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Case Study 3 Analysis

Bright Light Innovations: The starlight Stove

Submitted to
Dr. Leslie Toombs
Course Instructor: MKT 521. 01E

Prepared by
Ahmed Hossain
CWID: 50116869

Date of submission: 16th April, 2014

Critical Issues
a. Bright Light Innovations needs a fitting marketing plan to introduce its new product
the Starlight Stove in Nepal.
b. Their product consists of an enclosed stove with an efficiency of 50-70 percent over
conventional stoves in fuel consumption and an adjoined unique thermoelectric generator, which
converts heat from the stove into electricity.
c. Their product offering consists of new technology that does not have proper level of
consumer awareness in the target market. Thats why thought the product may have superior
need satisfaction attributes it might face slow growth in comparison to its substitute products
such as solar panel, micro-hydropower electric generator and enclosed stoves offered by
competitors.
d. The Bright light innovation team chose a for profit business structure for their product.
However they are facing difficulty to create viable financing plan for their business venture.
They are also concerned with the possible distribution channel for their product.
e. They team also needs a stout promotional plan to reach a challenging population with a
less than 50 percent literacy rate among adults.
f. The team has contacts of some influential people in the country, which can be
instrumental for the business endeavor.

Literature Review
To understand the market situation of the bright light innovation the SWOT analysis can
be a useful tool. The SWOT analysis of the bright light innovation is given below:

a. Strength:
1. Passionate development team who are highly motivated about the future of the
product.
2. 50-70 percent more fuel efficiency of the product over other market substitutes.
3. The unique value proposition of converting heat into electricity giving the product an
edge over competitors offerings.
4. The product is inexpensive compared to other substitutes.
5. Offers multiple direct and indirect benefits to its customer regarding, health,
convenience and productivity and choice.
6. The business team has contacts of important business and government individual and
social workers in the target country, which could be potentially expedient for the business
venture.

b. Weakness:
1. Due to the originality of the product there is low or no awareness among the target
market about the product.
2. As a new business the product will require substantial funds for market penetration.
3. The financing model for the business is still in hypothetical level.
4. The proper distribution channel hasnt been decided yet.
5. The target market for the product poses real challenge as the majority of the adults in
the target population is unschooled.
6. As a new venture the firm lacks experience in operating business both in local and
international market place.

c. Opportunities:
1. The product has a prospective 2.4 billion customer all over the world.
2. The firm planning to create local manufacturing facility for the product.
3. The similarity of demographical characteristics may make northern part of India next
lucrative market for expansion.

d. Threats:
1. Potential threats can come from the bureaucracy, existing competitors, cultural barrier
and local outlaws.
2. Political instability can hamper business activities and create unexpected setbacks.
3. The land-locked geographic reality of the country can increase the production and
transportation cost for the business.

Bright Light Innovations, a new company, developed by student and faculty members of
Colorado State University plans for an international business venture for their product Starlight
Stove. Their target market is Nepal, a geographically isolated country with a population of
30,986,975 (South Asia: Nepal, n.d., para. 3). Nepal is one of the poorest country in the word
with per capita income of only 400 dollars. According to the case only 11 percent of the
population of the country have access to electricity and 80 percent people use solid fuel such as
coal and fire wood to produce energy. The population has a high illiteracy rate as less than 50
percent adult can read or right.

The Bright Light Innovations product the Starlight Stove has a distinct value proposition
which can be attractive to the target population as the product solves two important problems
faced by the population in their everyday life. Firstly, an efficient heating system and Secondly,
an independent source of electricity. According to Srestha (2010), in year 2008 the level of load
shedding was 16.5 hrs per week in Nepal. The product is also less expensive compared to the
other options available in the market.
Though the business venture have potentially good product for the market place but lack
of experience could create hard challenges in fulfilling its business objectives. For example: The
case doesnt give us any indication that the product has been produced or tested for production in
domestic conditions. Furthermore, due to lack of experience of operating a business in real life
situation can create critical problems while operating in a more culturally diverse and
complicated international environment. According to Twarowska & Kakol (2013), the typical
reason why businesses go global is for growth and extension. Here in the case the firm wants to
initiate its business in an entirely alien environment, which can be evaluated as a highly risky
venture.
Moreover, the founding team of the product has not yet designed suitable business model
for the firm. The structure of an international business is different from that of a local business.
There are different types of international business structures based on risk and involvement in a
particular country. If the company decide to build manufacturing plant in Nepal the country will
opt the high risk and high involvement strategy for business operation. This will require direct
investment in that particular country. According Twarowska & Kakol (2013), to the other options
include exporting and importing, licensing, franchising, joint venture, strategic alliance etc.

The competitors for the firm include other efficient stove manufacturers, solar panels and
micro-hydropower plants. In Nepal the micro-hydropower is getting quite popular and prolific
due to financial assistance of World Bank and natural abundance of rivers in the territory.
According to Basnet (2014), generally micro-hydro project is built and run by community
ownership with the help of AEPC (Alternative Energy Promotion Center). Such plants can meet
the electricity need for five neighboring villages. However, Bright Light Innovations product can
provide consumers a more personalized source of electricity in Nepal.
According to Adhikari (2010), the consumer market of Nepal can be distinguished by
its agrarian nature. Majority of the population lives in the villages and farming is the prime
source of income for households. The nature of the market is oligopolistic. There is an absence
of consumer protection rights and low level of awareness. Like other Asian culture the
consumers are price sensitive. There is general inclination of purchasing a product in credit. Due
to primitive nature and infrastructure and lack of qualified man power marketing and
promotional effort is not fully developed yet. Most of the cases native firms relies on Indian
personnel for expertise.
The nature of geography has made Nepal a unique geopolitical case. The country is
encircled by India from the south and China from the north. It has some border with Bhutan and
no coastal or maritime border. It is a landlocked isolated country. The big neighbors play a
crucial role in Nepals domestic and foreign policies. According to Bhattarai (2005),
Sandwiched between two giant neighbors, India and China, Nepal is generally perceived as a
tiny Himalayan country (p. 7).

Alternatives
Based on risk, control on resource and promised return on investment the entry strategy
to a foreign market can be divided into three parts:
Low Risk
Export & Import
Licensing

Medium risk
Franchising
Joint Venture

High Risk
Direct investment
Strategic Alliance

Marketing plan alternatives (4Ps) depends on target market. The company can
differentiate its product or use mass marketing tactics.
Pricing strategy can be based on differentiation or mass marketing alternatives.
As the countries media infrastructure didnt have the reach in the mass market due to
impoverished population the firm should depend on traditional means of promotion such as
pamphlets, direct marketing.
In Nepal the distribution is dictated by few influential business man. This creates an
opportunity in one hand and risk on the other. If good relation with some of these persons can be
created and maintained then the distribution process is going to be easy. Otherwise creating firms
own distribution could be a time and resource consuming option.

Recommendations:

1) As a new company the firm should take a cautious approach in creating its business
model. I should choose low to medium business strategies to enter the foreign market. Such as
Export and import or Joint venture.
2) The distribution channel is crucial for successful business and cost reduction in Nepal.
The team should try to secure building good relationship with important distributors in the
market. Because they are also important for the promotion of the product also.
3) They can use school teachers to raise awareness among children about the product as
the children can be influential in decision making of their parents.
4) The company should choose competitive pricing strategy as the customers are price
sensitive.
5) The company should also spend resources to understand and reflect the countries
culture to make the product user friendly and popular.
6) The company should plan to open its production facility in India rather than Nepal.

Bibliography
South Asia: Nepal. (n.d.). Central Intelligence Agency. Retrieved ,

from https://www.cia.gov/library/publications/the-world-factbook/geos/np.html
Srestha, R. (2010). Electricity crisis (load shedding) in nepal, its manifestations and ramifications.
Hydro nepal, (6), 7. Retrieved from http://www.nepjol.info/index.php/HN/article/viewFile/4187/3561
Twarowska, K., & Kakol, M. (2013). International business strategy - reasons and forms of expansion into
foreign markets . Active citizenship by management, knowledge management and innovation knowledge
and learning, 1007-1009. Retrieved from http://www.toknowpress.net/ISBN/978-961-6914-024/papers/ML13-349.pdf
Basnet, U. (2014). renewable energy powers rural nepal into the future. Future Story,
Retrieved from www.worldbank.org/en/news/feature/2014/02/05/renewableAdhikari, R. (2010, July 21). Characteristics of nepalese market.
Retrieved from http://rajeshadhikari12.blogspot.com/2010/07/characterstics-of-nepalese-market_21.html
Bhattarai, R. (2005). Geopolitics of nepal and international responses to conflict transformation.
(1st ed., p. 7). Kathmandu: The Printhouse. Retrieved from
http://indiamadhesi.files.wordpress.com/2008/10/geopolitics-of-nepal.pdf