Market Factors
The information in this section is derived from the Marketing Questionnaire, prepared by Smith Brothers. Please refer to the Support Documents section of this plan for details about obtaining the complete analysis.
Market Need for the Business
There are currently two major aircraft manufacturers in the United States. Total component part sales to these firms accounts for a total of $25,000,000 in purchases of the parts and components that we manufacture. As the air fleet ages, the demand for replacement parts increases. This market is expected to top $50,000,000 by the year 2000.
The end of the "Cold War", and the resulting "Peace Dividend" has dropped revenue from the Department of Defense contracts by 60 percent. However, some of this funding is being shifted to NASA for the development of the space station project.
This business is within a 50 mile radius of a major regional airport and 6 smaller local airports. There are about 700 locally owned and registered private aircraft. Thirty percent of the firm's manufactured products are related to the aircraft after-market. Approximately 150,000 square feet of the warehouse facility will be devoted to a Manufacturers Outlet Mall for aircraft enthusiasts.
Local Market Characteristics
Economic
Local air traffic at the Tri-state airport has been steadily increasing at a rate of 13 percent per year. Plans are in the works to expand the facility to two runways and to add two additional air carriers. This being done, air traffic should increase by another 27 percent. These additions would permit the establishment of a secondary air maintenance facility at the airport. This would increase the local demand for this firm's products.
Demographics
Two local schools, one a community college, the other adult vocational education, have added private pilot training to their curriculum. This will increase the flight hours logged on existing aircraft and increase the sales of new aircraft. Both of these situations will increase the demand for the firm's replacement parts and after-market components.
