Fortress Investment Group Case Porter’s Five Forces Analysis


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Fortress Investment Group Case Study Analysis

Bargaining Power of Supplier:

The vendor in the Taiwanese Fortress Investment Group industry has a low bargaining power despite the fact that the sector has supremacy of three gamers consisting of Powerchip, Nanya and also ProMOS. Fortress Investment Group makers are mere initial devices producers in tactical partnerships with foreign gamers in exchange for innovation. The 2nd factor for a reduced bargaining power is the reality that there is excess supply of Fortress Investment Group units as a result of the big scale production of these dominant industry gamers which has reduced the price each and also raised the bargaining power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The threat of alternatives in the market is high given the reality that Taiwanese suppliers compete with market show to international gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This suggests that the marketplace has a high level of competition where makers that have style as well as advancement capacities together with producing knowledge may be able to have a higher negotiating power over the market.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and Hynix which additionally lower the buying powers of Taiwanese OEMs. The reality that these calculated gamers do not permit the Taiwanese OEMs to have accessibility to technology indicates that they have a greater bargaining power relatively.

Threat of Entry:

Hazards of entrance in the Fortress Investment Group manufacturing sector are low due to the truth that structure wafer fabs and purchasing tools is highly expensive.For simply 30,000 systems a month the capital demands can range from $ 500 million to $2.5 billion relying on the size of the units. The production needed to be in the latest innovation and also there for brand-new gamers would certainly not be able to contend with dominant Fortress Investment Group OEMs (original devices suppliers) in Taiwan which were able to appreciate economic situations of scale. The existing market had a demand-supply inequality and also so excess was currently making it difficult to permit brand-new players to appreciate high margins.

Firm Strategy:

The area's manufacturing companies have depended on a method of mass production in order to lower costs through economic climates of scale. Considering that Fortress Investment Group manufacturing utilizes typical procedures and standard and also specialty Fortress Investment Group are the only two classifications of Fortress Investment Group being made, the processes can easily make use of automation. The market has dominant suppliers that have actually created partnerships for technology from Korean as well as Japanese firms. While this has led to schedule of technology as well as scale, there has been disequilibrium in the Fortress Investment Group market.

Threats & Opportunities in the External Atmosphere

Based on the inner as well as external audits, opportunities such as strategicalliances with technology companions or development via merger/ procurement can be checked out by TMC. A step in the direction of mobile memory is additionally an opportunity for TMC specifically as this is a particular niche market. Threats can be seen in the form of over dependence on international gamers for technology and also competition from the US and Japanese Fortress Investment Group makers.

Porter’s Five Forces Analysis