LOCATION, LOCATION, LOCATION !

There are many things to consider when starting up a new business – but perhaps the most important of these is location.

For this project, our choice of location has been limited to the developing world, where consumers are living on less than US$2 a day.

Our choice is also limited by our proposed business concept – delivering fresh desalinated water to arid or water scarce regions.

The map taken from the people and planet website (www.peopleandplanet.net) shows (in orange) countries where access to potable drinking is less than 60%. These countries are our target market, as they have the greatest need for our product and service.

The countries in yellow have access to clean water of between 60 and 95%. They are also a potential market.

I propose we target South East Asia for our initial start-up venture. Of these nations, India has captured my interest for several reasons:

1. Size! India is home to 1/6th of the world’s population, and is the largest country in Asia.
2. Geography – India is surrounded water; the Indian Ocean in the south, the Bay of Bengal in the east and the Arabian Sea in the west
3. Unlike much of Asia, India is a democratic nation with an established and robust judicial system based on British law that has existed for two centuries.
4. The country has relaxed trade rules and an interest in foreign investment – although traditionally Indian law has required that control (or at least partial control) of the operation be in the hands of local partners.
5. English is the language of business and higher education in India.

India is also in close proximity to other water scarce areas in South East Asia, such as Cambodia and Laos (see map). It would therefore be possible to move our operation to these countries without too much trouble. Additionally, India is the world’s largest market for ship recycling. Therefore, acquiring a vessel from an Indian shipyard would be easier if we were running our business from India.

Once we have decided on a country of origin, we need to decide on a specific locale within this country. This will require further research. There is a similar project currently operating off the Chennai coastline, with a water capacity of one million litres per day. It would not be sensible to launch our business too close to our competitor.

FIRST MOVER ADVANTAGE & COMPETITIVE ADVANTAGE

First-mover advantage is the advantage gained by the initial occupant of a market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. Sometimes the first mover is not able to capitalise on its advantage, leaving the opportunity for another firm to gain second-mover advantage.

A competitive advantage exists when a firm is able to deliver the same benefits as its competitors, but at a lower cost (cost advantage), OR, deliver benefits that exceed those of competing products (differentiation advantage). So, a competitive advantage allows a firm to create superior value for its customers, and superior profits for itself.

Our business concept must have some sort of competitive advantage over other products in the market. This is especially important in India, as there is already a similar business operating there. We must find a way to better our competitors either in cost or product differentiation, thus securing a second mover advantage in the Indian market. Our experiences may lead us to a first mover advantage in other South East Asian markets where this service has not yet been explored.