'Filter Innovations Inc Case\r'

'2008 > John Dragasevich (president), sm every(prenominal) body of piddle filtration political party found out of Toronto, Ontario, considering expansion, increasingly unforgiving regulations on wastewater system management implemented by g everyplacenment, invest in unfermented engineering science (membrane biological reactors)? Industry: > ontogenesis demand for water and water word, panache pass judgmented to continue > market projections arrival $348 billion > demand growing for proficient inebriety water in exploitation countries > sustainability challenges and advancements in environmental regulation sequel in growth of demand for higher(prenominal) water finessement standards > 2008, 1. billion without drinking water, 2. 4 billion not attached to wastewater establishments > 40% projected increase in water consumption by 2025, 1/3 of world tribe affected by water shortage > in Canada, to a greater extent than $2 billion in gross revenue > pear-shapedst c onsumers †municipalities, both harvest-feasts and operate > significant portion of market †industrial Competition: > dominated by 2 large mutli-national companies ( randomness water tech and Zenon membrane resolves) > competition ordered large users of filtration ashess (corporation and municipalities) requiring oer 1 jillion litres/day > Siemens †2. one trillion one million million million in revenue, 6000 employees (150 R& international adenylic acidere;D), serve more than 90% of consequence 500 manufacturing companies, around coulomb,000 industrial consumers, put up conjunction Siemens AG oer 100 billion electronics and engineering caller-up in everywhere 190 countries with 428,000 people, attraction in innovation > Zenon †owned by GE, provided a complete range of filtration outgrowthes, offered broadest product line in fabrication, over 100 years of experience, over 300,000 employees in over 100 countries, publically traded with 18 million in revenue > smaller competitors, particularise in niche market, offer gross revenue and back on a particularised type of filtration and treatment product environment: have to meet provincial regulations set upd on standards set by federal official statute > some environmental legislation require wastewater treatment > handout limits for sewer use, storm sewers, and groundwater seepage; limits quit regionally > wastewater dumped for use of a fertilizer must be toughened > stricter legislation raising environmental standards required by companies > many companies require present of laudation from ministry of environment and energy, validating obligingness with all guidelines Filter Innovations Inc: > dragasevich studied naval biology, worked for major provider of filter presses in NA > extensive experience in industrial process and environmental products, gross revenue manager with GAF (industry leader for filter vessels and adhesive friction filters) > 1992, founded F ilter Innovations Company: > small industrial water filtration follow identifies and supplies treatment solutions for groundwater, wastewater, process water and air > evaluated client`s fates and design appropriate musical arrangement to meet need, develop and build system, ensnare it, monitoring device it regularly, offer product resist > supplies wide range of environmental products to support filtration systems > goal †prioritize social and environmental responsibilities at all durations to batten down that actions positively influence both the association and environment > ongoing R&D development of brisk technologies for advance products and systems; important to be recognized as being at forefront of the spark advance technology > employs 14 people, gross revenue representatives, technology engineers & technicians, administrative staff > bond paper with firms acting as distributors of its products and systems across NA with few gross sales in atomic number 63 and SA > serves 500 clients, FII equipment operational in over 1500 championship sites; 80% sales in Canada, 15% sales in US, 5% sales outside of NA > demands to be recognized as primary supplier of environmental equipment and products, offers simple, innovative solutions for air and water treatment; wants to be one-stop shop for all filtration needs, offering timely and court-effective solutions Calco group: > 2006, FII purchased by CEG (identifies and acquires environmental companies that were guide suppliers of its particular products) > membership with Calco allowed companies to share resources, networks, and noesis > MLE (groundwater remediation) offers homogeneous products as FII; MLE benefit from sales expertness; FII able to capitalize on MLE unfaltering manufacturing c at a timenter Operations: high heighten on sales/technical knowledge; high routineer-centric outlook; flexibility in meeting needs of fashioner notice to success; unique/comprehensiv e business structure (engineering, manufacturing, and distributing of assorted filtration products and systems > goodness products in inventory for quick sale (filter media, ready-made filtration units), other products ordered from suppliers as essential (keep inventory investments and storage addresss low) > advantageous membership with CEG and strong supplier networks > customized systems †quest after in collaborative design efforts with clients and engineers; once designed, system built by manufacturing alliances thusly installed and supported by FII > offers rental and leasing natural selection; three types interested in this †those who want to test a system earlier purchase, those who need it for a specific time period only, and those who want to finance system through and through regular instalment payments gross sales: > about 65% of revenues from sale of single products; customized products represent 35% of sales Consumers: 2 reason for demand †comp anies pollute preceding(prenominal) regulated level obligated to head off environmental penalties; companies recognize opportunity to relieve money by cleaning/recycle wastewater by reducing garbage disposal costs; demand ranges from short-term, quick-fix to long-term consultation/installation (ongoing monitoring and support) > tend to focus on projects requiring less that 1 million litres/day; able to provide individualise support; larger companies don’t find these projects useful, less competition > customers in 2 equal groups †environmental consulting companies/distributors on behalf of their clients; end users (buy handle from FII) Environmental consultants: > dismember clients’ wastewater treatment needs, recommend solution and help implement it; after assessing need, produce request for RFP from each vendor, use industry expertise to recommend vanquish resource for client End user: > no internal capability, FII identify needs, build custom soluti on to fix problem (incorporating restrictions); if commodity products much more price exquisite choose vendor with lowest price, for custom products price less of a irritation and giveing to pay; learn through tradeshows, advertising, word-of-mouth, and industry reputation MBR: new, stricter government regulations meant that company’s existing wastewater treatment designs did not meet new guidelines; set about with decision of whether to expand into MBR market > MBR †new technology for wastewater treatment, allow for water re-use; different application than FII > MBR designed to treat biological wastewater, predict that MBR system entrust be used to add move around osmosis to make water safe for takeout water consumption > Europe leading in development > currently best environmental option; FII would benefit from MBR sales and advanced knowhow/expertise with respect to manufacturing, engineering, building, and financial support new systems Potential Customer base : MBR system would be important performer for FII’s profitability; treating wastewater under(a) 10,000 litres/day means government sycophancy to pass building code > examen costs (one time) $200,000; over that volume company only needs certificate of approval available at no cost as customer would pay tap based on percentage of system cost > FII fearful of competition, FII need to target and seek out contracts that would be profitable but not attractive to large competitors MBR competition: > Sanitherm (subsidiary of Peak energy operate based in western Canada and direct competition with FII, provides turnkey solutions, built, installed and operate various products/systems, ingest 3% of MBR market, sold water and wastewater treatment systems globally) > Enviroquip (division of Eimco Water Technologies, hold 30% of MBR market share in NA, operates in Texas, delimitates in design and manufacturing, offers ripe range of equipment for water pollution control, advanced wa ste treatment, water treatment and slant-eye handling) Potential Expansion: reputation with MBR will take a while to build, expect sales to be minimal to scratch line but will grow; sales could reach a high of $500,000 (before installation) in 1st year, reaching several million in following years > extra revenues (half of each system) for installation remunerative at beginning with allowance of 90 days COGS > MBR cost average of 35% f system sale (20% for membrane and 80% for fabrication) > membrane purchase from supplier (SGR AQUIRIS in Europe), minimum start-up membrane inventory of $25,000 on hand and had to pay cash upon admit > fabrication components bought from member of Calco, extended assurance damage and alwys paid in 60 day, transportation paid for by FII and cost 5% of COGS Other Expenses: need to rent technology expert ($48,000), and support psyche ($38,000) > dragsevich and other managers have to co-ordinate with suppliers and customers to monitor new business i n terms of R&D; 20% of time spent on MBRs ($30,000) > more space needed for inventory and personnel, operates in facility that allows for lease of additional adjoining units for expansion; $2,250/month/unit; public-service corporation $180/month > important to scar itself properly to gain recognition as reliable supplier of MBR business; aforethought(ip) an additional $6,400 annually MBR marketing > need to purchase software modelling program for $18,000, beneficial for 3 years and amortized utilise straight-line with zero salvage value > paid for advertising, attends tradeshows, provided articles; 25% of costs would directly tinct to new MBR business; plan to read to various publications, advertise and attend tradeshows that specialize in MBR; if sales reached 1 million would need to hire s MBR sales manager ($70,000) Conclusion: is it right time to get into MBR? Wise investment? sales projection may be overly optimistic and it could vary highly depending on ability t o brand itself\r\n'