The Canadian market for cable connectors is a relatively small one that increases at a slow rate. There are on the other hand some signs that the growth rate may increase in the coming years. Although the quality of the connectors used has not been a fundamental basis for purchasing decisions that seems to be changing slowly as the market develops. Moreover, the continued consolidation among cable TV operators will reduce the number of potential buyers. Therefore, it will be of outmost importance to penetrate the large multiple service operators that dominate the Canadian market. By launching the Snap-N-Seal, Augat is responding to those changes but its relatively small market share is a challenge that must be overcome so that sales may grow to a profitable level.
The unanticipated competition, on the other hand, from Raychem has changed the launching strategy that must be employed. Augat must price its Snap-N-Seal connector in the range that is comparable to Raychem. In addition, it must forgo some part of the revenue that is associated with the sales of installation tools. The company must do this in order to increase its chances of securing purchases from MSOs. By continuing to use White Radio as its exclusive distributor the company will continue to grow the strong ties it already has with the distributor. Furthermore, White Radio's commitment to the manufacturers it represents is valuable to Augat. Alternatively, the company could opt for competing on price rather than quality in order to potentially increase market share. However, this will position the product with lower quality products. The market has lately demonstrated a propensity towards the higher quality and more reliable connectors. Therefore, Augat should respond to those market requirements by int ...