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Athleta Case Porter’s Five Forces Analysis

CASE ANALYSIS

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Athleta Case Study Analysis

Bargaining Power of Supplier:

The supplier in the Taiwanese Athleta industry has a low bargaining power despite the fact that the industry has dominance of 3 gamers consisting of Powerchip, Nanya as well as ProMOS. Athleta makers are mere original equipment manufacturers in strategic alliances with international gamers for technology. The second reason for a reduced negotiating power is the fact that there is excess supply of Athleta units because of the big range manufacturing of these dominant industry gamers which has reduced the rate per unit as well as enhanced the negotiating power of the customer.

Threat of Substitutes & Degree of Rivalry:

The risk of replacements in the marketplace is high given the reality that Taiwanese makers compete with market show to international players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This shows that the marketplace has a high degree of competition where makers that have style as well as growth capabilities along with manufacturing experience may have the ability to have a greater negotiating power over the marketplace.

Bargaining Power of Buyer:

The marketplace is controlled by players like Micron, Elpida, Samsung and also Hynix which further lower the buying powers of Taiwanese OEMs. The truth that these tactical gamers do not enable the Taiwanese OEMs to have access to technology suggests that they have a greater bargaining power somewhat.

Threat of Entry:

Threats of entry in the Athleta manufacturing industry are low due to the truth that structure wafer fabs and purchasing equipment is very expensive.For just 30,000 units a month the capital requirements can range from $ 500 million to $2.5 billion depending upon the size of the systems. The production required to be in the most recent technology and also there for brand-new gamers would not be able to compete with dominant Athleta OEMs (initial tools producers) in Taiwan which were able to appreciate economic climates of scale. The present market had a demand-supply inequality and so oversupply was currently making it hard to allow brand-new gamers to enjoy high margins.

Firm Strategy:

The area's production companies have relied upon a strategy of mass production in order to reduce prices with economies of scale. Considering that Athleta manufacturing makes use of standard processes and basic and also specialty Athleta are the only two groups of Athleta being made, the procedures can conveniently use automation. The industry has leading producers that have actually formed alliances for innovation from Oriental and Japanese companies. While this has brought about schedule of innovation and range, there has been disequilibrium in the Athleta market.

Threats & Opportunities in the External Setting

According to the interior and also external audits, opportunities such as strategicalliances with technology companions or development with merging/ acquisition can be discovered by TMC. A relocation towards mobile memory is also an opportunity for TMC particularly as this is a specific niche market. Dangers can be seen in the kind of over reliance on foreign gamers for technology as well as competitors from the US and also Japanese Athleta producers.

Porter’s Five Forces Analysis