Critical Thinking Analysis (Hyflux)
Hyflux specializes in membrane technology, providing integrated solutions for municipal water treatment as well as for industrial manufacturing processes. We face relatively high competition from both local and international players and yet were able to secure our own share of the market. Despite a relatively high level of rivalry, revenue has been increasing at an exponential rate. The water business is a good market to be in, as water is a necessity; demand for clean water is strong and will become even stronger due to growing water scarcity.
Strategy
Our overall corporate strategy should continue to be related constrained, where our dominant business is in water. Our other businesses could benefit from the membrane technologies from the research and development (R&D) for better water treatment.
The water business will adopt an integrated cost leadership and differentiation strategy. The costs should remain relatively low while maintaining the perceived value of our products and services high through constant innovation and technology developments.
Recommendation 1
Keeping water as our core business, we should continue to expand into China, India and the MENA regions, in cities with insufficient water supplies to increase our share of the market. In order to do so, there are two main hurdles.
1. Securing contracts for the water treatment
2. Meeting the aggressive penetration strategy in terms of labor and resources
1. Securing contracts for the water treatment
Competitive Dynamics - Price
We believe that our targeted market is concerned with meeting the demand for clean water as much as possible and pricing would be their primary concern. Therefore, to compete with other international players, we must be able to deliver at a lower price with a decent quality. In order to do so and yet returning profits, costs have to be lowered.
There are two main cost components; labor and production.
Firstly,...