arboirte
LOW COST – NOT DIFFERENTIATOR
HPL Market in Canada
The sales of High-pressure laminates (HPL) in Canada went up 38.78 percent from 60 millions of square feet in 1982 to 98 in 1987 (Exhibit 2 in case). However, the percentage HPL made in Canada decreased 17 percent that is equal to the percentage HPL imported from US. Obviously, most customers start to buy HPL made from US even though the average price of US imports is 1.1 dollars per square foot, 0.13 dollar more than the price of Canadian-made.
Suggestion: Arborite can set up factories in US or transfer all the production to Toronto. The price of HPL made from US is higher than Canadian- made and the sales of HPL made from US raised 17 percent. Arborite can analyze the costs manufacturing HPL in US including shipping, manufacturing and a 4.8 percent tariff. Another alterative is transferring all the production to Toronto because the cost in Toronto is 23.3 percent lower than that in Montreal.
Profit
Arborite manufactured HPL at two Canadian factories and the average cost is 62.2 cents per square foot. In 1986, 96 millions of square feet sold in Canada and the average price is 97 cents. Moreover, Arborite dominated 34 percent Canadian HPL market. As a result, the profit of Arborite in 1986 is 11,3558,720 dollars. We can forecast the demand in Canada will increase because the sales increase in every year since 1982.
Suggestion: Arborite can reduce the cost or increase the market share. The demand usually comes from OEM and independent distributors. Arborite should build good relationship with OEM and independent distributors.
Substitutes
The substitutes of HPL include LPL, Vinyl, Veneer, Paper and Foil. Architects and designers can choose different materials instead of HPL according to different function. 1175 millions of square feet paper was used in custom-designed interiors for offices but HPL only used 25 millions of square feet. Moreover, HPL only used 1300 millions of square feet, less than Paper,
HPL Market in Canada
The sales of High-pressure laminates (HPL) in Canada went up 38.78 percent from 60 millions of square feet in 1982 to 98 in 1987 (Exhibit 2 in case). However, the percentage HPL made in Canada decreased 17 percent that is equal to the percentage HPL imported from US. Obviously, most customers start to buy HPL made from US even though the average price of US imports is 1.1 dollars per square foot, 0.13 dollar more than the price of Canadian-made.
Suggestion: Arborite can set up factories in US or transfer all the production to Toronto. The price of HPL made from US is higher than Canadian- made and the sales of HPL made from US raised 17 percent. Arborite can analyze the costs manufacturing HPL in US including shipping, manufacturing and a 4.8 percent tariff. Another alterative is transferring all the production to Toronto because the cost in Toronto is 23.3 percent lower than that in Montreal.
Profit
Arborite manufactured HPL at two Canadian factories and the average cost is 62.2 cents per square foot. In 1986, 96 millions of square feet sold in Canada and the average price is 97 cents. Moreover, Arborite dominated 34 percent Canadian HPL market. As a result, the profit of Arborite in 1986 is 11,3558,720 dollars. We can forecast the demand in Canada will increase because the sales increase in every year since 1982.
Suggestion: Arborite can reduce the cost or increase the market share. The demand usually comes from OEM and independent distributors. Arborite should build good relationship with OEM and independent distributors.
Substitutes
The substitutes of HPL include LPL, Vinyl, Veneer, Paper and Foil. Architects and designers can choose different materials instead of HPL according to different function. 1175 millions of square feet paper was used in custom-designed interiors for offices but HPL only used 25 millions of square feet. Moreover, HPL only used 1300 millions of square feet, less than Paper,