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Unformatted text preview: ECONOMIC FORECAST FOR RIORDAN MANUFACTURING June 16, 2005 Riordan Manufacturing is a global plastics manufacturer with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries. Riordan Industries is a Fortune 1000 enterprise with revenues in excess of $1 billion. Riordan Manufacturing is an industry leader in the field of plastic injection molding creating innovative plastic designs that have earned international acclaim. Riordan Manufacturing uses state-of-the art design capabilities in its processes to facilitate extreme precision and enthusiastic quality control. Riordan Manufacturing's products include plastic bottles, fans in all sizes, heart valves, medical stents, and custom plastic parts. The firm's major customers and markets include; automotive parts manufacturers, aircraft manufacturers, beverage makers and bottlers, appliance manufacturers, health care, and the Department of Defense. The firm has operations in Georgia, Michigan, California, and a joint venture in China and employs over 300 employees plus 250 employees in its joint venture in China. The firm's products include plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at its facilities in Hangzhou, China. Research and development is done at the corporate headquarters in San Jose. Economic Overview The markets for plastic bottles, fans, and custom plastic parts are affected by changing economic conditions. As a result, it is the impact of the economy on Riordan Manufacturing's major customers and markets that must be analyzed in order to determine how the future direction of the economy will affect Riordan Manufacturing. Automotive parts manufacturers, aircraft manufacturers, and appliance manufacturers are all impacted by the strength of the overall economy, and appliance manufacturers are also affected by the strength of the housing market. Beverage makers and bottlers are impacted by changes in demand for the drink products that are contained in the bottles they produce, but overall demand for drink products is only marginally affected by the overall economy. In general, it can be assumed that a strong economy will support continued sales of the products produced by beverage makers and bottlers, but the competitive business decisions made by Riordan Manufacturing's customers are significant. The demand for heart valves, medical stents, and health care services in general is primarily affected by demographic trends and the availability of health insurance. The question related to health insurance is too uncertain to analyze here. The demographic question is easier to address. The baby boomer group includes more than one-fourth of the population in the United States, and as it ages, it is natural to assume that the demand for health care services, including heart valves, medical stents, will increase as this demographic cohort ages. stents, will increase as this demographic cohort ages....
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This note was uploaded on 05/10/2011 for the course ECO 212 taught by Professor Emil during the Spring '11 term at Aberystwyth University.
- Spring '11