Market Analysis The nanotubes market is young and unsaturated. There are currently three major players that are present; Carnot, Nan Teck, and Nanoburger. There are other minor players that are beginning to take hold in the market coming out of the Asia region, however, till now these companies pose no major threat in gaining significant market share in the raw nanotubes business. There are three main products produced by the nanotube producers, these three products are; raw nanotubes, technical liquids that use nanotube dispersions, and fibers containing nanotubes. The raw nanotube is currently the most demanded product. Demand far out-weighs supply in this sector, and none of the competitors currently has the capacity to produce more than one kilo of raw nanotubes per month. It seems that the future of the market will rest on the technology that can be developed from nanotube fibers, however this technology is a minimum of 5 years away from being commercially viable. Success in the nanotubes market relies on building a reputation for producing high quality nanotubes and the ability to build capacity in the near future to meet demand.

RPP Analysis In relative performance to the other companies, Carnot produces a nanotube that is of a very high quality, Nan Teck also produces a high quality product and Nanoburger produces a low quality product, however they have the best reputation among the group, which allows them to be the market leader. However, Carnot and Nan Teck have the ability to currently produce one kilo of nanotubes per month, and Nanoburger cannot match their capacity for production. In terms of the companies’ performance, Carnot currently produces the best nanotubes that are easy for the customers to process into their products; most of Carnot’s customers use nanotubes in T.V. and computer monitor flat screens. In terms of perceived performance, Carnot is currently not perceived as the go to producer. Nanoburger is currently the most reputable company; they are an American company and have the largest market share. However the customers have realized that Carnot has the ability to match demand where their competitors can’t.

Shaping a Competitive Advantage Carnot is currently in a position where it can shape out multiple competitive advantages to gain ground on their competitors. In order to carve a piece of the nanotube market for themselves, Carnot needs to exploit the weaknesses of their competitors. There are three possible competitive advantages that Carnot can work on. The first competitive advantage can be obtained if they build their production capacity. Both Nan Teck and Nanoburger are lagging behind in capacity, and with Nanoburger, because of the technology used to manufacture, they cannot significantly expand beyond their current capacity. The second competitive advantage can be shaped out of the future of the nanotube fibers market. If they invest their resources into the development of fibers when the time comes for this technology to grow in sales, they will have the first mover advantage and be able to exploit the new market more effectively than their competitors. The third competitive advantage that they can build is to gain a reputation for having the best quality nanotubes. It is already known that the nanotubes of Carnot are of a higher quality than those of Nanoburger, if Carnot can communicate this quality superiority to their customers, they will be able to build a reputation that can surpass that of Nanoburger.

Applications Prioritization There are three major areas in which nanotubes can be applied. These three areas, in order of priority to Carnot, are; raw nanotube production, fibers containing nanotubes, and technical liquids containing nanotube dispersions. Carnot should focus on the raw nanotube production, because this is where they can gain the most ground now. Because Nanoburger does not use appropriate technology that will allow them to expand their capacity, Carnot needs to expand their production capacity in order to fulfill the demand for nanotubes. This will allow them to become the market leader in nanotubes and gain the reputation required to grow their customer base. Their second priority should be to invest in fiber technology. Fiber technology will fuel future growth after the nanotube market matures, and if they invest in this technology now, they will be prepared to seize the opportunity when the time comes. Lastly, Carnot should continue to provide nanotube dispersions to serve a market need and not alienate any of their customers.

Strategy Options Carnot should adopt a strategy that will prepare them for the future and at the same time, allow them to seize the opportunities that are present today. Their strategy should encompass two main themes. The first should be to increase their market share in the nanotubes market. They can accomplish this goal through two steps. First, they should increase their capacity to allow them to produce up to one ton of nanotubes per month. They can do this without compromising quality of production if they continue to use the technology currently employed in production. Second, they have to communicate to the customer that they have the largest capacity as well as the best quality nanotubes available. The second step to the strategy is to embrace the possible future of the market by investing in the fiber technology. If they can build capacity for raw nanotubes now, and position themselves to latch onto the fiber train when it rolls through, then Carnot will be able to build a reputation for being the leader in quality and capacity, no matter what the nanotube application may be.