Industry Characteristics And Trends Will Influence The Development Of The Industry
• Industry Characteristics A shift towards emerging market production with local manufacturing plants
Many countries are interested in entering the market and encourage the creation of the technology industries.
World Market demand is supposed to double in 6 years.
• How are market growing & production capacity
Markets are starting to grow outside the areas that production typically happens in, and starting to enter resource rich emerging markets. This opens the door for greater production and cheaper prices due to economies of scale. The emerging markets are looking for potential benefits of the industry to improve their own economic well being.
• Role of Transport Costs & Tariffs
The finished products differ …show more content…
How are markets growing, and what does this mean for production capacity? How do costs of production compare across countries for finished products and for subassemblies? What is the role of transport costs and tariffs, and what are the economics of serving each market from different locations? What are the implications of these issues for your negotiating strategy?
• What industry characteristics and trends will influence the development of the industry over the next five years? o There are several major trends that are influencing the development of the microanalyzer market. One major factor is the shift towards emerging market production with local manufacturing plants. These emerging markets are allowing for more player in the market and are beginning to become more interested in foreign direct investment. This is causing many countries to be interested in entering the market and encourage the creation of the technology …show more content…
The United States is expected to see a demand increase by 50 percent and both Europe and Japan are expected to double. This means that production of the product is going to have to increase just as fast to keep up with market demand. The increase in market demand will cause an increase of foreign direct investment from the major competitors in order to keep up with the rapidly growing market.
• How do costs of production compare across countries for finished products and for subassemblies? o The costs of production vary between types of plants.In tropicalia alone, mini plants face the lowest investment cost, yet the highest manufacturing cost per unit. The total investment cost in a mini plant 57 million dollars and employs 850 people, but the total cost per unit is $3875. A Standard plant has a larger investment at 90 million dollars and employs 1,200 people with a cost per unit of $3125. The largest of course is the Maxi plant and has an investment cost of 160 dollars and has many more employees at a total of 2000 and the cost per unit in a maxi plant is only $2525.
• What is the role of transport costs and tariffs, and what are the economics of serving each market from different