Wednesday, June 15, 2011

Market Analysis of Fused Silica

Market Analysis of Fused Silica Used in the Production of  Specialty Optical Fiber: Research Methodology Brief

Demand Curve/Price Curve Interview Process              ElectroniCast Consultants contacts manufacturers of specialty optical fiber, as well as Fused Silica Used in the Production of specialty optical fiber and other organizations knowledgeable of this topic.  We informed our contacts that we do not identified them with the corresponding data, since most (not all) of the contacts stated that the information is highly confidential (the quantities and the prices they pay for the fused silica). 

This market research process involved information-gathering interviews.  Not all of companies on our list were cooperative. Interviews/contacts are conducted via telephone and/or e-mail.

            Based on primary research efforts, we present price-oriented demand curve data tables, as a result of sufficient inputs from ten (10) producers of specialty optical fiber.  For pricing comparison, we referred to the fused silica from a selected producer of fused silica used for specialty optical fiber fabrication.

Some of the companies requested specific product specifications for comparison; therefore, we referred them to a specific fused silica product.

A few individuals asked for more clarification, so we referred them to specific technology.  Either way, we believe the respondents had an adequate sense of fused silica product equivalence for comparison purposes.

The demand curve graph diagrams presented by ElectroniCast Consultants to our clients show the relationship between the price and quantity of fused silica equivalent to fused silica that selected European or US manufacturers of specialty optical fiber responded to that they are willing to purchase.

These product demand curves will increase in usefulness as they test and measure the supply and demand of the product within this particular market. Graphed over time, demand curves can assist in determining if this particular (or equivalent) product is actually profitable at the pricing point on the curve where it is in demand.

Graphing a demand curve begins with two perpendicular lines forming a right angle. The y-axis, or vertical line, represents “price” as the dependent variable, and the x-axis, or horizontal line, represents the “quantity demanded” as the independent variable. Price increments move up along the outside of the y-axis with the highest price nearest the top. Quantity increments move from left to right just below the x-axis line with the lowest figure nearest to the 90° point of the angle.

The increment spacing at both lines is such that straight lines drawn from each price across from each are shown; there is equal spacing between the units on the x- and y-axes. The demand points (i.e., the correlative quantity for each price at which there is an indication that they would be willing to purchase fused silica) were then plotted within the graph to correspond to both a price on the y-axis and a quantity on the x-axis. By connecting the points, the demand curve is formed. The points along the demand curve show how the quantity demanded depends on the price of the fused silica for specialty optical fiber for these manufacturers.
           
            The sum of the price/quantity inputs of the 10-manufactures charted in this particular market research project by ElectroniCast Consultants is shown in detailed data Tables.

Based on the manufacturer’s responses, “smaller” quantity orders of the fused silica used in the manufacturing of specialty optical fibers have a higher price versus “larger” quantity orders.  According to comments from some of the interviews, this particular variable is assessed differently between each manufacturer, based on numerous factors, such as:

·        Separate purchase order versus multiple-month or multi-year quantities
  • Fused silica inventory-level and risk-level
  • Finished Goods Inventory (FGI), customer demand and marketing/sales
  • The definition of “small” or “larger” quantities
  • Cost of doing business, such as materials, labor, and other associated overhead
  • Management controls of purchasing process (centralized purchasing)
  • Manufacturing process yield percentage and Quality Assurance (QA)
  • Turn-around and/or order-to-ship (OTS) process



For more information on this or any other consultant service from ElectroniCast Consultants, please e-mail me at:

stephen_montgomery@electronicastconsultants.com

No comments:

Post a Comment