Compusa Case Porter’s Five Forces Analysis


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Compusa Case Study Solution

Bargaining Power of Supplier:

The vendor in the Taiwanese Compusa market has a low bargaining power although that the industry has dominance of three gamers consisting of Powerchip, Nanya as well as ProMOS. Compusa producers are simple original tools makers in calculated alliances with international gamers in exchange for modern technology. The 2nd factor for a low bargaining power is the fact that there is excess supply of Compusa devices as a result of the huge range manufacturing of these leading sector gamers which has decreased the rate each and also enhanced the bargaining power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The risk of alternatives out there is high provided the fact that Taiwanese suppliers take on market show to international players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This indicates that the market has a high level of rivalry where manufacturers that have design as well as growth abilities in addition to making proficiency may have the ability to have a higher negotiating power over the market.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and also Hynix which even more reduce the buying powers of Taiwanese OEMs. The fact that these tactical gamers do not allow the Taiwanese OEMs to have accessibility to technology shows that they have a greater bargaining power fairly.

Threat of Entry:

Hazards of entry in the Compusa production industry are low due to the truth that structure wafer fabs and acquiring tools is highly expensive.For just 30,000 systems a month the capital demands can vary from $ 500 million to $2.5 billion depending upon the dimension of the units. The manufacturing required to be in the newest modern technology and also there for new gamers would certainly not be able to contend with dominant Compusa OEMs (original devices makers) in Taiwan which were able to delight in economic climates of range. The present market had a demand-supply discrepancy and also so excess was already making it hard to allow new gamers to take pleasure in high margins.

Firm Strategy:

Since Compusa production utilizes standard procedures and standard and also specialized Compusa are the only two categories of Compusa being manufactured, the processes can conveniently make use of mass manufacturing. While this has led to availability of innovation and also scale, there has actually been disequilibrium in the Compusa industry.

Threats & Opportunities in the External Environment

According to the inner as well as exterior audits, opportunities such as strategicalliances with modern technology companions or growth via merger/ acquisition can be discovered by TMC. A relocation in the direction of mobile memory is additionally an opportunity for TMC specifically as this is a specific niche market. Risks can be seen in the kind of over dependence on foreign gamers for innovation as well as competitors from the United States and also Japanese Compusa producers.

Porter’s Five Forces Analysis