1)
A) I feel that STC operates in a competitive environment that has the characteristics of being very volatile. I believe the technology market that they are in is based on consumer spending and demand for new technologies. If consumers don't have the extra capital to spend on new technologies, the manufactures of the new products will slow production, which in turn will mean less of a need for testers and testing software, which will obviously cause a decrease in sales. STC also has competition for market share with the testing of silicon chips and circuit boards. If STC does not stay ahead of the competition with new and lower cost ways of testing electronic equipment they could see their market share decline, which could cause great stress on STC's sales.
B) I feel one of STC's most important operating characteristics is the amount of money that is spent on research and development. STC increased their R&D spending by 32% in 1984. I believe this is due to the competitive market they are in, but I also feel they may be spreading themselves thin in to many markets. What I mean by this is that they are in the market of designing and manufacturing testers and test software, in which they have a 31% market share, but they are also in another competitive market of testing more complex systems (VLSI) which seems to be increasing their overall spending.
2) Some of the financial characteristics of STC resulting from their operating strategy are their increase in selling, general, and administrative expenses. They increased the expenses in this area by $34 million from 1980 to 1984. This is a component of them increasing their sales force in the semiconductor and electronic manufacturing industries throughout Europe, North America, and the Pacific Basin trying to ...