1. What industry characteristics and trends will influence the development of the industry over the next five years?
The micro analyzer industry will keep growing as demand increases. With this added growth, there will be pressure to reduce prices to penetrate the market or to gain market share. We can assume that Eurodata and Tanaka will compete for market share more aggressively against Megatronics. This will mean that Megatronics will probably have to fight to defend its share rather than aggressively adopt new marketing techniques. However, even with this battle for share, it will still have to develop new markets to ensure future growth. Such markets are Tropicalia and Paradiso, two emerging third world nations that have a small current demand for micro analyzers, but, if current economic reforms continue, it is expected that the market demand will grow.
However, we can assume that the desire of Tropicalia and Paradiso will be to develop their own manufacturing facilities since that would eliminate many of the tariff problems. Finally, if the next five years are anything like the last five years, we can assume that there will be great technological changes that will impact the way that micro analyzers are currently manufactured and sold.
Worldwide, the markets are growing steadily, but the established markets(first tier) have reached the point where they are competing on price and service and not on product differentiation. This leaves less developed countries, and among those, Tropicalia and Paradiso faced the most aggressive growth, aided by the fact that both governments are promising incentives for foreign investment. None of the three major manufacturers have made any commitment to establishing operations in these countries.
3. What does this mean for production capacity?
If market demand increases, one of two things must happen: Manufacturers must incr
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