Environment Economic conditions and trends As evidenced by the case material, the US cookware market experienced growth by generating

approximately $3.36 billion in revenues rom !""! to !""6. #owever, due to economic recession o the recent years $!""%& present', cookware market aced new challenges and opportunities. (he ollowing developments appear to create several opportunities or cookware manu acturers. )ue to slow economy and unemployment, consumers cut back on dining out and de er back to home meals. According to *ookware +anu acturer,s Association $*+A', consumers have re&discovered their kitchen during !""-. (hus, visits to restaurants, carry&outs and ro.en entrees have been replaced by meals prepared in the home kitchen. (his trend highlights the possibility o increased demand on cookware products. /n the oreseeable uture, economists predict growth in private and commercial real&estate markets $by !"03'. (his potential development could boost demand or cookware when consumers, or example, start to move in to newly bought houses. #owever, the demand or cookware products would not move in the same direction or all price ranges. )ue to elastic demand or high&end and luxurious products, it is reasonable to expect that consumers will try to either buy less o premium priced items, or try to shi t their pre erences to less expensive models altogether. (his act could burden some companies in the industry that rely mostly on manu acturing and distribution o premium priced products. )espite slow economy, current and uture economic environment provides potential opportunities or players who could ad1ust their marketing strategy to meet changing demands o consumers. *ulinarian *ookware could serve its target markets by ocusing advertising e orts on their less expensive product lines, e.g. )20 and *20. 3otential threats to the cookware market include growing unemployment and prospects o higher in lation in the near uture. *urrent unemployment has climbed over 0"4 in !""- $see 5xhibit 0', which reduced the purchasing power o many US households. According to the U.S. 6ureau o 7abor Statistics, consumer price index $in lation' has grown pretty steadily in the recent years $see 5xhibit !'. Additionally, many economists predict higher in lation in the coming year $primarily due to increase in the monetary base, high de icits, and under unded liabilities' that will urther reduce the purchasing power o consumers i the wages and salaries do not keep up with the pace $+arks, 8ene , 9Staying *ool / /n lation #eats Up:, 6usiness ;eek, "6<!6<!""-, http=<<www.businessweek.com<smallbi.<content<1un!""-<sb!""-"6!6>-3%"!?.htm, accessed +arch 03, !"0"'. (hese potential threats could signal to *ulinarian *ookware that consumers might be more price&conscious in the near uture, hence stipulating the company to re&evaluate its marketing mix.

Exhibit 1

7abor @orce Statistics rom the *urrent 3opulation Survey

LNS14000000 (Seas) Unemployment Rate Unemployment rate Percent or rate 16 years and over

Series Id: Seasonally Adjusted Series title: Labor force status: Type of data: Age:

Year 2000 2001 2002 2003 2004 2005 2006 2007 200 200! 2010

Jan Feb Mar Apr May Jun Jul Aug Sep 4.0 4.1 4.0 3.8 4.0 4.0 4.0 4.1 3.9 4.2 4.2 4.3 4.4 4.3 4.5 4.6 4.9 5.0 5.7 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.6 4.5 4.4 4.5 4.4 4.6 4.6 4.6 4.7 5.0 4.8 5.1 5.0 5.4 5.5 5.8 6.1 6.2 7.7 8.2 8.6 8.9 9.4 9.5 9.4 9.7 9.8 9.7 9.7

Oct Nov 3.9 3.9 5.3 5.5 5.7 5.9 6.0 5.8 5.5 5.4 5.0 5.0 4.4 4.5 4.7 4.7 6.6 6.9 10.1 10.0

Dec 3.9 5.7 6.0 5.7 5.4 4.9 4.4 5.0 7.4 10.0

Source:"U.S. 6ureau o 7abor Statistics, )ata extracted on= +arch 03, !"0" http=<<data.bls.gov<3)A<servlet<SurveyButputServlet

Exhibit 2

*onsumer 3rice /ndex

Series Id: CUUR0000SA0 Not Seasonally Adjusted Area: U S c!ty avera"e Item: All !tems Base Period: 1#$%&$4'100

Source:"U.S. 6ureau o 7abor Statistics, )ata extracted on= +arch 03, !"0" http=<<data.bls.gov<3)A<servlet<SurveyButputServlet Cultural and Social values and trends A ew trends in the cultural and social areas have become visible in the recent years. (hese changes are and will continue to a ect the cookware market. )ue to increasing obesity epidemic in the country and rising healthcare costs, the nation as a whole has become more health conscious. (his change results in the emergence o numerous diet and health plans. +ost diets emphasi.e the importance o and reliance on home cooking as the means o achieving success ul results and as a conseCuence leading to a better health. (hus, as more consumers opt to cook more meals at home as part o a diet plan or other reason, the demand or cookware would increase. Also, consumers have become more environmentally riendly over the recent years. *ustomers continue to scrutini.e the Cuality and health ha.ards o many products, including cookware. *onsumers are increasingly becoming more interested in products that are exhibiting environment& riendly traits, and those products that are deemed or proven to be less harm ul to one,s health. (here is no new in ormation that could suggest that these trends will not continue into the uture. *ookware industry needs to recogni.e the act, and ocus on providing consumers with products that satis y their health and environmental standards. Political and legal issues (he political and legal environment in the cookware market is characteri.ed by the presence and en orcement o laws and regulations imposed on the use o certain materials in the cookware manu acturing process. (his is especially true when it comes to materials that are used in contact with ood. United States @ood and )rug

Administration $@)A' is responsible or regulating these materials. @)A conducts sa ety evaluations o all materials that are proposed by the industry or use in ood contact applications. Bne o the most reCuently cited investigations is the one related to sa ety o nonstick coatings used on cookware $53A Seeking 3@BA Deductions, "0<!?<!""6, http=<<yosemite.epa.gov<opa<admpress.ns <6%b? !d?E 3ee d!%?!?F"0?""?0F b < d0cb3a"F?6-FaaE%?!?F0"0" "6a bb-GBpen)ocument'. (he U.S. 5nvironmental 3rotection Agency $53A' is reviewing available in ormation on 3@BA, a chemical used in manu acture o luoropolymer resins which in turn are used in non& stick cookware sur ace applications. 53A is investigating sources o human exposure to these chemicals because o some claims o various harm to human,s health. 5ven though the studies o this chemical are still continuing, 53A Administrator Stephen 7. Hohnson stated that 9. . . to date 53A is not aware o any studies speci ically relating current levels o 3@BA exposure to human health e ects: $Short Statement on Ionstick *ookware Sa ety, *ookware +anu acturer,s Association $*+A', +ay !6, !""6 http=<<www.cookware.org<sa ety>statement.php, accessed +arch "?, !"0"'. /t is important or the cookware industry to continue ull cooperation $as has been the case' with @)A and 53A evaluations o all materials with Cuestionable sa ety records. @or *ulinarian, it is important to continue utili.ing sa e materials in the manu acturing process and promoting the Cuality o its products to satis y increasingly health conscious and environmentally aware consumers. Summary of environmental opportunities and threats As indicated above, signi icant opportunities and threats are loating in the uture o the cookware industry in the coming years. (hose companies that ind a way to capitali.e on those opportunities and to reduce potential threats, should be able to maintain or grow their revenues and expand their market share. Implications for strategy development *urrent state o the economy makes it di icult to predict how exactly consumers are going to react to the prospects o higher in lation or unemployment. / consumers continue to cut back on restaurant dining and pre er to prepare more meals themselves, it would present a clear opportunity to *ulinarian to capture more customers. #owever, is this also going to mean that due to decrease in disposable income consumers will try to seek value versus Cuality and brand imageJ / so, *ulinarian because o its ocus on higher&end premium priced goods, might ind itsel in a di icult situation where tradeo s might need to be made between its brand image and pricing<promotion. Bverall, current state o the environment and uture prospects will pose challenges to *ulinarian and will reCuire ad1ustments in company,s marketing mix.