Optical Fiber Corporation
SWOT ANALYSIS
Environment
Fiber optics is a new technology that uses rays of light instead of electricity to transmit information over optical fibers at very high speeds. The optical fibers are usually thin strands of glass that are combined into cables and used to send information and computer data in the form of pulses of light. The optical fibers provide much clearer transmission than conventional copper cable and satellite links. The world market for optical fiber continues to grow rapidly, with shipments increasing 14 percent from an estimated 7.0 million kilometers of fiber in 1990 to approximately 8.0 million in 1991. The demand for multimode fiber is predicted to continue to expand through the mid-1990s, with some market analysts indicating that 15 to 20 percent annual growth over the next three years is reasonable. Strong demand is expected for singlemode and multimode fiber to be used in cables for local area networks, telecommunications, cable television (CATV), and transoceanic fiber-optic systems.
Industry
About 20 companies are involved in the manufacture of optical cable in the United States. It is a highly competitive industry requiring sophisticated design and engineering capabilities. As the market for optical fiber expands, copper cable manufacturers will extend their product lines to include fiber-optic cable. Facing increasing competition, these cable companies will prefer extremely responsive optical fiber suppliers. The ability of OFC to provide excellent customer service has enabled it to establish business relationships with some copper cable manufacturers.
Competition
OFC specializes in multimode fiber for data communications and telecommunications markets. The mar...
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...ld do so. Since rapid expansion of the cable industry over the past several years and a weak economy had resulted in a temporary oversupply of cable (thus, a number of good businesses were looking for buyers to avoid bankruptcy or liquidation). Industry experts estimated the cost to acquire a cable manufacturer at between $10 million and $15 million. This is quite plausible with OFC’s healthy cash position. This acquisition should occur quickly before the economy recovered and the supply of fiber optic cable came back into balance with demand. This will allow OFC to gain instant access to both single and multi-mode without the prerequisite internal R&D cycle time. It would also pose an excellent value at a time when industry firm price tags are beaten down. These features would aid OFC in protecting its existing niche while expanding into new emerging markets.
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Robert Zimmerman, the senior vice president of business development, for American Cable Communications (ACC) was in the process of looking for a potential acquisition target for ACC. In December 2007, Zimmerman remember a presentation that was made recently by Rubinstein & Ross (R&R). R&R was a boutique investment bank that was well known for doing deals in the media and telecommunications area. During this presentation it was suggested that ACC buy out AirThread Connections (AirThread) which is a large regional cellular provider. The current industry of these companies were moving more toward bundled service offerings and by adding AirThread it would help ACC cover an area of service it does not currently offer. In order to determine if the acquisition should be done an analysis needs to be done.
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Like a lot inventions in the past two centuries, modern fibre optic cable was created for military uses. The manager for Copper Cable and Wire at the US Army Signal Corps was getting more displeased with the amount of signal loss that was due to copper cable.
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All forms of commerce will benefit from fibre optic connectivity as it will lower the cost of communication, which is a vital part of any business. New opportunity for the growth of the data market will emerge as cheaper bandwidth should translate to more users.
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The SWOT analysis is a useful tool for identifying our personal strengths, weaknesses, opportunities, and threats to our plans and goals. According to a “Fuel My Motivation” article (2010), this analysis considers internal influences that can positively or negatively affect our ability to achieve our goals. The internal factors are our strengths and weaknesses. Also considered are opportunities and threats, which are external influences that can have a positive or negative impact on the ability to achieve our goals. I will share how the self-assessment instruments and self-exercises in this course have contributed to assessing and understanding my strengths and weaknesses. I will also discuss techniques I will use to leverage my strengths and understand my weaknesses. In addition, I will consider opportunities that I can take advantage of and the threats that can possibly impede my progress.
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