Environmental Analysis
In this paper, I will list the five key macroeconomic variables that affect Lexar and the overall electronic industry. The five key macroeconomic variables are real personal income, inflation rate, interest rate, unemployment rate, and tax policy. These variables are considered to be the most important indicators that the U.S. government uses to asses the conditions of the U.S. economy. Among these five variables, real personal income and inflation rate will have more of an impact on Lexar's current and future economic situations. Along with these economic variables, Lexar is also faced with the marginal cost and monopolistic competition for organizational survival and market shares.
Lexar Overview
Lexar is a leading marketer and manufacturer of NAND flash memory products including memory cards, USB flash drives, card readers, and ATA controller technology for the digital photography, consumer electronics, industrial and communications markets (www.Lexar.com, 2007). Lexar's products are sold mostly in the US, as well as in Japan, Korea, the UK, Europe, and Canada. Customers include retailers, OEMs, and licensees. "Lexar Media leads the industry in the performance benchmarks that digital camera users are looking for in digital film: capacity and speed," said Jack Peterson, vice president of consumer products for Lexar Media (Thefreelibrary.com, 2007). In order for Lexar to be price competitive with its competitors, the company has outsourced all its electronic manufacturing to Asia. The product demand elasticity is strong in all the key market segments, but Lexar along with its competitors have to operate in a price-elastic environment to stay profitable.
Five Key Macroeconomic Variables
Real Personal Income
The first important key macroeconomic variable is real personal income.
Real personal income means individuals who have earned money through employment and investments. As more electronic industry turned to...
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