Corporate Finance as a Manufacturer

Corporate Finance

As a manufacturer and provider of enriched uranium, USUS has placed itself at the forefront of energy technology. This is highly important, particularly at a time where energy crises loom and technological development remains at a crossroads regarding how to remedy this problem. The firm is therefore in a very solid position to determine its strategic position for the future, particularly as there is a current increase in demand for their products and services.

There are two main elements that contribute to USUS's market strength: its sole access to the particular technology required to a filtration process known as flexible fluorine filtration, and the relatively weak position of its nearest competitor.

Currently, USUS is the only firm with an operational knowledge of flexible fluorine filtration. In the market, the main advantage of this process is that it poses fewer environmental risks. By association, this factor catapulted USUS's already strong position in the market even further. There was no need to retrofit their facilities like their competitors did to comply with new environmental laws, as the low risks of their new technology placed them in a position to save the funding and apply it elsewhere.

This is the company's main competitive advantage, and is likely to remain so in the long-term. The technology was internally developed by USUS workers, and most likely to be a closely guarded secret. As long as USUS can maintain its position as the only company using the technology, its advantage over other companies will persist.

The main reason for this is that the company has funding available to use elsewhere, such as strategic development or expansion. If the company applies its internal strengths of focus on innovation and creativity to the use of this funding, it is likely to perpetuate this advantage, and possibly gain a significant amount of the market.

One might argue that the company's competitors might well be inspired to react to the new market demand by creating new technology of their own. However, in such a case, USUS would still maintain its competitive advantage for a considerable time, as its technology is already tested and working, while the others are in the development and marketing process. The advantage of unique technology is therefore a unique position in a market where demand is rapidly increasing as energy providers continue to look for alternative sources of power for their clients.

In terms of its nearest competitor, the company's technology also places it in a favorable position in terms of earnings. Green Chemical Corporation for example has shown a decrease in its market share and a rise in its debt level. This has depressed earnings. USUS on the other hand has several products creating a variety of income streams. In addition, it is running at full capacity to produce UF6. Thus, the company is able to maintain its 30% market share in shipments, with the capacity to expand should it choose to do so.