Tuesday, May 28, 2019

Science Technology Company Essay -- Science Technology Company Busines

Science Technology CompanyBill Watson of Science Technology Company (STC) should not discuss thecurrent 5-year financing be after prepared by Harry Finson, the chieffinancial officer, at the forthcoming board meeting. The industriousnessthat STC is in has short product life cycle, rapid applied scienceobsolescence and fast growth with increasing disputation. In fact,STCs strategy to survive the competition is to maintain leadership inATE segment and to further compete in the large scale integrated(VLSI) circuits segment by chasing market share and spreading high R&Dcost over large sales. However, the large sales growth seems to bemore difficult to obtain with the newly added competition. Based onhistorical trend, level of competition, and other related industryfigures It is suggested that a more reasonable 12.8% annual growthprojection be used. STC is losing cash flow in both its operating andinvesting activities therefore projections of 30% sales growth areoverly optimistic and unreliable.When STC began they only competed against a handful of companies, andalthough they currently hold the dominant share of the market, thisincrease in competition could upset future revenue. Increasingcompetition in the ATE segment will inevitably induce price wars,which will further deplete the hit margin of the company. If pricewars were to take place, Teradyne seems to be the reasonable winner. In fact, over the last 5 years, Teradyne has amassed a tota...

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