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J C Penney Company Case Porter’s Five Forces Analysis

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J C Penney Company Case Study Solution

Bargaining Power of Supplier:

The provider in the Taiwanese J C Penney Company sector has a reduced negotiating power although that the industry has supremacy of three gamers including Powerchip, Nanya and also ProMOS. J C Penney Company producers are simple original equipment producers in tactical alliances with foreign players for innovation. The second reason for a low bargaining power is the fact that there is excess supply of J C Penney Company units due to the large range manufacturing of these leading market players which has actually reduced the rate each and boosted the negotiating power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The threat of replacements out there is high given the fact that Taiwanese producers take on market show global players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This suggests that the market has a high level of competition where makers that have design and also advancement abilities together with making competence may have the ability to have a higher negotiating power over the marketplace.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and also Hynix which better decrease the buying powers of Taiwanese OEMs. The reality that these tactical gamers do not permit the Taiwanese OEMs to have access to innovation indicates that they have a greater bargaining power somewhat.

Threat of Entry:

Hazards of entry in the J C Penney Company production sector are low due to the fact that structure wafer fabs and also buying equipment is very expensive.For just 30,000 units a month the resources requirements can vary from $ 500 million to $2.5 billion depending upon the size of the devices. Along with this, the production required to be in the current innovation and also there for new gamers would not be able to compete with leading J C Penney Company OEMs (initial devices makers) in Taiwan which were able to take pleasure in economies of scale. The present market had a demand-supply inequality and also so excess was currently making it difficult to permit new gamers to take pleasure in high margins.

Firm Strategy:

The area's production companies have actually depended on an approach of automation in order to reduce prices through economic climates of range. Considering that J C Penney Company production makes use of standard processes as well as common and specialty J C Penney Company are the only two categories of J C Penney Company being manufactured, the processes can conveniently take advantage of mass production. The market has dominant manufacturers that have actually created partnerships in exchange for technology from Korean and also Japanese companies. While this has actually caused availability of innovation as well as range, there has been disequilibrium in the J C Penney Company industry.

Threats & Opportunities in the External Environment

According to the internal as well as exterior audits, opportunities such as strategicalliances with modern technology partners or development through merging/ purchase can be discovered by TMC. Along with this, a step towards mobile memory is likewise an opportunity for TMC especially as this is a particular niche market. Risks can be seen in the type of over dependence on foreign gamers for modern technology and also competitors from the United States and Japanese J C Penney Company producers.

Porter’s Five Forces Analysis