Sunday, March 4, 2007

Question 1.

Look at your own organization. How has supply and/or demand changed at your organization within the past year? What factors impacted or instigated the change?

Our companies largest market segment we supply into is related to the water heater industry. With the slow down in the new home construction we’ve started to see a drop in the business. Surprisingly over 9M water heaters are sold in North America every year, with 80% of those units going into replacement usage. So another slowdown in demand is due to competition in the water heater market itself. As products are being offered with longer and longer warranty periods, it effectively pushes out the demand for product. The large retailers like Home Depot and Lowes both expect to remain competitive so if one manufacturer promotes a longer life product, the entire industry moves almost in unison.

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