The Target Market
For the following reasons, China shipping businesses are the target market. First of all, the Chinese economy is currently among the strongest in the world. Due to this strength, China's shipping fleets have extra money to invest in modernization.
Second, China exports a lot of goods to many countries, including the US. China must have a larger fleet in order to meet the rising demand. Third, the political ties with China give the US access to this market through the NAFTA pact with a postponed or reduced tax. And last but not least, China is a politically stable country. So any investment is safe from a political change.
Market Needs
The US market is the largest market for China. The Chinese ships have to travel 11,640km to reach this market. So to keeps profit high and costs low, China has a huge interest in reducing the fuel cost for their shipping fleet. Additionally, the fleet needs reliable engines to ensure a non-interrupted service during the long journey between the two countries. Any ship that breaks midway costs the company a lot of money to towing for repair. This is a huge loss for the company in addition to the loss of income that this ship may produce.
Furthermore, the increasing cost of fossil fuel helps market the product to China. This cost alone is about 20% of the cost of any product sold in the US. Hence, a 50% cost reduction will increase the revenue by 10%.
Market Trends and Growth
As stated earlier the China market is growing at a rapid speed. The Chinese currency CNY is mostly stable. This stability will allow the negotiations and pricings to hit their target mark from both sides.
This market is one of the ultimate tests to prove the efficiency of the product. Once done, many companies all over the world will follow suit. The potential ROI from this free marketing alone is huge.
This market will allow the company to mass-produce this type of engine. The mass production allows cost reduction. The cost reduction will be from both the manufacturing of the product and raw materials as these will be bought and produce in bulk.
This market can create a healthy and stable foothold for the company to open a plant in China. The plant can produce this product and maybe more products as well.
SWOT Analysis
Diesel Engine has the potential to make this product at a larger scale. The past three years’ significant profit can fund this extension.
The plants are equipped with state of the art equipment to produce top quality engines.
The engineers and workers that help design and produce the engine are the best of what the market could offer. The technology used for the engine is a trademark of the company. Hence, the monopoly to produce this type of product is guaranteed.
There are some weaknesses in this market. First one is due to the language difference between the customer and us. The difference will make the communication harder and may require third party acting as facilitators. Second, the shipping cost is high because of the client's distance from the plants. Third, the cost is high to send experts to oversee the proper installation of the product. All these facts could reduce the profit margin.
Competitive Review
The near similar product is GM555 made by GM. This engine offers 3800 THP with up to a max of 16 cylinders with four-stroke turbocharged. The fuel consumption is 10% higher than D999 and provides 20% less power than our engine. The good news is that GM’s primary target market is South America as they have had an established presence in the region for some time.
Product Review
The engine we are offering is the D999. This engine run provides 4400 THP with up to 20 cylinders with two-stroke turbocharged. The amount of power this engine will allow the ships to travel faster and navigate waters that were out of reach before.
The total weight of the engine is 30 tons. The difference in weight allows the ship to transport more freight than ever before. The vibration that this engine produces is very minimal, making it optimal for ship usage, as they do not create any damage to the ship structure.
The engine is optimal at 70KPH, and this speed is the same as a big ship's maximum cruising speed.
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