Rachel McCormack: Avionics and White Goods

What I am understanding from this pod cast is that Rachel McCormick, president of Micromax would like to expand their business into avionics and white goods. Most of their work so far has been in the automotive industry creating a software program that does testing for things like breaks. Mike, who is the Ceo has background in avionics so it seems reasonable to head in that direction. This sounds like a great opportunity but the challenge is that if a person's washing machine is not working there isn't the urgency to get it fixed, unlike getting breaks on a car fixed. My thought is to build the warranty into the cost of the dishwasher so that they use the service. The appliance company pays Micromax for the warranty and they in turn build it into their cost. I'm just a student in an entrepreneur class so I am interested in hearing if this is a good idea. Thanks Cheryl

I think that the expansion is a great idea especially since the CEO, Mike, has experience in that field. What I found to be the most interesting is that Rachel mentioned that the automotive industry has its limits and although they have been successful with this industry, they are looking to go beyond it. I think that this is a good related diversification strategy because they are using what they already know and there are similarities between the two industries and the technologies involved. MicroMax does need to evaluate all the risks associated with this venture because seeing profits could be a slow go.

Hello: Please disregard my first post. I think that the expansion of MicroMax into avionics and white goods is a good idea. The company has a global customer base already when it comes to testing automotive parts. The company may take a loss in the white goods area since the owner or president of the company is not really sure how MicroMax can really fit into that industry. In addition, I feel that MicroMax has a great opportunity when it comes to the white goods market because every appliance is becoming high-tech that more and more testing will need to be done on these products to make sure that the products are safe enough to be put into people homes. Furthermore, Rachel made the comment that many people are not in a hurry to get their washing machine fixed when it break as oppose to the breaks on their car. I would have to disagree with that statement because with gas prices on the rise many people would be quicker to pay for their washing machine to get fixed than having to drive to the Laundromat, pay to wash their clothes, and then have to drive back home would be a waste of gas and money. Then the opportunity that the company is thinking about taking into avionics is great since the CEO of the company, Mike, started his career in avionics. The company will be able to analysis the market more thoroughly to see what are its strengths, weaknesses, opportunities, and threats. I believe that Rachel or Mike should develop a separate business plan for each expansion and this way they will be able to see whether the expansion into either industry will be profitable or not. Also, Rachel and Mike could look at it from a standpoint of trying to go into a global market. For instance, the company already exist but Mike and Rachel would like for the company to enter into two new industries; one where the company has a chance because of the knowledge that Mike possess about that industry already and the other industry is where either one of them are sure the company has a place or future. I would suggest that they try going into both industries for a year and see how things pan out. However, either way the company go with the expansion it will cost them. Tyresse Ferguson

Hello Rachel, Moving into avionics seems like it could be a smart advancement for your company. Right now MicroMax’s deals with the automotive industry such as creating software programs for them. Now they are looking into moving into avionics and white goods. Avionics is an electronic system that can be used in airplanes, and spacecrafts. White Goods are things such as washing machines and refrigerators. I can understand the problem of not knowing if consumers are going to pay for the washing machine like they would for a breaking system. I have grown up in a single parent house, where money is tight, and one time we did not have a washing machine. While not having one isn’t an emergency but after awhile your hands can only take so much watching. So for me a washing machine is extremely important. So to see if or what people are willing to pay for washing machines you can send out questionnaires and them send it back to you with their answers. With the peoples feed back you can see if you have a good idea or if you need to make some changes. Maybe the people can even give suggestions on the changes. You could also look into doing a focus group. This would be a group of around eight to twelve potential customers. Here they will be able to give you specific issue about the product. You will defiantly want to make sure that you do research and see what other companies are doing in this field. You may even want to look at their financial statements and see how well they are doing. You may also want try doing a feasibility analysis test. This way you can find out if this really will work for your company or not. This can really give you an in-depth look into the business. Thank You, Kelly Darr