwave market. Initially a microwave used to be an unknown item in the Indian society, this implies that the appliance was not only out of reach for most household but information concerning its use was scarce. With the modern development in information technology, most Indians are aware of the usage of the device and this has created the urge to own the appliance. This has resulted into a 27% increase in the demand for microwave ovens over the past two years. Threats facing white Appliances Although the White Appliances company is considering the Indian market as an appropriate market for its microwaves, the company needs to consider threats that face its successful establishment. (Mind tools web, 2012). Due to the interesting nature of the Indian microwave market, the market has attracted other competing companies such as LG and Samsung. These companies are also considering the same opportunities considered by the White Appliance company. The company might consider applying other measure to improve its competence and this will increase its net production cost making its products uncompetitive in the Indian market (Greiner, 1972). . According to the case study, most customers buy a microwave after a detailed consultation, this implies that a microwave is not bought through impulse buying. Being the main competitor in the Indian microwave market, Samsung has responded by establishing a call center that offers free consultation to existing and potential microwave customers. This step has increased the company’s competence in the competitive market. Recommendations Considering the company’s SWOT analysis, the company needs to make some few improvements in its operations in order to acquire the intended market (Bade & Michael, 2001). Firstly, the company needs to change people’s perception towards its products, initially people associated the products with the high-income earners, and this perception is not appropriate in the Indian market that mainly composed of the middle-class earners. Secondly, the company needs to consider establishing a production facility that concentrates with the production of microwaves next to the market. The company can achieve this by establishing a manufacturing center in India. White Appliances limited also needs to have appropriate market information concerning its products. The company also needs to establish strong ties with the Indian customers. For the company to achieve this, it should consider establishing call centers similar to those established by Samsung. Using these call centers the company will be able to acquire first-hand market information and conduct the required customer care. Finally, the company needs to consider creating a separate branch that will concentrate in the production of microwaves for the newly acquired Indian market. With the new branch, the company will be able to satisfy the new market effectively. References Bade, R. & Michael P. (2001). Foundations of Microeconomics. New York: Addison Wesley Elliott, G., Rundle-Thiele, S., & Waller, D. (2010). Marketing. Milton, QLD: John Wiley & Sons Greiner, L. (1972). Evolution and revolution as organizations grow. Harvard Business Review. July-August, 37-47. Kalb, I. (1993). Structuring your business for success. New York: K & A press. n.p, (2012). SWOT Analysis Discover new opportunities. Manage and eliminate threats. Retrieved from Read More