Should we do what we are thinking about doing?

Diffraction Physics

S = May have problem

C = If so, will have to change

Q = Do I have to change?

As a supplier of scanners to IBM's EPOS systems, Diffraction Physics has the largest share of scanner sales in the European market. The company is respected for its high technical quality, and consequently commands a high price.

However NCR/ICL arc beginning to offer unbundled scanners at a much lower price. If this marks the beginning of a definite trend, it could lead to the disappearance of OEMs altogether, accompanied by aggressive price cutting.

We did a market survey to determine the extent of the threat to Diffraction Physics' position, and whether it makes sense for the company to try to sell direct as well.

Our conclusion is that Diffraction Physics should launch a major unbundled effort now, to be in a position to capitalize on long-term industry trends.