As one may see all the major competitors have almost the same starting-point (except SMC as a native producer which is a big “plus”). Festo competes with producers whose major advantage is their price. But the quality is thus much worse. Festo should use its know-how and develop an original local product, the golden mean between costs and quality. The market situation itself, the environment described above are really favorable for starting actions. As the SWOT-Analysis (see Appendix 5) shows, Festo has quite reasonable chances and opportunities which should be applied into the new marketing strategy.
Festo was always known by its high standards of quality. A machine itself is broken but Festo products as machine-parts continue to function. High quality usually means high costs. But as written above Hong Kong products are characterized by quite low costs. Festo Hong Kong gets all the products delivered from European Festo plants, but in case of special application one receives only special components and the final assemblage is conducted in Hong Kong. As a possible way to increase to a turnover Festo Hong Kong should develop a regional low-cost product which would completely satisfy the local needs.
It is true that some customers might complain that they do not always need really high-tech products which operation period is much longer that of the system it is built in. That is why it is necessary to develop a local version of the least wide-spread product. This product should be produced in the Chinese Festo Plant which is currently being built. This product must cover the whole Asian market. Of each of the Asian countries has its own requirements, but one could develop several local versions.
For the market research and the development Festo should engage in students from the local University of Hong Kong. Festo spends a quite great amount of money supporting really talented students and even offers them a job right after graduation. Our proposal would be an organization of competition for the student which would include a team-work; each team should conduct a market research and find out the actual highest and lowest requirements of pneumatic consumers; the second part of work includes the proposals of students for Festo – how one could realize these requirements with Festo Products.
Of course this includes a prior instruction of students regarding Festo (its products, principles, strategy, requirements, abilities etc. ) in order to guarantee the full understanding of what is needed. The project’s time should be enough to have reasonable suggestions at the end. By the time the Chinese plant is built, the project should be over and there should be a final proposal available (see Appendix 6). The strategy of Festo always was directed into the world.
The aim of Festo is to be presented in every single region of the world and to deliver products in 24 hours. 5. Conclusion. Festo should develop its Asian Market and use all its advantages. While most producers have only their distributors or sales-companies, Festo should count on its own plant with local chip labor and low-cost local product. Festo wants to be presented in every part of the world. So now it is the right time to do it: Local low-cost product. Local labor. Local plant.
The “locality” of Festo Hong Kong in the Asian Market should now take the first place in Strategy of Festo in the whole.
Company FESTO – Facts and Figures. Retrieved from the Web June 25, 2004. http://www. festo. com/INetDomino/coorp_sites/en/e554e6965bffe266c1256b3b002842c3. htm Festo Products. Retrieved from the Web June 25, 2004. http://www. festo. com/INetDomino/coorp_sites/en/160666a440269f51c1256b82004afc70. htm About us. Festo Hong Kong. Retrieved from the Web June 25, 2004. http://www.hktdc.com/en-buyer/#major_economic_indicators