As one of the leading Market Engineering consulting companies, Frost & Sullivan has an impressive track record in forecasting the emergence of new markets and technologies, as well as shifts in existing markets. Our rigorous and highly quantitative, proprietary Interactive Forecasting Model is one of the tools that can provide your company with a surefire means of generating better forecasts.

The uniqueness of this Interactive Forecasting Model lies in its ability to integrate both quantitative and qualitative variables to project the future of high-tech and low-tech markets. The Market Engineering forecasting model not only provides forecast information, but also explains the basis of these projections.

The steps involved in using this model are:

• Identification of the market's stage in the product life cycle
• Identification of unit shipment drivers and restraints
• Identification of price drivers and restraints

Unit shipment drivers and restraints, and price drivers and restraints, along with their weights are entered.

• Evaluation of the impact of each driver and restraint over the seven-year forecast period

- Evaluation is over a time period - one-to-two years, three-to-four years, and five-to-seven years
- Classification of the impacts between zero (no impact in a particular time period) and very high

• Assigning of weights to the drivers and restraints to reflect their importance

The model then calculates market revenues as the product of the unit shipment and price forecasts that it has generated, building on the base-year data. Results are presented in table and graphical form.

The forecast is tabled . . .

. . . and graphed.

This methodology has a significant competitive edge over other forecasting techniques because of its flexibility and accuracy. The most important benefits that it provides are:

• A thorough analysis of all factors affecting a market
• Logical consistency of forecasts, given the anticipated impacts of the drivers and restraints affecting the market
• Clear reasoning for expected changes in market trends

The models underlying the forecasts for the market segments included in a Frost & Sullivan study are available for purchase with the study. Our clients can use the models to conduct their own analyses of the market. This allows our clients to:

• Adapt the model to incorporate their own assumptions and judgments
• Conduct scenario and sensitivity analyses
• Keep the analysis up-to-date even as the market changes

A client can instantly gauge the impact of changes in assumptions on the forecast by adding or eliminating variables, and by adjusting impacts and weights.

The interactivity of the models is one of the most valuable attributes that allows quick and easy refining and updating of the forecast. Moreover, across-the-spectrum forecasting becomes very easy due to individual analysis of each segment and the summing up of segments into the total market forecast.

A correct forecast drives appropriate decisions and strategies. This is the great value that the Frost & Sullivan Interactive Forecasting Model provides to our clients, whether they buy the model itself or Frost & Sullivan studies based on the model.

Information on how to best utilize these models to the advantage of your company can be obtained from:

Krishna Srinivasan
650.475.4554
krishna_srinivasan@frost.com