Market Analysis

Andrews Corporation will take advantage of the hangers In our Industry by Introducing a high-tech product In the future to Increase our overall market share and profit. Market Segmentation Our market Is made up 6 firms with 2 segments: low-tech and high-tech. As of DCE. 31 , 201 5 our current demand for the low-tech segment is 5,544 and the demand for high-tech is 2,592. For the low-tech segment of the market, the customers buying criterion from most important to least important is price, age, reliability and position.

For the high tech segment of the market the customers buying criterion from most important to least important is position, age, price and reliability. Andrews Corporation currently has a total market share of 13. 31%. Our product, Able, currently makes up 14% of the low-tech market and 12% of the high-tech market. Next year, our market share for the low-tech segment should Increase to 15. 4% as well as the high-tech segment to 14. 4%. Our competition consists of 5 firms: Baldwin, Chester, Digit, Erie and Ferris.

Most of the companies are lowering the price of their product to appeal more to the low-tech segment of the market and to obtain more share of the total market. Majority of the companies lowered their reliability to cut back on material cost and to Increase their overall profit. Products and services Able is our current product on the market, which is primarily located in the low-tech segment of the market. It has a performance of 5. 9, a size of 14. 1 and a reliability of 2000.

In year 1, we sold 1,077 units priced at $34. 00 each. We plan to Introduce a new product, Adam, next year that will primarily be targeted at the high-tech segment of the market. Our current product, Able, well be repositioned to appeal to both the high ND low-tech segment of the market. To ensure that Adam will never become outdated, it will continuously undergo R&D. As for our more low-tech product, we will make changes to it when necessary to reduce costs.

Fable’s MATT is currently 2000 and we plan to lower it in the future to appeal more to the low-tech segment of the market, since MATT is least important in the high-tech segment. The Ideal age for the low-tech segment Is 3 years and for the high-tech Is O. If our product moves out of effective. Competitive Comparison Able, our low-tech product has the highest contribution margin at 28% while our interiors are in the 21-27% range. Andrews Corporation also has the second highest Net Margin and Return on Sales.

Our Net Margin is 10. 4% and our Return on Sales is 5. 5%. In comparison to the competition, Able also has the highest productivity rate and have the greatest productivity turnover rate at 10. 02%. Able received a 22 on our customer satisfaction survey, which is the highest score with 21. 5 being the second highest and 19. 1 following that. However, Able has some areas of improvement. We have low profits and sold the least amount of units. Overall, Able s in third place out of four competitors.

To enable Able to become the top product, we need to lower the prices of our products to try to increase the amount of units we can sell to beat out the competition. We need to continually increase the accessibility and market share of our product. The current market consists of both High Tech and Low Tech products and companies are starting to focus placing their product in Just one of these segments. Our goal is to beat out any competitors in the Low Tech market because that is where we plan to place our product.