Evaluation of the Dehumidifier Market Report

Executive Summary

Dehumidifiers are some of the most commonly used household appliances. They are used for the purposes of reducing the levels of humidity in the air. Ideal levels of humidity range between 30 and 50 percent. At this level, the growth of microbes and other disease vectors is inhibited. The appliances are of great importance since they help the population deal with a number of health issues.

The use of the appliances has become popular over the years following the realisation of the benefits associated with them. Statistics have shown that in countries like Korea, the sales of the appliances rose from 40,000 to 1.5 million units between 2009 and 2013.

In addition, Samsung recorded a 631 percent increase in sales between May and January 2013. In light of this, it is apparent that the dehumidifier market has a significant potential for a company wishing to invest in new areas.

Introduction

Companies need to regularly evaluate their markets to determine their success. A company may also seek to enter new markets in order to support growth. Such a business requires information touching on the new market in order to make an informed decision (Esslinger 2009). For example, it is important to gather information on the customer needs. Data about other businesses operating in the market should also be sought.

It is important to study the nature of the existing regulations to better understand possible barriers to entry. Companies seeking to enter new markets have to make a number of considerations prior to making any investments.

To begin with, the market must be viable and able to achieve higher returns compared to other possible opportunities. The new market should also be easy to enter. As such, the company should encounter minimum constraints as it seeks to invest capital into the new opportunity.

Before selecting the preferred opportunity, the management team must discuss and review a number proposed opportunities. The most promising venture is then selected. In most cases, the board of directors is involved in the evaluation process (Hague 2003). Usually, a project manager is then appointed to help the company further explore the market opportunity and determine its feasibility.

The project manager is required to evaluate the new market. Following the assessment, the project administrator makes recommendations to the board. They may propose for the company to enter into the new market or abandon the venture.

In cases where it is recommended that the opportunity presented by the new market be exploited, the project manager needs to present to the board what actions need to be taken in order to enter into the new frontier. As such, they must come up with an action plan that is to be implemented.

Timescales need to be clearly stated in order to help the board determine the implications that the implementation will have on their business. An execution proposal is also required to guide the implementation of the project (Kelley & Littman 2001).

The current paper entails an evaluation, action plan, and execution proposal for a refrigeration appliances manufacturing company wishing to enter into the dehumidifier market. The company has identified the need to expand its activities. After careful considerations, the dehumidifier market was identified as a potentially good opportunity for the company (Chakravarthy & Krishnamoorthi 2013).

As the manager appointed to spearhead the evaluation, planning, and execution of the market entry process, the author of this report is required to assess the venture and recommend to the board of directors the next course of action. If entry is recommended, the author will provide an action plan and a proposal for the execution of the project.

An Evaluation of the Dehumidifier Market

Dehumidifiers are mostly used in homes. However, they can also be used in an industrial setting, especially in climatic chambers. The appliance is used to reduce humidity. It works by extracting moisture from the atmosphere, which is then collected as water and later discarded once it has reached the maximum level.

The water collected from the appliance is not suitable for drinking since it has a large population of contaminants. Other dehumidifiers expel the water in form of vapour. As a result, the user is not required to manually discard the water that is extracted.

There are a number of companies that manufacture the appliances across the world today (Warmefjord 2011). Most of the entities that produce refrigerators are also involved in the manufacture of dehumidifiers. They include LG, Samsung, and Ramtons. The main reason behind this is that the appliance operates almost on the same principles as the refrigerator.

The company analysed in this report chose to venture into the dehumidifier market. The decision was arrived at following consultations made by the members of the board of directors. It was clear to the board that the dehumidifier market will provide the business with enhanced opportunities to make profits (Stelzner 2011).

Being a common household appliance, most individuals purchase this product. As a result, there is high demand for the appliance in the market.

The gadgets also have a simple design that makes it easy to manufacture them. They are also small in size. As such, less material is required to build them. Dehumidifiers are also portable. As a result, they are easily installed in homes, offices, and manufacturing plants (Tomovic 2009).

Their energy efficiency greatly depends on the technology used to assemble them. The efficacy of a humidifier is determined by the amount of moisture it can extract in a day. The water collected is usually measured in form of pints. Dehumidifiers with high ranges of functionalities are mostly preferred.

The need for the appliance is mostly informed by health and comfort concerns among the buyers (Norman 2012). By reducing the amount of moisture present in the surroundings, musty odour, which is usually associated with dampness, is eliminated. Most people find high humidity to be a major cause of discomfort. The situation is worsened during hot seasons when the body attempts to cool itself through perspiration.

Since the air is already saturated, it cannot take up any more moisture. As a result, the sweat remains on the body surface. Individuals become extremely uncomfortable since their bodies are unable to lose heat.

Dehumidifiers improve the quality of life by stabilising the quality of air in the surroundings. Being a luxurious item, most customers are not concerned with the price attached to the appliance. On the contrary, they focus more on the quality of service that they experience from it.

A company wishing to enter into this market must carefully evaluate the quality of the appliances that it can produce. However, it is important to note that the dehumidifier is not a preserve of the wealthy in the society (Haines 2009). Most middle class families also purchase this item.

In developed countries, the appliances are common in most households. To effectively serve the needs of the various market segments, it is paramount to produce dehumidifiers of varying quality and prices.

Dehumidifiers have also been found to help ease the people’s way of life. With the use of the appliance, laundry can dry at a faster rate since the air in the surrounding is not saturated with moisture. Through the use of the dehumidifier, foodstuffs, such as cereals, can be better preserved through drying.

The absence of excessive moisture ensures that the growth of pathogenic microbes, such as moulds and aflatoxin, is prevented. The ideal level of moisture in the atmosphere is usually below 50 percent. Preferably, relative humidity should range between 30 and 50 percent. In case of lower temperatures, the air is said to be dry (Haines 2009).

Dehumidifiers are commonly used for health reasons. As stated earlier, the accumulation of moisture in the atmosphere causes leads to musty odours. The dumpiness resulting from the moisture supports the growth of pathogens. Bacteria flourish in such environments, predisposing the population to a wide range of diseases.

As a result, health practitioners, especially those specialising in respiratory problems, encourage their clients to purchase the appliance. High humidity also leads to the growth of mould, which is a major cause of food poisoning today. Health practitioners have also discovered that body moisture that remains on the skin following perspiration as a result of high humidity may lead to loss of sleep.

High humidity has also been found to encourage the growth of woodlice, cloth moths, dust mites, cockroaches, and fleas. The organisms are vectors for most microbial diseases. The realisation by the members of the community that the appliance will not only improve their quality of life, but also help promote their health, has helped expand the humidifier market across the globe (Kalb 1992).

As stated above, the importance of the dehumidifiers cannot be underestimated. As a result, the demand for these appliances has increased over the years. The sales of dehumidifiers have also gone up over the past few decades. In Korea, the sales of these gadgets have grown from 40,000 units in 2009 to 1.5 million in 2013.

Samsung, one of the world’s leading manufacturers of dehumidifiers, reported a 631 percent growth in the sales of the appliances in the period between January and May 2013 (Funk 2014). The statistics serves as evidence that the market is viable for the company reviewed in this report.

Many companies are moving in to exploit the opportunities available in this market. The organisation should not be left out in this quest. As the population becomes more aware of the reasons necessitating the purchase of the appliances, the demand is likely to go even higher (Nassar & Lupien 2004). The company should be effectively positioned to exploit the opportunity in the coming fiscal year.

Action Plan with Timescales

Following an evaluation of the dehumidifier market, the project manager recommended to the board of directors for the company to enter into the new segment. The various departments involved in the project were notified in order to ensure that the adoption process goes on smoothly (Chakravarthy & Krishnamoorthi 2013). As the manager, I requested for a team of four individuals who would help in the formulation of the action plan.

The team is to be comprised of individuals from various departments in the company. More specifically, the team members will be drawn from the finance, human resource, production, and sales departments. The four are specialists in their various fields and have in the past participated in similar projects implemented by the company. Each of the members is expected to represent the interests of their department.

Prior to making key decisions, the heads of the departments will be consulted in order to ensure that the project succeeds (Chakravarthy 2001). One of the major reasons why the team members were selected from the various departments is to ease the process of lobbying the sections to support the decisions of the team.

As the project manager, I will be required to coordinate all the activities of the team and report to the board of directors on the progress achieved.

In order realise the goals set for the project in venturing into the dehumidifier market, the team will be required to come up with an action plan. The plan will be composed of the steps that are to be followed to achieve the set objectives (Chary 2009).

In the plan, all the resources required for the successful completion of the project are clarified. As such, it will serve as the blueprint to be followed by the project manager. The main goal of the project will also be broken down into smaller and better manageable milestones. The milestones are to be evaluated using SMART (Specific, Measurable, Attainable, Realistic, and Time based) guidelines.

Timelines to be adhered to are also to be realistic and attainable in the event that all goes well for the team as planned (Trott 2008). All the team members are required to do their best to ensure that the timelines are met.

The action plan for the company’s entry into the dehumidifier market will be broken down into five major parts. The sections involve initiation, planning, execution, control, and closure. The tasks are to be carried out in this specific order to ensure that activities are executed in a systematic manner.

Execution Proposal

As stated earlier, initiation is the first step of the project. During the initiation process, the proposed venture will be evaluated once more and additional recommendations made. The project charter will then be developed. The charter will entail all the stakeholders involved in the realisation of the plan. In this case, the stakeholders will be the company’s shareholders, the board, the competitors, and the customers (Stratten 2012).

The needs and possible concerns of each and every group of stakeholders will be evaluated. The project charter will then be submitted to the board for further assessment.

Once the board has evaluated it, the members may decide to go ahead and endorse the plan or oppose it. In this case, the project manager will present a strong case to the board prompting the approval of the charter. The team will then embark on the second phase of the project, which is planning.

Once the project has been endorsed, it will be up to the project manager to start planning for its implementation. The first step will be to formulate a scope statement. During planning, the project manager will work in collaboration with the heads of departments in order to help them provide a specialist who has worked in similar projects before (Thompson 2007).

Consultations with the heads of departments will also ensure that the team members are exempted from their every day jobs and responsibilities in the company until the project is completed. The project team will then hold a kick-off meeting (Benyus 2009).

In the meeting, the project plan will be developed and discussed. The plan is to be in line with the objectives of the project. Timelines will also be specified in order to ensure that the team remains objectives.

The proposal will then be passed on to the departments involved in the implementation of the project. The departments are finance, human resource, production, and sales. The purpose for this is to make the plan as realistic as possible (Steffen 2008). The heads of department will be expected to give their concerns regarding the plan and suggest changes where needed.

The final stage of planning will involve submission of the plan to the board of directors. Since they mark the authority of the company, they will approve the plan. They may also decide to suggest changes to the project team. Once the plan has been approved, the venture will progress to the next stage, which involves execution.

At the start of the execution process, a meeting will be convened. Here, team members will get an opportunity to discuss what they expect to encounter. Based on the plan, an estimated budget will have been prepared. The finance department will be required to release the necessary funds in order for the project to kick off. The team will then start the procurement process (Papanek 1992).

Other companies that deal with the installation of dehumidifier manufacturing plants will be invited for the tendering process. The suppliers of the building materials will also be expected to tender their offers to the project team. Since professionals dealing with the production of dehumidifiers will also be required, the project team is requires to identify firms offering such services (Poli 2001).

The offers will then be examined to identify which firms will offer goods and services in the most cost effective and convenient manner. After the procurement process is over, the installation of the necessary structures will commence. It is expected that the finance department will provide all the necessary funding in order to ensure the success of the project.

The human resource department will also be expected to provide the team with a professional workforce whenever need arose (Ferrara 2012). The department will also be required to train workers on how to manufacture dehumidifiers. Training of the existing workforce is considered to be more beneficial to the company since it will be able to retain its already existing workforce.

Hiring of new workers is also expensive to the company (Mayo 2010). Production will then kick off shortly afterwards. At the beginning, it will be done on a small-scale basis. The company can then gradually increase on its level of production.

The amount of units manufactured within a given duration of time will depend on the ability of the marketing department to ensure that those that are produced are adequately distributed and promoted.

As such, close collaboration will be required between the production and the marketing department while making decisions on the level of production (Roberts 2011). Once the implementation of the project has kicked off, the team will proceed to the next stage which is control.

Once the project has become operational, it is important that the team carries out a number of activities aimed at improving on the efficiency of production (Benyus 2009). It is important to note that the entry into the new market involves a great deal of changes for the company. As such, a lot of capital will be required in order for the dehumidifier sector to be fully operational. A lot of costs will also be incurred (Simmons 2002).

Good management is therefore paramount. For the new venture to be of economic value, the revenues generated must exceed the costs. It is important for the project team to therefore track revenues and costs (Fuad-Luke 2009). The evaluation will be done by the finance department and report tabled to the board of directors as an indication of the company’s progress.

The members of staff who are working in the new sector will also be monitored closely to ensure that they are in a position to steer production in the right direction. Once the product is already in the market, it will be important to monitor the response of customers to the introduction of the new dehumidifiers.

The main purpose of the monitoring of the customer service issues will be to ensure that the product fully satisfies the needs of the customers (Tavares, Cardoso & Dias 2010). The team will then be required to hold the project status meeting with the main aim being to brief the board on the progress that has been achieved.

The team will also be required to monitor the progress of the new sector and identify potential risk areas. Mitigation measures will therefore need to be put in place. Once the project is running smoothly, the final stage of the execution process, closure will start.

During closure, it will be important for the project team to conduct an audit. The project manager will be required to work in collaboration with the head of the finance department in order to ensure that an auditor is availed to the project team (Usero & Fernandez 2009). The team will also be required to document all the progress that has been achieved during the execution process. Lessons learn are also to be documented.

The documentation process will help the company achieve sustainability in the new sector since all the strengths and weaknesses of the company in regard to the new sector will be known. Documentation also allows for future reference. It is believed that documents are also an important decision making tool. The records will be constantly updated as new information surfaces.

The project will by then have gained formal acceptance within all departments in the company (Tomovic 2009). The board of directors will also have formally identified the newly created sector as one of its divisions. Funding for the maintenance of the dehumidifier manufacturing will therefore be often allocated.

As such, the manufacture of the dehumidifiers will be given special attention just like that of refrigeration appliances. All records are also to be stored safely in the company’s achieves to ensure that they are safe and can be easily retrieved in case they are needed in future.

A timescale will also be included in the project plan to ensure that a specific schedule is adhered to (Tomovic 2009). The timescale will also be an indication of the progress that has been achieved. It will also form a basis for the evaluation of the team’s success (Lefteri 2006). The timescales are not to be changed unless there is when it is considered to be very necessary for the team. The timescale is as follows.

The project is to commence on the 1st of September 2014. The project team will only be required to work within the normal working days, Monday to Friday. The plan will also provide allowances for a few days to prevent the team from lagging behind schedule. The schedule is presented below:

Table 1: Schedule

D Task Name Levelling Delay Duration Start Finish Resources
1 Initiation 0 Days 0 days Mon1/9/14 Mon 1/9/14
2 Evaluation & Recommendations 0 Days 1 day Wen 3/9/14 Wen 3/9/14
3 Develop project charter 0 Days 2 day Thurs 4/9/14 Friday 5/9/14 Project Team
4 Deliverable: Submit Project Charter to the board of directors 0 Days 0.3 days Mon 8/9/14 Mon 8/9/14 Project Team
5 Project Sponsors (The board of directors, through the finance department) Reviews Project Charter 0 Days 1 days Tue 9/9/14 Tue 9/9/14 Sponsor
6 Project Charter Signed/ Approved 0 Days 0.3 days Wen 10/9/14 Wen 10/9/14 Sponsor
7 Planning 0 Days 1 day Thurs 11/9/14 Thurs 11/9/14 Project Team
8 Creating Scope Statement 0 Days 1 day Friday 12/9/14 Friday 12/9/14 Project Team
9 Determining Project Team 0 Days 1 day Mon 15/9/14 Mon 15/9/14 Project Manager
10 Project Team Kickoff Meeting 0 Days 1 day Thurs 18/9/14 Thurs 18/9/14 Project Team
11 Develop Project Plan 0 Days 1 day Friday 19/9/14 Friday 19/9/14 Project Team
12 Subject Project Plan to Evaluation 0 Days 1 day Fri 20/9/14 Fri 20/9/14 Project Team
13 Project Plan Approved 0 Days 0.3 days Tue 23/9/14 Tue 23/9/14 Project Team
14 Execution 0 Days 0 days Tue 23/9/14 Tue 23/9/14
15 Project Kickoff Meeting 0 Days 1 day Thurs 25/9/14 Thurs 25/9/14 Project Team
16 Initiate the Procurement process. 0 Days 3 weeks Mon 29/9/14 Friday 17/10/14 Project Team
17 Making Installations 0 Days 5 Months Mon 20/10/14 Friday 20/3/15
18 Training Staff 0 Days 2 weeks Mon 23/3/15 Fri 3/4/15 Project Team
19 Funding from the Finance Department 0 Days 0.3 days Mon 6/4/15 Mon 6/4/15 Project Team
20 Production of Dehumidifiers commences 0 Days 0.1 days Mon 6/4/15 Mon 6/4/15 Project Team
21 Distribution of the Dehumidifiers 0 Days 0.05 days Mon 6/4/15 Mon 6/4/15
22 Commencement of Product Promotion of the Dehumidifiers 0 Days 0.05 days Mon 6/4/15 Mon 6/4/15
23 Control 0 Days 0 days Mon 13/4/15 Mon 13/4/15
24 Project Management 0 Days 0 days Mon 13/4/15 Mon 13/4/15 Project Manager
25 Revenue & Cost Tracking 0 Days 2 days Wen 15/4/15 Thurs 16/4/15 Project Team
26 Staff Monitoring 0 Days 2 days Mon 20/4/15 Tue 21/4/15 Project Team
27 Customer Services & Issues 0 Days 1 day Wen 22/4/15 Wen 22/4/15 Project Team
28 Project Status Meeting 0 Days 1 day Fri 24/4/15 Fri 24/4/15 Project Team
29 Risk Management 0 Days 2 days Mon 27/4/15 Tue 28/4/15 Project Team
30 Monitoring and Mitigation Measures 0 Days 0.05 days Wen 29/4/15 Wen 29/4/15 Project Team
31 Closure 0 Days 0.1 days Wen 29/4/15 Wen 29/4/15
32 Audit 0 Days 2 days Mon 4/5/15 Tue 5/5/15
33 Document Lessons Learned 0 Days 0.5 days Thurs 7/5/15 Thurs 7/5/15 Project Team
34 Update records and files 0 Days 3 days Mon 11/5/15 Wen 13/5/15 Project Team
35 Gain Formal Acceptance 0 Days 2 days Thurs 14/5/15 Friday 15/5/15
36 Record and Store Data Safely 0 Days 1 day Mon 18/5/15 Mon 18/5/15 Project Team

Production

Production refers to the process in which various inputs, both material and immaterial, are handled to come up with the desired output. Production can also refer to economic means through which human wants are satisfied resulting from the consumption of the commodities produced (Chary 2009). In this case, the dehumidifiers produced should have the ability to improve the well being of the customers.

As such, the company should put in place measures to improve on the efficiency of the appliance. However, it should consider the current regulations touching on the manufacture of such appliances (Kelley & Littman 2006). Rules set aside by regulatory agencies should also be adhered to.

Since dehumidifiers use refrigeration gas, their manufacture is regulated by organisations that seek to reduce the emission of greenhouse gasses. Carbon Disclosure Project (CDP) is a multi trillion organisation that seeks to expose the levels of greenhouse emissions emanating from some of the world’s largest corporate.

The aim of the organisation is to ensure that corporate are socially responsible and adhere to environmental conservation calls (Zheng & Possel-Dolken 2002).

In order for the company to succeed in the new market, corporate social responsibility is of great importance (Salkeld 2011). There are five CDP programs, investor CDP, CDP public procurement, CDP water disclosure, CDP supply chain, and CDP cities. Investor CDP helps investors move to economies with lower carbon emission.

The company wishing to enter the dehumidifier market must be viewed to be environmental friendly to be allowed to expand its operations in foreign jurisdictions (Kalb 1992). Based on CDP public procurement program, governments are able to identify corporate that are not environmental friendly. It will therefore be in the best interest of the company to abide to the set regulations.

CDP water disclosure encourages corporate to use water in a manner that is sustainable. Dehumidifiers are used to extract water from the atmosphere. The water must then be discarded after the collecting container has been filled up. The water should be disposed in a responsible manner to prevent pollution. CDP supply chain advocates for collective purchasing to reduce wastage of power and resources (Yim 2007).

The company wishing to enter the dehumidifier market can use these avenues to obtain inputs and distribute outputs in a cost effective and environmental friendly manner. The CDP cities program help provide data about emissions in major urban areas in a standardised manner (Brown & Katz 2009).

Cities with higher emissions discourage the entry into markets associated with high emissions. The information is vital for a company seeking to enter the dehumidifier market since it is associated with the emission of high levels of greenhouse gasses (Bellgran & Safsten 2010).

Product Realisation in the Market

Product realisation refers to the attainment of the product that is sought by a business. The term is also used to refer to the process that a firm needs to undergo in order to produce their final product. For the case of the company, product realisation will be the successful manufacture of the dehumidifier appliances (Poli 2001).

For the company to successfully achieve their set goal, manufacture of the dehumidifiers, they must first adequately prepare for it. The company must first evaluate the market that they wish to enter (Chakravarthy 2001). Evaluation of the market helps a business to have a clear understanding of the market and its aspects, such as customer characteristics, competitors, and the nature of the market.

It is also important to formulate an action plan in order to ensure that the working of the team is systematic (Demeyer, Pich & Loch 2013). Timelines must also be indicated in order to guide the process. In most cases, proposals are also prepared in order to give the stakeholders a clear picture of the work that is ahead of them (McDonough & Braungart 2002).

Post Market Launch Checks

Post market launch checks are carried out by any given company to check the relevance, attractiveness and the awareness of its brand soon after its launch (Hague 2003). A number of factors affect the position of a given commodity in the market. One of these issues entails the offer. In this case, the success of the company is anchored on a number of elements. The elements include, among others, value for money.

Line extensions, re-launches and new developments are some of the major ways that need to be used to improve and consolidate position of the product in the market (Brownell 2010). Reliable and authenticated information about the product market and the new status of the launched brand, including that of the most active competitors are early indicators for a very strategic market planning (Demeyer et al. 2013).

The company should focus on the quality of the products. The company needs to apply three main post launch market research instruments to ascertain some of the most important market data (Trott 2005). The three instruments include product quick check, product performance tracking and brand trend monitor (Phillips 2011).

For an effective and quick clarification of product success, just before the company’s panel data can successfully determine whether or not the product launch is going well, the product quick check procedure gives the company clarity about its product attractiveness and its potential reservations in the market (Stelzner 2011).

The company should also use the product performance tracking instrument to aid in understanding some of the major changes in the active market and also in giving the company an idea on the best ways to manage product launch or re-launch process (Funk 2014).

Finally, the organisation should keep track of the major developments of its product with regards to awareness among target customers. It is necessary for the company to realise that this approach gives clarity on how the attractiveness of its product is developing (Stratten 2012).

Conclusion

Dehumidifiers are common household devices. They are used to reduce the levels of humidity in the atmosphere. Following an evaluation carried out by the project manager, it is clear that the dehumidifier market is viable, especially for companies that deal in refrigeration appliances. Dehumidifiers and refrigerators are similar given that they both use the cooling effect to perform their functions.

A company manufacturing refrigeration appliances is well suited for the production of dehumidifiers. However, the management should plan adequately before entering into the new market. They should also formulate an action plan with timelines to be followed. A proposal to act as the blueprint for the real project is also required.

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