Mercaan Systems Case Study

The second alternative to enter the market is forming a joint venture. This would involve Mercan Systems partnering with an existing Indian company solely for the purpose of manufacturing and marketing their water purifiers. An advantage of this option is that it is also relatively low to moderate risk. Mercan Systems would be partnering with an existing company that already knows the Indian market and has the experience. There are many potential partners already in India to choose from so Mercan Systems would have many options to assess and find the best fit to partner with. They would be able to gain and utilize the knowledge and skills of their partner who has already been successful and have experience in this new market. Their partner

This could involve continuing the production and sales of products that Mercan Systems may not be interested in or successful at achieving. They may not be strong or good at continuing the operations that the purchased company had. To expand the company’s operations to include their water purifiers, Mercan Systems may have to restructure the entire company or production process to fit their needs which may involve additional financial investments. Annual fixed expenses would be identical to those required for a joint venture, depending on whether they choose to distribute through dealers or a direct salesforce in two regions, four regions, or nationally, but the additional investment needed to purchase a company would make a considerably higher initial investment. Additional financial investments of purchasing a company, possibly needing to restructure it, and other expenses may not be worth the high uncertainty involved in this alternative. The company may have a bad reputation or bad public relations that Mercan Systems may not initially be aware of, which brings the uncertainty and risk of dealing with these