Bargaining Power of Supplier:
The provider in the Taiwanese Google Glass sector has a low negotiating power despite the fact that the sector has supremacy of three gamers consisting of Powerchip, Nanya and ProMOS. Google Glass manufacturers are mere original tools suppliers in calculated partnerships with foreign gamers for innovation. The 2nd reason for a low negotiating power is the fact that there is excess supply of Google Glass devices as a result of the big range manufacturing of these leading sector gamers which has actually reduced the price per unit and also raised the bargaining power of the customer.
Threat of Substitutes & Degree of Rivalry:
The risk of substitutes out there is high given the reality that Taiwanese producers take on market show to international gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung as well as Fujitsu. This indicates that the marketplace has a high degree of rivalry where makers that have layout as well as advancement capabilities along with producing know-how might have the ability to have a greater bargaining power over the marketplace.
Bargaining Power of Buyer:
The market is dominated by players like Micron, Elpida, Samsung and Hynix which further reduce the purchasing power of Taiwanese OEMs. The fact that these strategic gamers do not enable the Taiwanese OEMs to have access to technology suggests that they have a higher bargaining power relatively.
Threat of Entry:
Dangers of access in the Google Glass manufacturing market are low owing to the truth that building wafer fabs and buying devices is very expensive.For simply 30,000 devices a month the funding requirements can vary from $ 500 million to $2.5 billion depending upon the dimension of the units. The production needed to be in the most current technology and there for new gamers would certainly not be able to compete with leading Google Glass OEMs (initial equipment makers) in Taiwan which were able to delight in economies of range. Along with this the current market had a demand-supply imbalance and so excess was already making it difficult to allow brand-new players to delight in high margins.
Firm Strategy:
The area's manufacturing companies have actually relied upon a method of automation in order to decrease costs via economies of scale. Because Google Glass production makes use of standard procedures and standard and specialized Google Glass are the only two groups of Google Glass being produced, the procedures can easily utilize mass production. The market has dominant suppliers that have created alliances in exchange for technology from Korean and also Japanese firms. While this has led to availability of technology as well as range, there has actually been disequilibrium in the Google Glass market.
Threats & Opportunities in the External Environment
As per the inner and also outside audits, possibilities such as strategicalliances with technology companions or growth through merger/ acquisition can be checked out by TMC. Along with this, an action in the direction of mobile memory is likewise a possibility for TMC specifically as this is a particular niche market. Risks can be seen in the kind of over reliance on foreign gamers for innovation and competition from the US as well as Japanese Google Glass manufacturers.
Porter’s Five Forces Analysis
