Filter Innovations - Hbr Case Analysis

3296 Words Feb 11th, 2014 14 Pages
Problem Statement

John Dragasevich is the president of Filter Innovation Inc. (FII), which is a small filtration company. With government restrictions becoming stricter and tighter, Dragasevich is faced with the decision to expand his company and invest in MBR (Membrane Biological Reactors) technology or continue operating his business like he has been doing.

Key Issues

1. The changing of government regulations towards water filtration systems 2. Lose a competitive advantage from not investing in MBR technology 3. Prioritize environmental responsibilities at all times – MBR is best environmental option 4. Primary Business Strategy – Retail vs. Customized Products

Issue 1:

MBR’s are the new emerging technology for
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Issue 2:

Many of FII’s direct competitors (Sanitherm – 3% of MBR market, Enviroquip – 30% of MBR market in NA) have already invested in MBR’s. FII would lose its competitive advantage if they decided to not invest in MBR’s, which, in return, would cost FII customer and brand loyalty.

Dragasevich finds it very important that FII be recognized as being at the forefront of the leading technology. “Its in our name…. Innovation!” Dragasevich said. If FII decided to not invest in MBR technology, Dragasevich would be going against the goals of FII and his own personal goals. FII would also have wasted money by spending 5% of its pre tax earnings

Issue 3:

Dragasevich’s corporate goal, and one that is personal to him, was to prioritize FII’s social and environmental responsibilities at all times, ensuring that FII’s actions positively influence both the community and the environment. MBR’s are the best environmental option available in the water filtration market. If Dragasevich decides to not invest in MBR’s, he would be opposing his personal and corporate goal. If he wants to continue achieving this goal, he is obligated to invest in MBR’s.

Issue 4:

This issue covers the overall focus of the business. FII generated 65% of its revenue from the sale of individual products and generated 35% of revenue from customized systems. FII focuses more on customized products then products sold on the shelf even though it is generating more sales for FII. FII has a
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