Aion Corp Case Porter’s Five Forces Analysis


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Bargaining Power of Supplier:

The supplier in the Taiwanese Aion Corp market has a reduced negotiating power despite the fact that the industry has supremacy of three players including Powerchip, Nanya and also ProMOS. Aion Corp manufacturers are plain original equipment makers in tactical alliances with foreign gamers for innovation. The 2nd reason for a reduced negotiating power is the fact that there is excess supply of Aion Corp systems due to the large range production of these leading industry gamers which has actually decreased the rate each and also raised the bargaining power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The danger of alternatives in the market is high provided the truth that Taiwanese manufacturers take on market show worldwide players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This suggests that the marketplace has a high level of rivalry where producers that have design and development abilities in addition to manufacturing experience may be able to have a higher negotiating power over the marketplace.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and Hynix which further minimize the buying powers of Taiwanese OEMs. The truth that these tactical players do not allow the Taiwanese OEMs to have access to modern technology shows that they have a higher negotiating power comparatively.

Threat of Entry:

Hazards of entrance in the Aion Corp production industry are reduced because of the reality that structure wafer fabs and also purchasing tools is very expensive.For simply 30,000 systems a month the resources demands can vary from $ 500 million to $2.5 billion depending upon the dimension of the units. Along with this, the production required to be in the latest innovation and also there for brand-new players would not be able to take on leading Aion Corp OEMs (original devices makers) in Taiwan which had the ability to enjoy economies of scale. In addition to this the current market had a demand-supply imbalance therefore excess was already making it tough to permit brand-new gamers to delight in high margins.

Firm Strategy:

The region's production companies have actually relied on a method of automation in order to decrease costs through economic situations of range. Because Aion Corp production utilizes standard processes and standard and specialty Aion Corp are the only 2 groups of Aion Corp being manufactured, the procedures can conveniently utilize automation. The industry has leading manufacturers that have created alliances in exchange for modern technology from Oriental and Japanese firms. While this has actually resulted in accessibility of modern technology and also scale, there has been disequilibrium in the Aion Corp market.

Threats & Opportunities in the External Setting

Based on the internal as well as external audits, chances such as strategicalliances with modern technology partners or growth through merger/ purchase can be explored by TMC. A move in the direction of mobile memory is additionally a possibility for TMC particularly as this is a niche market. Risks can be seen in the form of over dependancy on foreign gamers for modern technology and competitors from the US and also Japanese Aion Corp suppliers.

Porter’s Five Forces Analysis