1. Does it make economic sense to enter the US market?

Attributes / Existing
Wastewatch Thermatrix Advanced Air
Product Profiles
Meets
Efficiency Exceeds 5% Exceeds 9%
specifications
Delivery time 9 months 12 months 9 months

Price 600000 900000 600000

FOB, with service FOB, with service Installed, with
Delivery terms
contract contract service contract

Attributes / New Product

Servair DX Premier DX Base model
Profiles
Meets
Efficiency Exceeds 9% Exceeds 5%
specifications
Delivery time 15 months 12 months 12 months
Price 900000 900000 700000
Installed, with Installed, with Installed, with
Delivery terms
2-year warranty service contract service contract
Profit margin(*MKT share) 380k*19%=72.2 430k*14%=60.2 200k*9%=18
Obviously among these three new products the best option is the Servair DX, and I think it

makes economic sense to entry the US market.

2. If so, what would be the best offering to make?

Attributes / New
Servair DX Premier DX Base model new
Product Profiles
Meets
Efficiency Exceeds 9% Exceeds 5% Exceeds 9%
specifications
Delivery time 15 months 12 months 12 months 6 months
Price 900000 900000 700000 900000
Installed, with Installed, with Installed, with Installed, with
Delivery terms
2-year warranty service contract service contract service contract
Scenario / Product New Product
Wastewatch Thermatrix Advanced Air
profiles Profile
Predicted market
45% 4% 51% n/a
shares
...with Servair DX 38% 2% 42% 19%
...with Premier DX 43% 1% 41% 14%
...with Base model 44% 4% 43% 9%
...with new 4% 0% 27% 69%
As I create the new product whose spec is [Exceeds 9%][6 months][ price 900000][ Installed, with

service contract], it turned out its Mkt share will be 69%, and the Profit margin is 390k. Multiply
market share times profit will be 269.1 which is incredible high! And I think we can say
goodbye to the three profiles that management is currently considering if I wasn’t wrong.
3. Would it be better to provide two different offerings? If so, what should they be?

Discriminant variable / Cluster Overall Cluster 1 Cluster 2

Food 0.194 0 0.273
Energy 0.226 0.778 0
Sales$_2004 13.077 34.133 4.464
Profit% 5.461 9.611 3.764
Return_on_Equity 18.223 19.467 17.714
Employees 26.371 56.333 14.114
SalesGrowth_(2003-2004) 17.058 9.467 20.164
TopMgt 30.871 18.889 35.773
Engineering 34.645 20.111 40.591
Finance 15.548 28.889 10.091
Purchasing 19 32.111 13.636
Growth 13.161 21.889 9.591
Profit 22.968 28.333 20.773
MarketShare 11.484 14.222 10.364
TechLeadership 10.806 15.778 8.773
CorpCitEnv 19.871 6 25.545
GovReg 21.806 13.556 25.182
Cluster 1 may be the factory user and Cluster 2 may be the IT company user.

And I don’t think it would be better to provide two different offerings

4. Which segment(s) of the customers should they target, with what selling

proposition for their new offering(s)?

They should target the factory user with the shorter Delivery time and the high efficiency,

and provide the free maintenance very three months.