Management analysis - Research Paper Example

Research Paper: Management Introduction International trade has overtime been celebrated essentially because itpresents consumers and various nations at large with the opportunity to acquire some of the goods and services that they do not produce locally. In as much as China is one of the most developed countries globally, the nation has on several occasions doubled up as the world’s largest market for air purifiers. The high demand for air purifiers in China is majorly attributed to the extreme level of air pollution within most of its towns and cities such as Beijing, Shanghai and Hong Kong, as well as the escalation in prevalence of allergic infections (Luk). In as much as various Japanese and South Korean air purifier organizations such as Panasonic and Sharp command a substantial portion of the Chinese market, several corporations within the United States are progressively intensifying their operations within the region. This research paper therefore aims to provide more insight on the Chinese market, with particular attention being bestowed to its customer base and local manufactures. Customer Analysis: Target Market The United States has several air purifier manufacturing organizations partly because its population is the second largest air filter market. It is imperative to note that the good performance of such establishments within the United States is majorly because they understand the US market, and provide the customers with high quality products. For firms such as Ecoquest, Honeywell, Austin Air, Friedrich and Blue Air to replicate a similar performance within the Chinese market, they need to understand its characteristics. It is of great significance to note that the target market for most of the US firms are majorly families who need to prevent themselves from the hazardous gases omitted to the atmosphere; notably particles with aerodynamic diameters of less than 2.5 micro meters. By installing air purifiers within their living and bedrooms, the families will be taking huge strides in guaranteeing their safety, as the inhalation of such gases increases the incidence of cardiovascular, cerebrovascular and cancer related diseases (Caprotti 82). Similarly, the American multinationals can sell their air purifiers to medical facilities and libraries, which will use the equipment to keep most of the patients and scholars who visit their premises healthy. The corporations also have ideal customers in administrators of airport and metro station terminals, notably because they should not put the passengers who use their services at risk of any illness. For museums, visitors interested in acquiring the history of the world will be at peace with the air purifiers installed, as well as those who seek alternative accommodation in hotels. Current Demand In as much as China, through its health department has been closely keeping tabs the level of hazardous gases across 163 of its major cities with the aim of embracing mechanisms to improve the situation, air pollution in China still remains a stark problem. This hypothesis is corroborated by the high demand of air purifiers in China at this moment. China registered an upsurge of 34% by volume in terms of air purifier sales, which was extremely high compared to 22%, which was the rate at which global sales stood. Consequently, it is factual to say that the current demand for air filters in China is high enough, an event that has attracted several American Internationals, most of which are highlighted above (Xu 11). According to input from Honeywell, which is a US based air purifier corporation, the fact that its sales have been steadily increasing at a 50% rate over the past three years is a statement that present-day air purifier demand in China is in elevation. Growth Opportunities Market analysts have overtime reaffirmed that the American air purifier manufactures who distribute their products to China are likely to accomplish their objectives partly because of the Chinese population. Given that China is the most populous nation in the world, it goes without saying that the nation’s citizens offer a huge customer base to the air purifier manufacturers. According to the past and future census statistics, the Chinese population is prospective to continue growing at a considerable rate, and market for air purifiers is likely to continue expanding over the next decade (Luk). TechSi, which is a research firm, predicted that the sale of air purifiers is likely to increase at a rate of 34% by the year over the next century, implying that the market value of air purifiers in China over the next five years for example, is likely to stand above $33 billion. This therefore projects that the area is likely to continue acting as a growth opportunity for most of the American corporations. Conclusion Given the target market characteristics and the expected market growth, Honeywell, Blue Air, Ecoquest, Winix, Oasis and IQ Air among other American multinationals should consider intensifying their operations in China. This is essentially because such a strategy would not only ensure that the trade relations between China and the US remain intact, but will also ascertain that the population of China and the larger Asia Pacific stays healthy over the long term. Direct Competitors Whereas several American corporations have deepened their operations in China, it is important to acknowledge that several other international players have ventured into the region. Such include established firms such as Sharp and Panasonic, which together control about 40% of the global air purifier market. Local manufacturers have similarly not been left behind; as well over one hundred firms currently take part in the manufacturing of air purifiers within China. This implies therefore that the American corporations face direct competition from the local and international air purifier manufacturers and indirect competition from entities such as Smart Air hosts, which provide their customers with components of assembling air purifiers, and takes them through the procedure of drawing together their own. Competitor A: G.D Midea Whereas several Chinese organizations take part in the manufacturing of air purifiers, G.D Midea is one of the most notable production firms. In as much as various products have developed into global brands by their companies going international, market analysts often argue that in some instances locally produced goods and services are well embraced in the market compared to the international merchandises. Consequently, it is of great significance to acknowledge that G.D Midea has a slight advantage over American corporations such as Honeywell. G.D Midea has an edge because the organization sells its air purifiers at a low price of about $495 to $660 compared to American multinationals, whose air purifiers retail at a charge of not less than $1500. In like manner, the organization has an upper hand because its products meet exceptional local needs, which make it easier for locals to acquire most of the air purifiers they produce. Marketing experts share the ideology that nostalgia significantly influences the performance of a given product within a specific market. It goes without saying therefore that many Chinese citizens may opt for G.D Midea air purifiers due to the simple reason that it is the brand they have grown up with and that they understand the logistics and functionalities behind their operations (Xu 15). Concisely, it can be said that G.D Midea has an advantage over the other foreign players in the market due to the strong community ties it enjoys within the region and the cultural identity associated with its products. For the American firms to have a substantial control of the market and sway it to their favor, they need to employ ideal marketing and production tactics, as that is the only way of guaranteeing that their international project will not be a failure. Competitor B: Panasonic As mentioned in the section above, Panasonic is undeniably a dominant player in the air purifier market, as the organization together with fellow Japanese manufacturer Sharp control about 42% of the air purifier market. Panasonic’s dominance can majorly be attributed to the fact that the organization employs modern technology in manufacturing its products as well as the fact that it is known for high quality merchandises. It is apparent that given the proximity between Japan and China, Panasonic may continue to enjoy a huge percentage of the Chinese air purifier market, as both logistics and operational aspects favor the organization. Indirect Competitors As mentioned while introducing this section, for the American corporations to establish themselves within the Chinese air purifier market, they have to adopt policies that help them counter the tactics of organizations such as Smart air hosts. This is majorly because the organization offers air purifier tool kits at $36 and at the same time takes its customers through the process of assembling the entire product on their own (Luk). Given that the total cost of acquiring an air purifier from Smart air hosts is $72, it is apparent that a substantial percentage of the Chinese market would consider settling for their products based on cost. In as much as Smart air hosts is only operative in Beijing, expansion overtime will ensure that the group develops into a substantial entity, which will rival other integral players in the sector after a while. Conclusion From the illustration above, it is apparent that the principal strengths of the direct competitors lie in the fact that they are local brands, hence heavily identify with Chinese population, and the fact that Panasonic readily embraces technology. Nonetheless, it is imperative to note that the American corporations still have an upper hand because they incorporate advanced technology that is unavailable locally while manufacturing their products. Additionally, it is it is important to note that the Chinese government has overtime argued that they will put up exhaustive regulations, aimed at ascertaining that the local manufacturers produce high quality air purifiers. In case such regulations are embraced, then it is apparent that majority of the local manufacturers will be hit hard, given that concerns have been raised regarding the quality of their air purifiers. From the discussion above, it is apparent that there is high demand for air purifiers within the Chinese market. Whereas local manufacturers have control of the market due to brand loyalty, American corporations such as Ecoquest, Honeywell, Oasis, Holmes and Blue Air among others can take advantage of the fact that they have advanced technology, which is replicated in the high quality of goods they produce and venture into the Chinese market. In doing that, it is imperative for the organizations to carry out ideal planning and enact policies that will supplement their efforts, as other brands like Panasonic and Sharp are doing well within the region. Works-Cited Caprotti, Federico. Eco-cities and the Transition to Low Carbon Economies. , 2014. Internet resource. Luk, Joseph. Clean Air for Sale in China. China Business Review. (2014). Accessible at: http://www.chinabusinessreview.com/clean-air-for-sale-in-china/ Xu, Zhonglin, and Bin Zhou. Fundamentals of Air Cleaning Technology and Its Application in Cleanrooms. , 2014. Internet resource. Read More