Analysis of Canbide - Essay Example

Analysis In order to proceed with the project, Canbide should take into account external and internal economic factors, market situation and competition. Recommendations, based on pure numbers, are not enough because organizations are influenced by a number of factors including economic situation in the region and demographics, inflation and legal changes. The future is uncer­tain and numerous techniques have been evolved to try and limit the amount of uncertainty. Besides recommendations and analysis prepared by a transport management company, Canbide should take into account economic/financial situation in the region.

In the USA, inflation does not have a great impact on economic performance on individual companies but can influence economy of the region and the state. If there is inflation, money performs less efficiently as a standard of deferred payment. Some contracts, however, have cost-escalation clauses allowing the passing on of any increased costs (Frame, 2002). Demand condition is another important factor to consider. The nature of demand conditions for Canbide is important because it determines the rate and nature of improvement and innovation by the firms in the nation.

Three characteristics of demand are particularly impor­tant: the composition of demand, the size and pattern of growth of home demand, rapid home market growth, and the means by which a nations home demand pulls the nations products and services into foreign markets. Canbide is large company operating on the national scale, and for this reason it is crucial to take into account growth patterns and demand. Canbide should take into account industrial growth patterns which provide an insight into market demand.

Because they generally show consumption patterns, production patterns are helpful in assessing market opportunities. Additionally, trends in manufacturing production indicate potential markets for companies that supply manufacturing inputs. Estimating market size with available data presents challenging analytical tasks (Clements, Selvanathan 1996). Besides analysis prepared by the transportation company, Canbide should consider increased competition. Competition is provoked by a combination of spatial and fiscal policies such as regional development agencies, ‘pre-competitive’ infra structural improvements and the cost of real estates.

Also, national economic policies have become geared toward helping internal competition between diverse industrial regions for investment. Technology/research and development are closely connected with competition and ability of Canbide to innovate and expend its facilities. Analysis based on numbers cannot reflect technological changes and increased competition in this region. Even if investment is made, it will not guarantee immediate success and return of investments. Legal/political changes (regulations) can affect the industry in general.

The opportunity of the company is closely connected with legislation and government regulations. Government policies are favorable for companies, like Canbide, creating supportive legal environment to compete. There is no strict regulations which can prevent competition in this market segment. Social/demographic factors will not have a great impact on Canbide, but they can influence composition of demand in this region. Demographically, this region proposes great opportunities for Canbide to sell its products to wide target audience (Russel 2004).

Basing Canbide plans on a combination of forecasting and budgeting systems can only work if the future is going to be the same as the present or the past. Constant attention must be given to changing cir­cumstances and many revisions of plans may be needed. Still, it is important to take into account numbers based analysis, because the location of customers affects either the time needed to deliver products and the need for maintaining local inventories, thus influencing either the cost of transportation - for example relatively expensive shipments by air cargo - or the costs of carrying and financing local inventories.

References 1. Clements, K.W., Selvanathan, A. (1996). Applied Demand Analysis: A Survey. Economic Record. 72 (216), 63. 2. Frame, D.J. (2002). The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities. Jossey-Bass. 3. Russel, Ch. (2004). Best Customers: Demographics of Consumer Demand (Best Customers). New Strategist Publications; 3rd edn.