Garmin Capstone Project Update 10/151519 – word count 3818



Download 236.79 Kb.
Page1/4
Date28.01.2017
Size236.79 Kb.
#9872
  1   2   3   4


TEAM B “Synergy”

” (Scott, Irene, April, Simplicious)



Garmin Capstone Project

Update 10/151519 – word count 3818

Contents


Cited Sources: 7

WEAKNESSES 8

OPPORTUNITIES 8


THREATS 8

POLITICAL: 13

ECONOMIC: 13

SOCIAL: 14

TECHNOLOGICAL: 15

Sources: 15

Financial Ratio Analysis Garmin Ltd (GRMN) 17

Critical Success Factors 18

Critical Success Factors 28

Technological Innovations & Marketing Strategy Cited Sources: 29

PEST Analysis Sources: 29




Garmin Company Description

Creating navigation and communication devices that enrich their customer’s lives is what Garmin is all about. One year after a brain storming session around a card table with a small group of engineers, Garmin launched its first product in 1990. The GPS 100, a panel-mounted receiver intended for the marine market, debuted at the 1990 International Marine Technology Exposition in Chicago. The unit, which cost $2,500, was an immediate hit and Garmin left the exposition with an order backlog of 5,000 units.1

Garmin’s next product was a handheld GPS receiver used by military personnel serving during the first Gulf War in 1991. The company expanded industry application of these devices for the fitness and sports industries next. One of their most popular product lines are is the eTrek series of handheld GPS devices. The original eTrek offered a lightweight, waterproof, palm-sized 12-channel GPS receiver. It was enthusiastically received by backpackers, hikers, and others who made their way into remote areas. The battery life of the eTrek was an impressive 22 hours on two AA-size batteries. The eTrek product line continues. today and the technology offered within these units has continued to evolve over time providing advanced functionality such as an altimeter, digital compass, detailed road maps and more.2

Garmin’s focus on continual innovation, along with a desire to meet their loyal customer’s expectations, has fueled an ever-growing list of products. Today, application of Garmin’s products span a wide range of industries to include automotive, aviation, marine, fitness, outdoor recreation, and wireless. 3 One of Garmin’s strategies is to offer alternatives for their customers utilizing different price points to their products. This provides a broader base of enthusiasts an opportunity to take advantage of the GPS technology Garmin has to offer regardless of their budget.


The company designs, manufactures, markets, and sells its own products. This is viewed by Garmin as - a significant competitive advantage because they live and breathe their solutions. Research and development is paramount to Garmin’s long-term success. Within ten years, thetTh company went from a handful of employees in 1989 to 7,000 in 2007. The company is of the mindset thattheir employees must not only design, market and sell the product but also use it in all of its applications. This enables Garmin to remain focused on the continual improvement of their products. At the end of the day, their products must be making them easy to use, intuitive and to simple to navigate in order to meet theirtheirto the end of one objective 4

– to remove as much of the stress related to travel as possible.

Garmin sells over 100 products that can be found in all shapes and sizes, such as OEM installations on motorcycles and sonar fish-finders on boats. . Garmin is also leveraging their navigation software and selling sells the product for use on laptop computers. Most recently, Garmin announced they are launching athe launch of their new smart-phone, the nüvifone, “Nuvi” phone. Theyplan to partner with an exclusive wireless telephone companycompany when they become becomeavailable for purchase that is intended to compete with smartphones on the market. 5


.

Sources:


1 Garmin Company: About Us (2009).
Retrieved September 25, 2009, from Garmin Website:
**http://www8.garmin.com/aboutGarmin**
2 Garmin Culture: Stories from the Inside (2009).
Retrieved September 25, 2009, from Garmin Website:
http://www8.garmin.com/careers/culture.html?activeBranchId=careers
3 Wikipedia - The Free Encyclopedia: Garmin (Sept 18, 2009).
Retrieved September 25, 2009, from Wikipedia Website:
http://en.wikipedia.org/wiki/Garmin
4 Wichita Business Journal: Report: Garmin smartphone will cost $500 (Sept 22, 2009).
Retrieved September 25, 2009, from Wichita Business Journal Website:
http://wichita.bizjournals.com/wichita/stories/2009/09/21/daily23.html
5 Wall Street Journal: Garmin Tried to Find Ways Around Smartphone Threat (Sept 22, 2009).
By Ben Charney; Retrieved September 25, 2009, from Wichita Business Journal Website: http://online.wsj.com/article/BT-CO-20090921-703769.html
Technological Innovations


Garmin’s customers seek them out as the market leader for innovation, quality, reliability and support. This gives Garmin a strong, enthusiastic following in each of their market segments.

Garmin pioneered the standalone portable navigation device market. The market for stand-alone GPS devices is fast- growing and increasingly competitive as multi-capability devices, such as smartphones, are gaining market share. GPS technology moved onto cell phones a few years ago and is a fast-growing feature on the devices. Some 77 million GPS-equipped smart phones will ship worldwide in 2009, up 35% from last year. (Garmin, 2008)


The market for stand-alone GPS devices is fast-growing and increasingly competitive as multi-capability devices, such as smartphones, are gaining market share.

The United States Department of Defense controls the satellite system that enables GPS technology, and Garmin licenses maps from NAVTEQ, which is owned by Nokia NOK. (Becky, 2009) Garmin delivers value by combining these technologies to a user-friendly consumer package. Garmin relies on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect its rights. Garmin hold rights to a number of patents and registered trademarks and regularly file applications. Garmin maintains a strong commitment to R&D.


One of the key strategic initiatives of the company for its future growth is continuous innovation, development, and introduction of new products. Garmin benefits greatly from the consistently expanding aviation, marine and fitness segments. Product development for these segments accounts for nearly 30% of Garmin's sales and approximately 45% of its operational earnings. (Kiley, 2009)


Marketing strategy


Garmin leverages its GPS expertise to deliver navigation devices for anything that moves. As the navigation component of its devices becomes more commoditized, Garmin is branching out into services and new devices such as the nüvifone to sustain its market share. Garmin also distinguishes itself from competitors through rapid research-and-development (R&D) cycles that deliver product refreshes quickly.

Garmin's primary marketing strategy is to "provide a quality product at an affordable price." The overarching mission of this strategy is: “to enrich the lives of customers, suppliers, distributors, associates and stockholders by designing, manufacturing and selling navigation and communication products that provide superior quality, safety and operational features, lower cost of manufacturing and ownership, and sufficient profits to support desired company growth.” (Garmin, 2007)

Product

Garmin designs, manufactures, markets and sells over 100 products worldwide for consumer, business and military applications. As customer demands have evolved - Garmin has launched new products. Their communication and navigation products serve the aviation, marine, outdoor, fitness, automotive, mobile and OEM markets.

As the navigation component of its devices becomes more commoditized, Garmin is branching out into services and new devices such as the nüvifone to sustain its market share. Most recently, Garmin announced the release of the nüvifone product line. With the nüvifone, Garmin will be and competing with mobile phone manufacturers. The company’s value proposition is to integrateintegrate navigationThe navigation into is integrated into the nüvifone mobile phone, making asit a prominent feature rather than an after-thought. There is a concern among analysts that the nüvifone could cannibalize Garmin’s existing product lines.


  • Garmin's focus on R&D ensures the latest features are brought to market quickly through product refreshes.

  • Garmin is betting on the nüvifone to help it stay relevant as GPS functionality becomes pervasive on cell phones. With no history of success in phones, Garmin faces. This stride comes with significant execution risk in a competitive industry.

  • Adoption of GPS service by wireless carriers could cannibalize sales of Garmin's personal navigation devices.


Price

Overall, pricing for GPS products dropped by 15% year-over-year in February 2007 compared to the same period last year. The average price of GPS products as of 2007 was $433. With the onset of lower priced products introduced by Mio and via Michelin, we expect to see increased pricing competition between manufacturers. This will lead to further downward trending in pricing for GPS products, as more manufacturers realize the benefits of targeting mainstream consumers at low-end price points.

According to Pricegrabber.com O-- of the top ten most popular GPS products, seven out of the top ten are produced by Garmin. TomTom and Mio, both known for offering several affordable GPS products for the mainstream consumer, also made it on the top ten lists. In 2008, Being the main manufacturer on this list, Garmin’s GPS products had an asold for an average ofverage price of $467. Non NonOverall, the non-Garmin GPS products on the list had an average price of $307, priced 34% lower than Garmin GPS products. (Pricegrabber, 2008)

Garmin ranks ranked highest in a list of average price ranges for all GPS products by manufacturer:



  • $500 average price range - Garmin

  • $400 average price range - TomTom, Magellan, and Lowrance

  • $200 average price range - Mio and ViaMichelin

Garmin


Garmin employs a niche product pricing strategy because the standalone GPS market is still considered a niche market. Though Garmin’s pricing is geared toward the higher-income consumer, 70% of the most popular GPS products listed are Garmin products.

pricing strategystrategy matches the overall impression of the GPS market which is still considered a niche market. Although Garmi. Although Garmin reaches the high-end consumer, offering GPS products in the average price range of $500,, 70% of the most popular GPS productslisted are Garmin products.



  • With increased competition, Garmin is lowering prices -- adversely affecting their market share.

  • Though priced competitively, weak consumer spending has slowed Garmin's sales growth recently.

  • Average sale prices for Garmin's navigation devices continue to fall as competition increases -- adversely affecting their market share.

  • Garmin recently benefited from lower input costs affecting their ability to remain competitively priced.

  • (Pricegrabber, 2008)




PlacePlacePlace

Garmin products are available in a variety of retail channels on three continents: North America, Europe and Asia. As consumer demand for GPS technology increases, especially in the automotive market, Garmin has opportunities to meet the needs of consumers in more key markets with new and refreshed innovative products.

In addition to a more traditional distribution system, Garmin also has relationships with the many original equipment manufacturers. The consumer product distributors of the company include automotive OEMs giants such as Chrysler/Mopar, Toyota, Harley-Davidson, BMW Motorrad, and Honda Motorcycle.

In 2008, Stan Brajer, director of fitness sales and marketing for Garmin, announced that they wanted to focus more on specialty markets as part of their goal to win back independent bicycle dealers. (Norman, 2009)



  • GarminGarmin’s has developed a strong distribution network withincludes that includes over 3,000+ independent dealers, including many ofand the largest electronics retailers. around the globe.

  • Garmin's consumer products are marketed through local distributors who resell to dealers.

  • Garmin's distribution reach is diminishes d as retailers such as Circuit City close stores.


Promotion

Garmin utilizes an in-house advertising agency that handles all of the company's promotional and communication needs. Included in this department are artists, writers, designers, media buyers, event coordinators, video producers and public relations specialists.

Throughout In 2008, Garmin’s strategy also includedincludedthey became a relationship as the exclusive navigation supplier to Kenwood’s new 2008 lineup of in-dash automotive electronics. With this agreement, Garmin aligned with Kenwood on print, radio and online advertising in addition to a dedicated internet site and point-of-purchase materials to inform customers. (Garmin, 2007)

Late 2008, Garmin announced a decision to shift its focus to the specialty retailer channel. The decision is attributed to the company's goal to win back independent bike dealers. Previously, Garmin's cycling-specific products could be found in three different channels with the same pricing. According to Stan Brajer, director of fitness sales and marketing for Garmin, they wanted to focus on the specialty market. (Norman, 2009)



  • The company's focus on marketing its brand and products focusesis on increased consumer awareness of the Garmin name.

  • Efforts include typical media placements (periodical ad space, billboard, radio)



Cited Sources:


  • Becky H. GPS brownout unlikely. Colorado Springs Business Journal (CO). n.d.;Available from: Regional Business News, Ipswich, MA. Accessed September 25, 2009.

  • Bertolucci J. Let a GPS Be Your Trail Guide. Kiplinger's Personal Finance. August 2009;63(8):p70.

  • Event Brief of Q2 2009 Garmin Ltd. Earnings Conference Call - Final. Fair Disclosure Wire (Quarterly Earnings Reports).

  • Garmin Signals The Worst Is Past. Wall Street Journal - Eastern Edition, August 6, 2009:pB5.

  • Kiley D. THE RIGHT DIRECTION. BusinessWeek. September 28, 2009;(4148):p75.

  • Mott G. Golf & GPS Technology. Cigar Aficionado. September 2009;17(6):pp81-85. Available from: Business Source Premier, Ipswich, MA. Accessed October 1, 2009.

  • Norman J. Garmin Changes Strategy to Focus on Specialty Bike Channel. Bicycle Retailer & Industry News. April 15, 2009;18(6):p10.


Other Sources:
http://electronics.pricegrabber.com/gps
http://finance.yahoo.com/q?s=GRMN
http://www.garmin.com
http://www10.giscafe.com/nbc/articles/view_article.php?articleid=493609
http://www.gpslodge.com
http://www.mobilewhack.com/garmin-and-tomtom-sold-over-10-million-pnds-in-2007/
http://www.tomtom.com
SWOT ANALYSIS
STRENGTHS

STRENGTHS


  • Core competency of Garmin is its ability to leverage GPS technologies and in-house manufacturing to create trendy but useful products with the ability to targettargetfor high growth markets.

  • Provides efficient after sales services with and superior customer support in areas like repairs, technical support and warranties services.

  • They manufacturemanufactureManufacturing their products in-house, thus reducingreducingreduces mishaps and poor ensures quality products from having their products manufactured by a third party for bringing new products to the market...

  • The company owns its manufacturing facilities which are located in Taiwan and also receives tax incentives from the Taiwanese government , but are slated to end in 2011. The existence of cheapercCheaper labor also allows the company to keep its operating costs low.

  • Garmin produces quality products whichwhichproducts that are ISO certified and further approved for use in aviation by the FAA.

  • The company is leadA robust team of subject matter experts in their respective fields champion The company is leadcorporate growth and commitment to quality. by a well rounded and robust team of individuals that are well versed in their specific field of expertise to champion the company’s values and commitment to superior products.

WEAKNESSES


  • GPS devices (inherent product weakness) are accurate to within 15 meters and certain atmospheric and weather factors may affect thetheir accuracy of GPS receivers.

  • GPS satellitesatellites systems are monitored and controlled by the U.S Department of Defense. As such the company is not in complete control of the systems it relies on for its products. This may limit potential, potentially limiting potentialsales to certain clients (i.e. buyers of their products especially foreign governments) that do not want to have another government collect sensitive data about their countries.

  • The company is plagued aEndures a low sales cycle during the first half of the year year compared to theversus the latter half of the year where there is a greater demand for their products. This is related to a as consumers plan annual kind of seasonality where during spring, Summer and fall the company experiences the highest demand for their products primarily because these are the seasons where a lot more people decide to go on trips, holidays and and do marine activity, a time when GPS devices are needed/used the most.


OPPORTUNITIES





  • Garmin has embarked on aaA brand awareness drive to increase its visibility in the world, especially in Europe by they sponsoring sponsored the English Premier League football club at Middlesbrough , as well as aasand a “Garmin-Slipstream” cycling team Garmin-Slipstream to promote their products.

  • The GPS trendThe use of GPS technology withintrend has caught on with many people and varying age groups. is rising and . As such, there are many increased opportunities to provide cutting-edge applications for of the technology which Garmin can continue to be the first mover or create more uses and services for the technology.

  • The need for all -in- one devices and the shift by most electronic and manufacturing companies gearing toward consolidated products and applications like in mobile phones with GPS devices and complementary services provides continued opportunity.

  • Garmin could capitalize/invest With in the progress technology made bybyof applications such as google.com with its Google-Maps such as , street- level pictures embedded into the maps could be something thatthatimages and specialty routing options Garmin could capitalize/invest on.


THREATS


S

  • There has been a whopping increaseiIncrease of new entrants in the user of offering personal navigation devices which have been consolidated into mobile devices like the iphone iPhone and Blackberry.

  • GPS satellites run the risk ofofmay becoming become inoperable due to a decaying gravity; over of the satellites as with timetimetime, they will end up beingbeingbe pulled to the earth by the earth’s gravityearth’sinto Earth’s atmospheregravity.

  • There is a risk of market saturation of GPS devices because of their long life cycles and usability, hence reducing non-recurring sales/revenues coming to the company.


Sources:
http://online.wsj.com/article/BT-CO-20090921-703769.html
http://www.techradar.com/news/portable-devices/satnav/us-says-gps-satellite-coverage-may-fail-soon-599431
http://www.gpsbusinessnews.com/Garmin-to-sponsor-well-known-UK-football-club-Middlesbrough_a278.html
http://www.kiplinger.com/columns/picks/archive/2007/pick0417.htm
http://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=grmn
http://www8.garmin.com/aboutGarmin/invRelations/execBios.html?activeBranchId=investor

COMPETITIVE ANALYSIS:

Part 1:



PORTER’S FIVE FORCES:
(Measurement scale: Very Weak, Weak, Medium, Strong and Very Strong)

DEGREE OF RIVALRY/COMPETITION – Very Strong

Garmin’s main competition comes mainly from primary competitor is Tom-Tom with 25% market share; while Garmin holds 50% (Newsweek.com) of the Persona Navigation Device market (PND) including GPS consumer products for automotive navigation. They also have stiff competition from their aviation centeredaviation-centered products from L-3 Avionics Systems and Rockwell Collins. And lastly a new up and comer. Another source of rivalry with Garmin areis the mobile devices industry that have has incorporated low cost GPS navigation services into mobile phones and PDA’s using 3G, EDGE and wireless internet technology as a base to download interactive maps. For exampleexample theThe iPhone and Blackberry are the strongest competition as regards to their personal GPS navigation line as GPS devices have proliferated the market. Garmin has swiftly replied to this threat by releasing their ownthe Nüvi nüvimobile phone with downloaded maps. To outperform its competitors, Garmin has to provide good quality products, bundle services and add features that lend themselves to consumer satisfaction.
THREAT OF SUBSTITUTES - Weak

Garmin is at the fore frontfrontforefront of providing directional information. The only substitute to the GPS navigation system offered by Garmin are maps that are periodically updated, printed and sold in local book and corner stores. The second is the use of online map and locations services like (Google maps) maps.google.com and mapQuest.com where you can route a journey and print it and follow the provided directions to your final destination.


The reason as to why the threat of substitutes is weak is because the GPS based technology has been bundled with features like route mappings, frequently updated maps, voice turn- by- turn command and location based services (i.e.like; gas stations, weather information, traffic and entertainment information.). These bundled services give Garmin an edge over possible substitute products and give consumers added valueaddegreater d valuebenefit because of the convenience of added services that they have at their finger tips.
SUPPLIERS POWER- Strong for data supplier and Weak for manufacturing

Garmin has a single supplier Navteq for its data to digital mapping services. There is only one other possible supplier (Tele Atlas NV) for the same services but were out bided by rival TomTom for their services. Thus, making Navteq a powerful supplier as bundled services are what create the added value to Garmin products. The same is true in regards to a strong supplier power when it comes to SiRF Technology Holdings, Inc. who as of 2005 provides an architecture on which Garmin devices are built. (SiRF Architecture.)


On the other hand whenIn respect to it comes to suppliers for product components, Garmin has a select number of suppliers that individually provide sub components to their factories. TheseThe individual and separate suppliers with whom Garmin has arrangements for component supplies do not have much little power.


BUYER POWER --– Medium


By the end of 2008, Best Buy accounted for 10% of Garmin’s total sales as per the 2008 Annual report. In the U.S consumer product sales channeled through Garmin’s network of dealers and distributors.


The following is a list of majormMajor consumers ofretailers carryingof Garmin products as attained from company(Garmin, 2008 Annual Report;):;
  • • Best Buy—one of the largest U.S. and Canadian electronics retailers;


  • • Amazon.com—internet retailer;


  • • Costco—an international chain of membership warehouses that carry quality, brand name merchandise;


  • • Halford’s—a large European retailer specializing in car parts and accessories;


  • • Petra—a large distributor who sells to such dealers as Costco and Amazon.com;


  • • Target— one of the nation’s largest general merchandise retailers;


  • • Wal-Mart—the world’s largest mass retailer; and


  • • Wynit—a large distributor who sells to such dealers as Radio Shack and Amazon.com.





And lastly, Garmin depends mainly on their automotive/mobile segment for 70% (2008 Annual report) of their revenues but because of the maturing nature of this segment of their business, there is less growth. (Garmin, 2008 Annual report)

BARRIERS TO ENTRY - Medium

First-mover companies like Garmin and its competitors like, (i.e. “Cobra, Lowrance, Thales, Navman, Raymarine, Mitac, TomTom, Honeywell, Dell, Hewlett-Packard, and PalmOne”,”), have invested heavily in GPS technology- based infrastructure and have intellectual property rights protecting their businesses. Therefore it is it hard for a new entrant to enter the GPS navigation market. making it difficult for new entrants. This leaves new entrant nNew entrants stake claim by creating the option of creating add-on services whichwhichservices can be either soldsoldsold either to the GPS market competitors or as a way to stake a claim in this lucrative industry.

It is however important toimportant to also note that there is vigorous price competition among the competitors as gone are the days when TomTom and Garmin used to charge $500 dollar based GPS navigation units. Today they have Garmin has gone down to as much as $150 a unit and that does not include the cheaper bundled GPS models bundled with mobile cellular devices that have recently hit the market in the last 1 ½ years.


The telecommunications industry under which Garmin operates is heavily regulated by the FCC, the same is true for the company’s operations in Europe where they also have to abide bybyare subject to European regulations and have to get and certified certification for each product they bring to market. Thus, any loss in certification or delay in attaining these credentials may lead to loss of market share. This too is a barrier to entering the industry.


Sources:
http://www.newsweek.com/id/68909
http://www.electronista.com/articles/08/01/30/garmin.nuviphone/
http://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=grmn
http://www.abiresearch.com/press/1115-GPS+Devices+and+Systems+Will+Generate+Revenues+of+%24240+Billion+by+2013
http://online.wsj.com/article/SB120027487946287479.html
http://www8.garmin.com/pressroom/corporate/083005.html
http://www8.garmin.com/aboutGarmin/invRelations/reports/10-K_2008.pdf


PEST Analysis

POLITICAL:


Garmin GPS devices, or any GPS devicedevices for that matter, are rendered useless without a satellite system to support it. Global Navigation Satellite Systems (GNSS) is the standard generic term for satellite navigation systems that provide autonomous geo-spatial positioning with global coverage. 1
The Currently, the United States currently has the only fully operationaloperationaloperational GNSS in the world, which is known as the: NAVSTAR Global Positioning System (GPS). The European Union is currently working on the Galileo project, which would add a second fully operational system in expected to launch in 2013. Russia’s GLONASS and China’s Beidou are working on their own projects, but won’t deploy until after 2013similar GNSSsimilar GNSS Galileo efforts, but are not expected to be fully deployed prior to 2013.2 At this time, Russia does have somehas some satellites deployed and operational; however, they are currently with restrictions.

The European Union (EU) has taken on thebegan the Galileo project projectdeveloped GNSS because they feelltfeel it is necessary to have an independent system upon which it canthey can rely on even in times of war or political disagreement. As it presently standsstandsPresently, the United States and/or Russia could disable their accessaccessEU’s toaccess to GPS by applyingapplyingthrough encryption on their satellites The US was successful in its request that the EU leverage a different frequency for Galileo GPS. By doing so, the jamming of this GNSS system would not affect the US system and they would retain an advantage.3. The United States has been very leeryleery of the European Union’sUnion initiative out of fear that it would impedeimpede its military positiony upper-handhand. Through political channels, the ultimately convinced the European Union to use a US was successfulin having the EU leverage a different frequency for the Galileo positioning systemsystem. By doing so, the the US could still jam its jamming of this GNSS GPS system would not affect the US system and they would retain an advantage.3

Until 2000, the U.S. could use a capability on the satellites called Selective Availability (SA), which essentially allowed them to render locations retrieved as completely inaccurate. What precipitated the desire to build Galileo was that the US satellites possessed something called Selective Availability (SA) that allowed the US to intentionally render locations on the GPS inaccurate. The EU felt that civil infrastructure using the GPS was vulnerable and, therefore, an independent system was needed. By In 2000, Bill Clinton had disabled SA and indicated there was never any intent to use it. Satellites and committed that future satellites wouldn’t have SA capabilitybeingbeing launched no longer have SA capability. .4

ECONOMIC:


While economic pressures have severely impactedimpactedaffected consumer discretionary spending, shipments of GPS-enabled cell phones will increase 6.4% from 2008. Shipment of GPS handsets is expected to drop 4 – 5% in 2009. Based on a study performed by ABI Research Services, the interest in GPS-enabled phones continues to rise... It is expected that 99nine out of every 10 smartphones will contain GPS capability by 2014, as compared to one in three in 2008. 5 Shipment of GPS handsets, though, is expected to drop 4 to– 5% in 2009. 5
The current economic crisis will likely last through the end of 2010, with some signs of recovery throughout 2010. During this time, consumer discretionary spending will likely deteriorate further. Recent news, published by Bloomberg on September 30, 2009, indicates the world’s largest economy (US) shrank at a .7% annual rate from April through June, the best performance in more than a year... 6
Europe’s economy contracted more than estimated in the second quarter as consumer spending was, investment and exports were weaker than earlier reported. 7

In late 2009, China announced an enormous fiscal stimulus package. Since then the Shanghai Composite Index has rallied some 90 percent. While this could be perceived as an indication of China’s economic turn-around, q Despite this fact, questions remain over their ability to sustain over the longer-term as the stimulus goes away.8



Europe’s economy contracted more than estimated in the second quarter as consumer spending, investment and exports were weaker than earlier reported. 7

In late 2009, China announced an enormous fiscal stimulus package. Since then the Shanghai Composite Index has rallied some 90 percent. While this could be perceived as an indication of China’s economic turn-around, questions remain over their ability to sustain over the longer-term as the stimulus goes away.8

Given the current state of the economy and its volatility, businesses around the world are concerned about the impact inflationary pressures could have on their businesses. Selling into International markets results in exposure to movements in currency exchange rates. Additional exposure exists with marketable securities that, as interest rates change, gains and losses associated with those securities have an impact. Of course, the tThe cost of credit is another significant concern, especially for those companies that rely heavily upon it to manage their cash. ..
The following table provides a snapshot of theThe state of several major economies, as of September 30, 2009:



Country

Interest Rate

Growth Rate

Inflation Rate

Jobless Rate

Exchange Rate

U.S.

.25%

-3.8%

-1.5%

9.8%

77.0450

EU

1.00%

4.8%

-.20%

9.6%

1.4732

China

5.31%

7.9%

-1.2%

4.3%

6.8255

Source: http://www.tradingeconomics.com

SOCIAL:

According to the TelecomTimesTelecom Times Bureau reports , mobile Mobile navigation devices are seeing a gradual uptake in 2009. ByBthat by 2015, it isisthe expected the number of GPS subscribers will reach as many as reach 160 million -- . This represents a 33.7% compound annual growth rate. Trends show that the USU.S. and Japan subscribers are opting for the mobile devices in large numbers, whereas the EU is seeing a more gradual replacement of personal navigation devices. 9


Consumers are interested in carrying around one device, as opposed to multiple devices (e.g., one phone and one GPS device). More . This expectation from consumers will apply pressure upon manufacturers to find new ways to differentiate or possibly form an alliance with a phone manufacturer to join forcesmanufacturerforces. In a survey done by three major cell phone manufacturers, they found GPS was the feature their customers “most want to see” in their next phone. 10

More than 40 percent of all smart-phone owners use their mobile devices to get turn-by-turn directions, according to Compete, a web analytics firm. For iPhone users, that number is more than double. As these phones enhance their GPS capabilities, it may may continue tolikely squeezepressurelikely squeeze personal navigation device makers. In the article, they interviewed a 22-year old marketer from New Jersey. He One person interviewed recently, summed up the general sentiment when he said, “the who . He saidsaid, “theThe simplicity of having one device and not needing to pull the Garmin out of my glove compartment is enough,” he said. “. “I want to get into my car and do as few things as possible.” 10





Download 236.79 Kb.

Share with your friends:
  1   2   3   4




The database is protected by copyright ©ininet.org 2024
send message

    Main page