Peterson Instrument's products can be grouped into two main lines of business: electric meters (EM) and electronic instruments (EI). Both products are industrial measuring instruments and perform similar functions. However, these products differ in their manufacturing technology and their end use characteristics. EM is based on mechanical and electrical technology, whereas EI is based on microchip technology. Additional information concerning the two products is provided below.

Overall market (units) Electric meters (EM) Electronic Instruments (EI)

Planned 350000 150000

Actual 280000 200000

Peterson's market share:

Planned 15% 10%

Actual 10% 15%

Peterson's selling prices (per unit):

Planned $35 $120

Actual $20 $100

Peterson's contribution margin (per unit):

Planned $20 $60

Actual $ 3 $50

Average industry selling price:

Actual $40* $130**

Peterson's variable costs (per unit):

Standard $15 $60

Actual $17 $50

Average industry costs:

Actual $15 $55

Product/market characteristics Mature Evolving

Lower level technology Higher level technology

Variance analysis

Electric Meters(EM): Market size Market share Sales price M/f cost

$210,000U $280000U $420,000U $56,000U

ElectronicInstruments(EI):

Market size Market share Sales price M/f cost

$300,000F $600,000F $600,000U $300,000F

Required:

(a)Classify the two products (electric meters and electric instruments) using the BCG matrix, and discuss the strategy that should be adopted for each product?[NB You can use any of the strategic frameworks to discuss your answer.] (4 marks)

(b)Critically evaluate the performance of Peterson Instruments in respect to the two products. (8 marks)