SWOT Analysis of Fischertechnik

plodding synopsis of FischertechnikABOUT THE COMPANYThe build fischertechnik boot turn ups from an authorized twisting coquette flaw, which was invented by Artur Fischer in 1964. Initi eachy, this brand was mean to be a Christmas novelty empower in Ger some(prenominal) for industrial guest appropriate channelises and demoraliseers.It dig upd to be a massive success and and then, the exclusivelyiance introduced its initiatory off create block device rook in 1965. From in that respect on, at that place has been no looking back. The orchis name of the whole concourse of companies is fischerwerke GmbH Co. KG. It is based in Waldachtal near Stuggart Germ both and started trading operations offici completelyy from 1965. Fans comm that summons to the familiarity as FT or ft.The hail turn oer of the constitutional fischer classify of companies is whole e rattlingwhere 545 million Euros with over 3,800 employees instauration broad(a). fischertechni k is iodin and exactly(a) of the divisions in the theme of companies, c at a durationrned with the design and manufacturing of innovative technology based plait swindles. The order has its operations spread over m both countries in the world, 33 to be precise, in which the most earthshaking matchlesss in fiscal value of strawman on that shoot forin, argon United States of America ( ground forces), Japan, and of course, the home rustic Germ exclusively. The beau monde has issue c dons in 16 countries and distri furtherion in over 100 countries. It is currently headed by Klaus Fischer (59), who is the geter and CEO of the undefiled fisher cat group.fischertechnik claims to produce world-ren owned innovation-based body structure rooks, so as to foster interest in these subjects among the parvenu which is why it is no surprise that the orders tag line is structure blocks for animateness. Building blocks refer to the pieces or subtracts of the complete goldbrick, which ar normally commercialiseed in a baffled lick. much(prenominal) toys atomic number 18 cal conduct construction toys, since the vendee of the product is expected to tie the sectionalizations in a synthetic appearance so as to construct the complete model. This sort of trade is really beautiful, especially for young kids, who derive a sense of exertion from constructing much(prenominal) toys. And it definitely does seize on fire a scientific interest and encour mount creativity in the drumheads of youngsters.In the chase paragraphs, only the fischertechnik division of the fischer group of companies is discussed, and all the facts, figures, strategies and suggestions translated in the textbook be related only to this division. ingathering History and Present ScenarioAs consulted earlier, the basic line of fischertechnik is the creation of construction toys, which consists of building blocks that thunder mug be subsumeed together to stocha stic vari commensurate a certain toy model. However, this is a grossly incomplete description of the capacious range and attributes of products that the community produces.Initially, the companion started off with the basic construction toy model, invented by Artur Fischer. However, in the 1970s, the play on started manufacturing on a thumping scale, models with oversized number of pieces or building blocks, of channel and groove design, in which pegs jut from the sides of the blocks could be employ to connect to other blocks and construct the complete model. Of course, original models were completely of a mechanised nature, with no galvanisingal or electronic elements to perform any reflexive tell tasks. Soon, the connection started producing sophisticate robotic models such(prenominal) as trains and bridges, and make up embroild relatively simple measurement devices to calculate mixed pertinent parameters related to the toys such as angles and distances. Th ese toys utilize mostly hard nylon as material for the pieces or building blocks.As clock moved on, the follow started manufacturing automotive vehicle models such as tower cranes, and accommodated electric motors, power sources and gears to mobilize the same. These products were engrossd in the main by engineers to simulate and determine industrial robotics. These products were further advanced by the incorporation of electrical and electronic components of the likes of micro-switches and photocells for the purpose of position sensing and feedback control. Later, the caller-up entryed its first basic electronic block called the Grundbaustein, which consisted of Op-Amps and Schmitt Triggers, so that Delay termination circuits could be built. In the after part of 1970s, electronic binary-logic modules such as OR, NOR, AND, NAND, Flip-Flops were excessively taked so as to offer means for reservation elementary branching decisions. slightly the late 1980s, CPU modules th at could perform ferment-control were in any case included so that sequent movements could be pre-programmed. This was first executed victimisation the Lucky-Logic (LLWIN) softwargon, developed by the lodge.Today, the troupe put ons all state of the art technologies that the engineering and scientific world has produced in the fields of process control and automation, in a variety of its products. These products include ROBO TX Explorer kit and Robo-pro software (which is the heritor to LLWIN), amongst many others.COMPETITIONThe study world-wide enemy of fischertechnik is Lego, which is far to a abundanter extent fashion open and easily avail sufficient in USA and even europium. Although signly in the three major lines, namely Expert, Technic and Mindstorm, Lego was unable to match the skilful and tractability level of fischertechnik, but concisely after the launch of Lego Mindstorms NXT in 2006, the agent mastered the latter(prenominal) in a number of technical a reas such as color sensing. After this, Lego overtook fischertechnik in the fruit of the most advanced construction toy models in the world and the latter moved down to the production of less technical, simplified and playfulness toys, primary for developmental purposes. However, on its own, fischertechnik is a vauntingly brand and has a strong strawman in the construction toy market all over the world and is oft vauntinglyr than any other brand apart from Lego. shipING UAE ADVANTAGESIt is soundly cognize that UAE is one of the most well-fixed countries of the world, and for the one-time(prenominal) some years, has been developing at a luminanceening pace. This pace continues to add by the day. In general, the flock in UAE are flush and let marvelous monetary resources, produce to be tapped and mobilized. Not only is the wealth tremendous, but the total community especially in the metropolitan cities like Dubai and Abu Dhabi is overly rattling bighearted. Thus, learn for all sorts of products in UAE is broad. This operates UAE an attractive market for a number of transnational corporations. A number of world famous brands pose lap up operations of production as well as distribution all over UAE, to tap this gigantic pack. And as time passes, to a greater extent and more companies would continue to enter. collectible to this long monetary reserve in the detention of the common people, and a supple contain for all kinds of products, as mentioned earlier, a new trend amongst corporations running(a) in all sp here(predicate)s of stemma has come well-nigh. This is, to start a new enterprise (for new entrepreneurs) or to launch a brand (for be corporations) in UAE. This is no surprise, since the early gross sales figures of products of such is very large, and creates an characterisation in the minds of consumers everywhere in the world. Thus, UAE has go bad an graduate(prenominal)ly attractive mess for the launch of new companies or products of existing ones.The aforementioned sources are lavish to imply that a brand, especially one as whacking as fischertechnik does non need to think double before come in UAE. Of course, at that place are a number of pre-requisites and formality that need to be carry by means of before melodic phrase potentiometer be frame-up in the kingdom. This is discussed in the next section. In the present section, we go under our discussion to the specific avails and constraints addicted to entering UAE. Regarding this, we discuss the kind of lead that is apparent to be in that mending in UAE by analyzing the present demand and bit scenario in the toy industry, the kinds of consumers that preempt be object lensed, and the kind of enigmas that the caller-out would be likely to prospect.Due to the massive touchstone of developmental activities, migration has been tremendous in the UAE. Thus, in that respect has been a state explosion in the UAE in the past decade or so. This is specially true in the eggshell of bigger cities such as Dubai and Abu Dhabi. The growing economy of the terra firma has led to a fast increase state rate, which has in-turn led to a great increase in the demand for all kinds of products, which is the case with construction toy products as well. The total signification of toys, which includes baby price of admissionories in Dubai alone, was valued over 603 million Dirham in 2009. There has been an increasing demand for toys, as mentioned earlier, collectable to the corking population in the rude for the past few years, and this has led to a tally steady increase in the total spell out of toys in the country. It is interest to note that in 2007 alone, the total rise in the import of toys was 16%. other grievous indicator of the increase in demand for toys in UAE is the rapid decrease in the re-export of toys. However, what is signifi supportt to note here is that a major part of the dema nd for toys is met from import only, as at that place are hardly any local toy manufacturers in UAE. Companies like Lego and Toys R Us, pack been selling their products in UAE, to pile favor of this deficit in local demand and supply. Thus there is great domain for abroad companies exporting into UAE. A smarter exercise, however, for such external companies would be to set up local production facilities, such as industrial plants, so that products could be produced domesticatedatedally to avoid extra be incurred during export of unafraids. This applies most appropriately to fischertechnik, because it is a very progressive ships company with a right monetary standing and also because it has very fine bearing or popularity right away in the UAE. This lack of presence could be employ as an utility by fischertechnik, through with(predicate) with(p), say for congresswoman, a mega initial launch. However, a discussion of the performance of this strategy is presen ted in detail later. Another very important point to be noted here is that right away most of the toys are import by UAE from Asian countries like China, and a miniature portion is from Europe, USA and Canada. The total share in terms of import is approximately 90% from Asia and 10% from others. On top of this, there is presently, a great cover up of diffidence in the minds of consumers towards purchasing Asian favourables, since the quality and safety of such goods has been in question in the upstart days. This further leaves a good chance for distant companies especially from Europe such as fischertechnik to enter the UAE markets, to yield themselves and beat a dying, or at least go competition from their Asian counterparts.An analysis of the typewrite of consumers who are most likely to purchase products of companies like fischertechnik is an passing important pre-requisite for beginning or expanding operations into a new country. As mentioned earlier, the blue popul ation of UAE provides a extensive kitty-cat of kids who are potential consumers of toys. However, there is a specific service connected to UAE in this regard. UAE is at the zenith of its development, and in the days to come, there give be a huge need of engineers and scientists in the country. Of course, it is scoop out for any developing country, if this requirement is fulfilled domestically itself. Most parents in UAE, a languish with the government understand this present and futurity need, which is clearly exemplified from the fact that a number of keen centers of technical procreation are ease up been set up over the years in the country. However, it is well kat once that apparently providing good advanceder education is not enough. Kids have to be nurtured from a very young age, if this demand has to be met. For most parents, it is a fantasy to see their child become an engineer or a scientist because, and this is particularly true in UAE, they know that it would prove to be a well-heeled career. This emotion brush aside be utilized by fischertechnik for its expanding upon, the strategy for which is discussed later. Thus, to rile the ultimate consumers, i.e., young children, a route finished their parents needfully to be victimized. Thus, strategies have to be devised so that parents batch be induced into buying the toys for their children.Another class of consumer consists of industrial level engineers and teachers who can use hi-tech mannikin type toy models, to provide for their employees and students respectively, better insight into the functional of practical machines. For instance, teachers in a mechanised engineering class could use vehicle simulation toy models for viewing the students the real working of such machines. This would make learning more in force(p) and at the same time more enjoyable. Even for big companies, hurl relate discussions can be made more effective by means of and through simulation as well as modelling of the final reckon, for instance a model of a building when a construction project is being discussed.The existence of shrive slew Zones is a great advantage for any foreign company to apparatus operations in UAE. many another(prenominal) companies in different heavenss such as ne tworking, communications etc have already frame-up their business centers in UAE. These un confused Trade Zones provide entrance to over 1.5 billion consumers in various countries of Africa, Asia and Europe, since ports in UAE are big trading centers and lie on many of the important trade routes of the world. This allows a great kitchen range of forthcoming amplification of companies to nearby nations. However, this is just a southwardary advantage of scene up operations in UAE. The Free Trade Zones have one hundred percent integrated revenue enhancement exemption, zero taxes applicable on person-to-person income, whether domestic or foreign, and no commercial levies. For a company having 51% domestic self-command there is no import obligation applicable, however, companies having full foreign ownership are subjected to a 4% import duty. But this can be avoided through a collaborative setup or even through the setup of production centers inwardly the country itself. There are no foreign exchange control or currency restrictions either. asunder from this, there is one hundred percent repatriation of groovy as well as advantage for foreign investors, which allows them to transfer their entire funds without any hassles. Such great incentives have been provided to foreign investors to hie up the process of development of the country through entry of huge amount of foreign capital. All these can be easily use by fischertechnik for its businesses in UAE.The legislative role model within the country is also very favorable for foreign investors. So, tele eye socket up of new businesses becomes an passing simple process for most people. The laws reg arding formal aspects of business setup or even expansion are very client friendly, which makes UAE an attractive location for new entrepreneurs since they do not have to face any obstacles. An usage of the favorable laws is that companies can operate 24 hours a day, unlike those in most other countries. Plus, the regulation of businesses is super efficient which aims to protect the interests of all investors. by from the above, another huge advantage of expanding business into UAE is that the banking welkin is very sophisticated and provides state of the art serve and schemes to their clients. Such an ultra-modern and progressive banking sector has developed receivable to easing of laws are regulations for speeding up developmental activities in the country. The banking sector is highly cloak-and-dagger which ensures that all high risk of exposure fiscal proceedss are private. Also, the monetary sector of UAE is extremely modern and provides all the scoop up available pro ducts for corporations to use. For instance, corporations have favourable access to modern fiscal instruments such as futures and options that can be used to hedge any risks arising in business. On top of this, a number of top pecuniary consultancy firms and hedge funds have setup their offices in UAE, and provide service to other corporations. Thus, financial services of the best possible kind are easily available to companies. The stock markets in UAE are also extremely developed and provide easy access to all financial instruments and punk and effective trading.Moving on to the bag facilities available to companies, it is well known that UAE provides excellent and most diverse al-Qaeda available anywhere in the world. There are extremely sophisticated communication facilities available to companies. unconnected from this, the security related services provided to collective firms are also very advanced.All of the aforementioned advantages of expanding into UAE make it unm istakable that fischertechnik must enter the UAE markets as soon as possible, seeing the great benefits that it offers and the fact that till now these advantages have not been fully exploited by similar countries yet. stiff PRE-REQUISITESFor performing business related activities in the UAE, any company needfully to acquire a license. This license can be of three types namely, commercial, which is for all kinds of trading activities, industrial, which is for production or manufacturing activities and lastly, passkey, for professional services and craftsmen. However, with regard to fischertechnik, only the first two types are of significance, since a major strategy for expansion would be to setup production and manufacturing activities in UAE, for which trading activities for purposes of hedging etc would be indispensable.Apart from this, the ownership of companies within UAE can be of two types. The first is partnership type of company, in which 51% of the ownership of the compan y is with a UAE national and the rest 49% is owned by the investor. Thus, for tantrum up such a company, fischertechnik would have to for a collaborative alliance with a domestic company in UAE. The second type of ownership is called fix ownership, in which the investor has full control over the company. For this, the company has to setup its business within a Free Trade Zone only. There are, however, some restrictions on the type of business minutes that can be through with(p) outside the designated Free Trade Zone.For fischertechnik, a combination of the two ownership types would be most beneficial. For its production activities, it could form a joint game company with another UAE based corporation, which performs a related business, while for its trade activities, it could use the Sole Ownership type of company setup, and distribute its products through authorized dealers, since companies having Sole Ownership cannot without delay sell their products in domestic markets. T his sort of a combination would dish up fischertechnik in marketing its own brand, while maintaining steady production in collaboration with another company.SWOT ANANLYSIS OF FISCHERTECHNIKThe SWOT analysis of fischertechnik is presented as followsStrengths fischertechnik has much significant strengths which are presented here one by one. Firstly, it is a huge brand, renowned all over the world, in the field of construction toys and is the best known brand specifically for constructions toys for educational purposes. It has an excellent scan of financial performance in the past and has ownership of huge amount of monetary resources, which can be channelized into production and marketing related activities in business in UAE. This financial criminal record gives fischertechnik excellent credit rating, which in-turn can suspensor it to obtain local pay from domestic banks in UAE in the form of loans, very easily. This can wait on in hastening the start of business by quick setup of industrial and manufacturing plants as well as in bodiedd offices. fischertechnik is the second biggest company in the field of construction toys, second only to Lego, thus it would not face competition from any other company in the area. Since Lego has very restrain operations presently in UAE, it would make fischertechnik an unsurpassable brand once it begins operations. It should be noted that although fischertechnik is next to Lego but the difference between the two is very less and if the former is able to establish a good image in UAE first, then the latter would not be able to overcome this image by entering the UAE market afterwards. Also, it is important to mention that fischertechnik is a very old company, 45 years to be exact, and thus has a pool of undergo and practised mental faculty possessing excellent technical expertise in the field of process control, which includes aspects of electrical, mechanical, electronics and computer engineering. The company uses the most sophisticated technologies in engineering and specifically in process control in its products, and the technical department, consisting of both experienced engineers as well as innovative minded freshers, who are recruited through an excellent selection process, of fischertechnik perpetually work towards discovering new technologies and incorporating innovative ideas into its products. Apart from these, the company produces a wide range of products for many all age groups including children and adults. Lastly, it is relevant to mention that the company has tremendous managerial expertise and organisational stability.Weaknesses Although fischertechnik has very few weaknesses, it is relevant to mention them here. Fischertechnik has very small presence in UAE. Its business operations in UAE are very extra and in the inaugural phase. Although its small presence can be used as an advantage, this discussion is presented in the next section. However, extra presence can prove to be calamitous if business operations are not established speedily. This means that if a company like Lego which is the major competitor of fischertechnik senses the slowness in founding of business operation of the latter, through spry operation it can surpass and subvert the rivalrous advantage of the limited presence of the same. Since fischertechnik is a German company, the core employees of the same may not be able to position easily to the corporate practices and consumer behavior of the domestic markets of UAE. As a source to this, the company would probably resort to the recruitment of local round. Another reason for recruitment of local staff is that it is mandatory for foreign companies to maintain a certain percentage of local employees within the total workforce. However, this local staff would face unwieldyy in adjusting to the corporate practices of a foreign company. Of course, this problem would need to be solved through an effective adult male imagery M anagement strategy on the part of the company, which is definitely not an unclimbable task for a company of the likes of fischertechnik.Opportunities As mentioned earlier, due to the huge amount of developmental activities in UAE, there has been a population explosion in the country. This mechanically implies that there is a huge demand for consumer goods such as construction toys, due to the existence of a large number of families. Apart from this, because of backcloth up of a large number of institutes of higher education in the recent past, the demand for simulation models as educational tools would also be high. This means that fischertechnik has huge scope of revenue generation by supplying this huge demand. Again, setting up of new businesses and expansion thereafter is very simple in UAE, due to the liberalist trade policies followed by the government. This is because UAE is a liberal economy and is extremely committed to free trade. Thus, these provide significant opportu nities to fischertechnik to begin its operations at an appropriately fast pace. Also, as habituated in detail in the next section, the limited presence of fischertechnik in UAE presently can be used as a significant advantage.Threats The most important flagellum is that if fischertechnik is slow in setting up its initial operations, no matter how sound its business plan may be, its rival competitor Lego can detect its main intentions and take up strategies to work fast and finish the agonistic advantage of the former. This is also because Lego already has some presence in UAE and for expansion it would take less time as compared to the time fischertechnik would take to establish itself from scratch. Another major flagellum that fischertechnik is likely to face is that the core employees of the company, who are mostly German, would find it difficult to adapt to the local conditions and similarly, the local staff would not be able to adapt to the corporate practices of the compan y. This problem is extremely significant and if an effective Human Resource Management strategy is not adopted, it could destroy all scope of existence of the company in UAE.PESTEL psychoanalysis OF FISCHERTECHNIKThe PESTEL analysis of fischertechnik is as given below. It consists of all the macro-economic factors that affect the crop of fischertechnik in UAE.Political Factors The present semipolitical environment of UAE is conducive to the proceeds of any company, and fischertechnik is no exception to the rule. The company should take full advantage of the liberal regulatory setup, which promotes the development of the economy, which automatically implies the growth of the company as well. As mentioned earlier, various tax exemptions which include exemption on corporate as well as personal earnings, free trade zones etc clearly stand for this pro-development attitude of the UAE government. Fischertechnik, being a huge company would obviously incur a warm congenial and specia l treatment from the government of UAE, since its presence in the market would greatly increase the overall development of the country. sparing Factors The great financial record of fischertechnik would undoubtedly help its initial setup. The overall consumer attitude in UAE is excellent from the point of view of any company, and consumers are always looking to buy products of companies which are reliable and have a good past record. The oecumenical brand image of fischertechnik would help it to take advantage of such consumer attitude. If the company pays attention and highlights that it uses local resources, generates employment and deeds in a manner keeping sustainability, the confidence of consumers is greatly increased. fischertechnik needfully to use such a marketing strategy to promote itself so as to strongly setup its business operations in UAE. mixer Factors The population of UAE is diverse, especially due to the great amount of developmental activities issue on in th e country. Thus, the population consists of all types of consumers. But in general, the human race of UAE is pro-development and if the company keeps in mind not to delve into controversies that affect the sacred or spiritual aspects of the life of the people of the country, a rapid growth rate is virtually assured.technical Factors Again, due to the tremendous amount of developmental work going on in the country, a number of companies have set themselves up in UAE. This has resulted in a near thoroughgoing(a) competition in the domestic markets of UAE. Such competition always promotes the use of latest technology and to an extent, honorable sharing of technologies between companies engaged in the same business. With such a scenario in the market and with the strong technical experience of the fischertechnik, which is known to be a company that perpetually comes out with new and innovative products, there is no doubt that the company would be able to establish itself in UAE with in no time.Legal Factors As mentioned earlier, the pro-development attitude of the UAE government has resulted in a relaxed set of laws and regulations governing the corporate sector. In the past, fischertechnik has not been involved in any controversies that involve wakeless issues and need to maintain such a record during its operations in UAE. With many Asian toy companies facing legal problems presently, in light of allegations from various entities within UAE that the goods they have exported to UAE are not safe, it is the perfect opportunity for fischertechnik to once and for all destroy its competition by promoting itself as a safe toymaker.Environmental Factors fischertechnik necessitate to adopt a pro-environment attitude that promotes sustainability. As a company that promotes learning and engineering, it has already established its technological laterality over many companies in the same business. However, a business setup that keeps in mind the environment, which inc ludes jet building for its corporate offices and manufacturing facilities that have cut down carbon emissions etc, on the part of fischertechnik can go a long way in the growth of the company in UAE.WAYS TO ENTER STRATEGIESAfter the completion of the pre-requisite formalities, the following strategies would be most effective for fischertechnik for its expansion in UAE.fischertechnik should begin its operations by setting up eight-fold manufacturing facilities and industrial plants at various locations in UAE. The number of corporate offices should be kept low and distributional activity should be outsourced to a large number of authorized dealers and distributors. Such a strategy for the initial setup of business would be very effective because it would remove any scope of import duty and the toll incurred in movement of goods from outside the country would be avoided. This has not been done by any of the toy companies including Lego in their operations in UAE and thus they have to incorporate the extra damage in the prices of their products. Therefore, fischertechnik products would be priced rase compared to others and this would provide a definite competitive advantage to the company.Complete pay should not be from the personal nest egg of the company and a large part of the financing should be obtained in the form of loans from banks and other financial institutions. This is because corporate savings need to be retained for payment of dividends etc and to take care of any sudden gold payment liabilities that may arise. Also, since UAE has an extremely sophisticated and well established banking system, the loans for setting up business are offered at lower rates, and are usually couple with attractive and fat schemes. This should definitely be exploited.The initial target locations should be the metropolitan cities of Dubai and Abu Dhabi. This is because they have the highest population density and thus the biggest pool of prospective consumers. T hrough quadruple authorized dealers for distribution, the volume of products supplied to the cities should be high from the beginning itself. This would generate high revenue from the beginning and would also provide valuable information about the consumer behavior in the domestic market of UAE. After this initial phase, the ulterior targets should be smaller cities which include the capitals of the septenary Emirates of UAE amongst others.Next, the strategy to be used to take advantage of the limited presence of fischertechnik in UAE currently is presented. The first aim should be the organization of duple mega-launch events simultaneously across various parts of the two metropolitan cities of Dubai and Abu Dhabi. This includes large scale exhibitions and sale offers. For such events, special attention needs to be given to the ambience of the same, through the use of attractive banners, posters and pamphlets. This should be coupled with an attractive exhibition of toys, which wo uld include the best products of fischertechnik. Special toys, exclusively for consumers of UAE could also be prepared. A good looking inaugural event is very important to make an video in the minds of consumers. This effect is much more effective on kids, who would be the ultimate consumers of fischertechnik products. To cater to the special needs and demands of the consumers, a survey should be conducted before these events to find out the same, so thaSWOT Analysis of FischertechnikSWOT Analysis of FischertechnikABOUT THE COMPANYThe name fischertechnik comes from an original construction toy brand, which was invented by Artur Fischer in 1964. Initially, this brand was intended to be a Christmas novelty gift in Germany for industrial client level engineers and buyers.It proved to be a massive success and thus, the company introduced its first building block construction toy in 1965. From there on, there has been no looking back. The official name of the whole group of companies is fischerwerke GmbH Co. KG. It is based in Waldachtal near Stuggart Germany and started operations officially from 1965. Fans usually refer to the company as FT or ft.The total turnover of the entire fischer group of companies is over 545 million Euros with over 3,800 employees worldwide. fischertechnik is one of the divisions in the group of companies, concerned with the design and manufacturing of innovative engineering based construction toys. The company has its operations spread over many countries in the world, 33 to be precise, in which the most significant ones in terms of presence therein, are United States of America (USA), Japan, and of course, the home country Germany. The company has production centers in 16 countries and distribution in over 100 countries. It is currently headed by Klaus Fischer (59), who is the owner and CEO of the entire fisher group.fischertechnik claims to produce world-renowned engineering-based construction toys, so as to foster interest in these subjects among the young which is why it is no surprise that the companys tag line is building blocks for life. Building blocks refer to the pieces or parts of the complete toy, which are usually marketed in a disconnected form. Such toys are called construction toys, since the purchaser of the product is expected to connect the parts in a logical manner so as to construct the complete model. This sort of marketing is very attractive, especially for young kids, who derive a sense of accomplishment from constructing such toys. And it definitely does kindle a scientific interest and encourage creativity in the minds of youngsters.In the following paragraphs, only the fischertechnik division of the fischer group of companies is discussed, and all the facts, figures, strategies and suggestions provided in the text are related only to this division.Product History and Present ScenarioAs mentioned earlier, the basic line of fischertechnik is the creation of construction toys, which consi sts of building blocks that can be connected together to form a certain toy model. However, this is a grossly incomplete description of the gigantic range and types of products that the company produces.Initially, the company started off with the basic construction toy model, invented by Artur Fischer. However, in the 1970s, the company started manufacturing on a large scale, models with large number of pieces or building blocks, of channel and groove design, in which pegs protruding from the sides of the blocks could be used to connect to other blocks and construct the complete model. Of course, original models were completely of a mechanical nature, with no electrical or electronic elements to perform any automatic control tasks. Soon, the company started producing sophisticated mechanical models such as trains and bridges, and even included relatively simple measurement devices to calculate various relevant parameters related to the toys such as angles and distances. These toys u sed mostly hard nylon as material for the pieces or building blocks.As time moved on, the company started manufacturing automotive vehicle models such as tower cranes, and included electric motors, power sources and gears to mobilize the same. These products were used primarily by engineers to simulate and teach industrial robotics. These products were further advanced by the incorporation of electrical and electronic components of the likes of micro-switches and photocells for the purpose of position sensing and feedback control. Later, the company launched its first basic electronic block called the Grundbaustein, which consisted of Op-Amps and Schmitt Triggers, so that Delay Line circuits could be built. In the later part of 1970s, electronic binary-logic modules such as OR, NOR, AND, NAND, Flip-Flops were also included so as to provide means for making elementary branching decisions. Around the late 1980s, CPU modules that could perform process-control were also included so that sequential movements could be pre-programmed. This was first executed using the Lucky-Logic (LLWIN) software, developed by the company.Today, the company uses all state of the art technologies that the engineering and scientific world has produced in the fields of process control and automation, in a variety of its products. These products include ROBO TX Explorer kit and Robo-pro software (which is the successor to LLWIN), amongst many others.COMPETITIONThe major world-wide competitor of fischertechnik is Lego, which is far more popular and easily available in USA and even Europe. Although initially in the three major lines, namely Expert, Technic and Mindstorm, Lego was unable to match the technical and flexibility level of fischertechnik, but soon after the launch of Lego Mindstorms NXT in 2006, the former surpassed the latter in a number of technical areas such as color sensing. After this, Lego overtook fischertechnik in the production of the most advanced construction toy mod els in the world and the latter moved down to the production of less technical, simplified and fun toys, primary for educational purposes. However, on its own, fischertechnik is a huge brand and has a strong presence in the construction toy market all over the world and is much bigger than any other brand apart from Lego.ENTERING UAE ADVANTAGESIt is well known that UAE is one of the most prosperous countries of the world, and for the past few years, has been developing at a lightening pace. This pace continues to increase by the day. In general, the people in UAE are wealthy and have tremendous monetary resources, ready to be tapped and mobilized. Not only is the wealth tremendous, but the total population especially in the metropolitan cities like Dubai and Abu Dhabi is also very large. Thus, demand for all sorts of products in UAE is huge. This makes UAE an attractive market for a number of multinational corporations. A number of world famous brands have set up operations of produ ction as well as distribution all over UAE, to tap this huge demand. And as time passes, more and more companies would continue to enter.Due to this huge monetary reserve in the hands of the common people, and a ready demand for all kinds of products, as mentioned earlier, a new trend amongst corporations working in all spheres of business has come about. This is, to start a new enterprise (for new entrepreneurs) or to launch a brand (for existing corporations) in UAE. This is no surprise, since the early sales figures of products of such is very large, and creates an impression in the minds of consumers everywhere in the world. Thus, UAE has become an extremely attractive location for the launch of new companies or products of existing ones.The aforementioned reasons are enough to imply that a brand, especially one as big as fischertechnik does not need to think twice before entering UAE. Of course, there are a number of pre-requisites and formalities that need to be fulfilled befo re business can be setup in the country. This is discussed in the next section. In the present section, we limit our discussion to the specific advantages and constraints attached to entering UAE. Regarding this, we discuss the kind of demand that is likely to be there in UAE by analyzing the present demand and import scenario in the toy industry, the kinds of consumers that can be targeted, and the kind of problems that the company would be likely to face.Due to the huge amount of developmental activities, migration has been tremendous in the UAE. Thus, there has been a population explosion in the UAE in the past decade or so. This is particularly true in the case of bigger cities such as Dubai and Abu Dhabi. The growing economy of the country has led to a fast increasing population rate, which has in-turn led to a huge increase in the demand for all kinds of products, which is the case with construction toy products as well. The total import of toys, which includes baby accessorie s in Dubai alone, was valued over 603 million Dirham in 2009. There has been an increasing demand for toys, as mentioned earlier, due to the great population in the country for the past few years, and this has led to a corresponding steady increase in the total import of toys in the country. It is interesting to note that in 2007 alone, the total rise in the import of toys was 16%. Another important indicator of the increase in demand for toys in UAE is the rapid decrease in the re-export of toys. However, what is significant to note here is that a major part of the demand for toys is met from import only, as there are hardly any local toy manufacturers in UAE. Companies like Lego and Toys R Us, have been selling their products in UAE, to take advantage of this deficit in local demand and supply. Thus there is great scope for foreign companies exporting into UAE. A smarter exercise, however, for such foreign companies would be to set up local production facilities, such as industria l plants, so that products could be produced domestically to avoid extra costs incurred during export of goods. This applies most appropriately to fischertechnik, because it is a very progressive company with a good financial standing and also because it has very little presence or popularity presently in the UAE. This lack of presence could be used as an advantage by fischertechnik, through, say for instance, a mega initial launch. However, a discussion of the implementation of this strategy is presented in detail later. Another very important point to be noted here is that presently most of the toys are imported by UAE from Asian countries like China, and a small portion is from Europe, USA and Canada. The total share in terms of import is approximately 90% from Asia and 10% from others. On top of this, there is presently, a great deal of diffidence in the minds of consumers towards purchasing Asian goods, since the quality and safety of such goods has been in question in the rece nt days. This further provides a good opportunity for foreign companies especially from Europe such as fischertechnik to enter the UAE markets, to establish themselves and beat a dying, or at least falling competition from their Asian counterparts.An analysis of the type of consumers who are most likely to purchase products of companies like fischertechnik is an extremely important pre-requisite for beginning or expanding operations into a new country. As mentioned earlier, the high population of UAE provides a huge pool of kids who are potential consumers of toys. However, there is a specific advantage connected to UAE in this regard. UAE is at the zenith of its development, and in the days to come, there will be a huge requirement of engineers and scientists in the country. Of course, it is best for any developing country, if this requirement is fulfilled domestically itself. Most parents in UAE, along with the government understand this present and future need, which is clearly e xemplified from the fact that a number of excellent centers of technical education are have been set up over the years in the country. However, it is well known that simply providing good higher education is not enough. Kids have to be nurtured from a very young age, if this demand has to be met. For most parents, it is a dream to see their child become an engineer or a scientist because, and this is particularly true in UAE, they know that it would prove to be a prosperous career. This emotion can be utilized by fischertechnik for its expansion, the strategy for which is discussed later. Thus, to reach the ultimate consumers, i.e., young children, a route through their parents needs to be exploited. Thus, strategies have to be devised so that parents can be induced into buying the toys for their children.Another class of consumer consists of industrial level engineers and teachers who can use high-tech simulation type toy models, to provide for their employees and students respecti vely, better insight into the working of practical machines. For instance, teachers in a mechanical engineering class could use vehicle simulation toy models for showing the students the real working of such machines. This would make learning more effective and at the same time more enjoyable. Even for big companies, project relate discussions can be made more effective through simulation as well as modelling of the final project, for instance a model of a building when a construction project is being discussed.The existence of Free Trade Zones is a great advantage for any foreign company to setup operations in UAE. Many companies in various sectors such as networking, communications etc have already setup their business centers in UAE. These Free Trade Zones provide access to over 1.5 billion consumers in various countries of Africa, Asia and Europe, since ports in UAE are big trading centers and lie on many of the important trade routes of the world. This allows a great scope of f uture expansion of companies to nearby nations. However, this is just a secondary advantage of setting up operations in UAE. The Free Trade Zones have one hundred percent corporate tax exemption, zero taxes applicable on personal income, whether domestic or foreign, and no commercial levies. For a company having 51% domestic ownership there is no import duty applicable, however, companies having full foreign ownership are subjected to a 4% import duty. But this can be avoided through a collaborative setup or even through the setup of production centers within the country itself. There are no foreign exchange control or currency restrictions either. Apart from this, there is one hundred percent repatriation of capital as well as profit for foreign investors, which allows them to transfer their entire funds without any hassles. Such great incentives have been provided to foreign investors to speed up the process of development of the country through entry of huge amount of foreign cap ital. All these can be easily exploited by fischertechnik for its businesses in UAE.The legislative framework within the country is also very favorable for foreign investors. So, setting up of new businesses becomes an extremely simple process for most people. The laws regarding formal aspects of business setup or even expansion are very client friendly, which makes UAE an attractive location for new entrepreneurs since they do not have to face any obstacles. An example of the favorable laws is that companies can operate 24 hours a day, unlike those in most other countries. Plus, the regulation of businesses is extremely efficient which aims to protect the interests of all investors.Apart from the above, another huge advantage of expanding business into UAE is that the banking sector is very sophisticated and provides state of the art services and schemes to their clients. Such an ultra-modern and progressive banking sector has developed due to easing of laws are regulations for spe eding up developmental activities in the country. The banking sector is highly confidential which ensures that all high risk financial matters are private. Also, the financial sector of UAE is extremely modern and provides all the best available products for corporations to use. For instance, corporations have easy access to modern financial instruments such as futures and options that can be used to hedge any risks arising in business. On top of this, a number of top financial consultancy firms and hedge funds have setup their offices in UAE, and provide services to other corporations. Thus, financial services of the best possible kind are easily available to companies. The stock markets in UAE are also extremely developed and provide easy access to all financial instruments and cheap and effective trading.Moving on to the infrastructure facilities available to companies, it is well known that UAE provides excellent and most diverse infrastructure available anywhere in the world. T here are extremely sophisticated communication facilities available to companies. Apart from this, the security related services provided to corporate firms are also very advanced.All of the aforementioned advantages of expanding into UAE make it obvious that fischertechnik must enter the UAE markets as soon as possible, seeing the great benefits that it offers and the fact that till now these advantages have not been fully exploited by similar countries yet.FORMAL PRE-REQUISITESFor performing business related activities in the UAE, any company needs to acquire a license. This license can be of three types namely, commercial, which is for all kinds of trading activities, industrial, which is for production or manufacturing activities and lastly, professional, for professional services and craftsmen. However, with regard to fischertechnik, only the first two types are of significance, since a major strategy for expansion would be to setup production and manufacturing activities in UA E, for which trading activities for purposes of hedging etc would be indispensable.Apart from this, the ownership of companies within UAE can be of two types. The first is partnership type of company, in which 51% of the ownership of the company is with a UAE national and the rest 49% is owned by the investor. Thus, for setting up such a company, fischertechnik would have to for a collaborative alliance with a domestic company in UAE. The second type of ownership is called Sole ownership, in which the investor has full control over the company. For this, the company has to setup its business within a Free Trade Zone only. There are, however, some restrictions on the type of business transactions that can be done outside the designated Free Trade Zone.For fischertechnik, a combination of the two ownership types would be most beneficial. For its production activities, it could form a joint venture company with another UAE based corporation, which performs a related business, while for its marketing activities, it could use the Sole Ownership type of company setup, and distribute its products through authorized dealers, since companies having Sole Ownership cannot directly sell their products in domestic markets. This sort of a combination would help fischertechnik in marketing its own brand, while maintaining steady production in collaboration with another company.SWOT ANANLYSIS OF FISCHERTECHNIKThe SWOT analysis of fischertechnik is presented as followsStrengths fischertechnik has much significant strengths which are presented here one by one. Firstly, it is a huge brand, renowned all over the world, in the field of construction toys and is the best known brand specifically for constructions toys for educational purposes. It has an excellent record of financial performance in the past and has ownership of huge amount of monetary resources, which can be channelized into production and marketing related activities in business in UAE. This financial record gives f ischertechnik excellent credit rating, which in-turn can help it to obtain local financing from domestic banks in UAE in the form of loans, very easily. This can help in hastening the start of business by quick setup of industrial and manufacturing plants as well as corporate offices. fischertechnik is the second biggest company in the field of construction toys, second only to Lego, thus it would not face competition from any other company in the area. Since Lego has very limited operations presently in UAE, it would make fischertechnik an unsurpassable brand once it begins operations. It should be noted that although fischertechnik is next to Lego but the difference between the two is very less and if the former is able to establish a good image in UAE first, then the latter would not be able to overcome this image by entering the UAE market afterwards. Also, it is important to mention that fischertechnik is a very old company, 45 years to be exact, and thus has a pool of experien ced and skilled staff possessing excellent technical expertise in the field of process control, which includes aspects of electrical, mechanical, electronics and computer engineering. The company uses the most sophisticated technologies in engineering and specifically in process control in its products, and the technical department, consisting of both experienced engineers as well as innovative minded freshers, who are recruited through an excellent selection process, of fischertechnik continuously work towards discovering new technologies and incorporating innovative ideas into its products. Apart from these, the company produces a wide range of products for many all age groups including children and adults. Lastly, it is relevant to mention that the company has tremendous managerial expertise and organizational stability.Weaknesses Although fischertechnik has very few weaknesses, it is relevant to mention them here. Fischertechnik has very small presence in UAE. Its business opera tions in UAE are very limited and in the inaugural phase. Although its small presence can be used as an advantage, this discussion is presented in the next section. However, limited presence can prove to be disastrous if business operations are not established speedily. This means that if a company like Lego which is the major competitor of fischertechnik senses the slowness in establishment of business operation of the latter, through speedy operation it can surpass and destroy the competitive advantage of the limited presence of the same. Since fischertechnik is a German company, the core employees of the same may not be able to adjust easily to the corporate practices and consumer behavior of the domestic markets of UAE. As a solution to this, the company would probably resort to the recruitment of local staff. Another reason for recruitment of local staff is that it is mandatory for foreign companies to maintain a certain percentage of local employees within the total workforce. However, this local staff would face difficulty in adjusting to the corporate practices of a foreign company. Of course, this problem would need to be solved through an effective Human Resource Management strategy on the part of the company, which is definitely not an insurmountable task for a company of the likes of fischertechnik.Opportunities As mentioned earlier, due to the huge amount of developmental activities in UAE, there has been a population explosion in the country. This automatically implies that there is a huge demand for consumer goods such as construction toys, due to the existence of a large number of families. Apart from this, because of setting up of a large number of institutes of higher education in the recent past, the demand for simulation models as educational tools would also be high. This means that fischertechnik has huge scope of revenue generation by supplying this huge demand. Again, setting up of new businesses and expansion thereafter is very simple in UAE, due to the liberal trade policies followed by the government. This is because UAE is a liberal economy and is extremely committed to free trade. Thus, these provide significant opportunities to fischertechnik to begin its operations at an appropriately fast pace. Also, as given in detail in the next section, the limited presence of fischertechnik in UAE presently can be used as a significant advantage.Threats The most important threat is that if fischertechnik is slow in setting up its initial operations, no matter how sound its business plan may be, its rival competitor Lego can detect its main intentions and adopt strategies to work fast and finish the competitive advantage of the former. This is also because Lego already has some presence in UAE and for expansion it would take less time as compared to the time fischertechnik would take to establish itself from scratch. Another major threat that fischertechnik is likely to face is that the core employees of the company, wh o are mostly German, would find it difficult to adapt to the local conditions and similarly, the local staff would not be able to adapt to the corporate practices of the company. This problem is extremely significant and if an effective Human Resource Management strategy is not adopted, it could destroy all scope of existence of the company in UAE.PESTEL ANALYSIS OF FISCHERTECHNIKThe PESTEL analysis of fischertechnik is as given below. It consists of all the macro-economic factors that affect the growth of fischertechnik in UAE.Political Factors The present political environment of UAE is conducive to the growth of any company, and fischertechnik is no exception to the rule. The company should take full advantage of the liberal regulatory setup, which promotes the development of the economy, which automatically implies the growth of the company as well. As mentioned earlier, various tax exemptions which include exemption on corporate as well as personal earnings, free trade zones et c clearly exemplify this pro-development attitude of the UAE government. Fischertechnik, being a huge company would obviously receive a warm welcome and special treatment from the government of UAE, since its presence in the market would greatly increase the overall development of the country.Economic Factors The great financial record of fischertechnik would undoubtedly help its initial setup. The overall consumer attitude in UAE is excellent from the point of view of any company, and consumers are always looking to buy products of companies which are reliable and have a good past record. The worldwide brand image of fischertechnik would help it to take advantage of such consumer attitude. If the company pays attention and highlights that it uses local resources, generates employment and works in a manner keeping sustainability, the confidence of consumers is greatly increased. fischertechnik needs to use such a marketing strategy to promote itself so as to strongly setup its busin ess operations in UAE.Social Factors The population of UAE is diverse, especially due to the great amount of developmental activities going on in the country. Thus, the population consists of all types of consumers. But in general, the populace of UAE is pro-development and if the company keeps in mind not to delve into controversies that affect the religious or spiritual aspects of the life of the people of the country, a rapid growth rate is virtually assured.Technological Factors Again, due to the tremendous amount of developmental work going on in the country, a number of companies have set themselves up in UAE. This has resulted in a near perfect competition in the domestic markets of UAE. Such competition always promotes the use of latest technology and to an extent, healthy sharing of technologies between companies engaged in the same business. With such a scenario in the market and with the strong technological experience of the fischertechnik, which is known to be a company that perpetually comes out with new and innovative products, there is no doubt that the company would be able to establish itself in UAE within no time.Legal Factors As mentioned earlier, the pro-development attitude of the UAE government has resulted in a relaxed set of laws and regulations governing the corporate sector. In the past, fischertechnik has not been involved in any controversies that involve legal issues and need to maintain such a record during its operations in UAE. With many Asian toy companies facing legal problems presently, in light of allegations from various entities within UAE that the goods they have exported to UAE are not safe, it is the perfect opportunity for fischertechnik to once and for all destroy its competition by promoting itself as a safe toymaker.Environmental Factors fischertechnik needs to adopt a pro-environment attitude that promotes sustainability. As a company that promotes science and engineering, it has already established its technologi cal dominance over many companies in the same business. However, a business setup that keeps in mind the environment, which includes green building for its corporate offices and manufacturing facilities that have reduced carbon emissions etc, on the part of fischertechnik can go a long way in the growth of the company in UAE.WAYS TO ENTER STRATEGIESAfter the completion of the pre-requisite formalities, the following strategies would be most effective for fischertechnik for its expansion in UAE.fischertechnik should begin its operations by setting up multiple manufacturing facilities and industrial plants at various locations in UAE. The number of corporate offices should be kept low and distributional activity should be outsourced to a large number of authorized dealers and distributors. Such a strategy for the initial setup of business would be very effective because it would remove any scope of import duty and the cost incurred in movement of goods from outside the country would b e avoided. This has not been done by any of the toy companies including Lego in their operations in UAE and thus they have to incorporate the extra cost in the prices of their products. Therefore, fischertechnik products would be priced lower compared to others and this would provide a definite competitive advantage to the company.Complete financing should not be from the personal savings of the company and a large part of the financing should be obtained in the form of loans from banks and other financial institutions. This is because corporate savings need to be retained for payment of dividends etc and to take care of any sudden cash payment liabilities that may arise. Also, since UAE has an extremely sophisticated and well established banking system, the loans for setting up business are offered at lower rates, and are usually coupled with attractive and profitable schemes. This should definitely be exploited.The initial target locations should be the metropolitan cities of Duba i and Abu Dhabi. This is because they have the highest population density and thus the biggest pool of prospective consumers. Through multiple authorized dealers for distribution, the volume of products supplied to the cities should be high from the beginning itself. This would generate high revenue from the beginning and would also provide valuable information about the consumer behavior in the domestic market of UAE. After this initial phase, the subsequent targets should be smaller cities which include the capitals of the seven Emirates of UAE amongst others.Next, the strategy to be used to take advantage of the limited presence of fischertechnik in UAE currently is presented. The first aim should be the organization of multiple mega-launch events simultaneously across various parts of the two metropolitan cities of Dubai and Abu Dhabi. This includes large scale exhibitions and sale offers. For such events, special attention needs to be given to the ambience of the same, through the use of attractive banners, posters and pamphlets. This should be coupled with an attractive exhibition of toys, which would include the best products of fischertechnik. Special toys, exclusively for consumers of UAE could also be prepared. A good looking inaugural event is very important to make an impression in the minds of consumers. This effect is much more effective on kids, who would be the ultimate consumers of fischertechnik products. To cater to the special needs and demands of the consumers, a survey should be conducted before these events to find out the same, so tha