Koffman Corporation Case Porter’s Five Forces Analysis


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Koffman Corporation Case Study Solution

Bargaining Power of Supplier:

The provider in the Taiwanese Koffman Corporation sector has a reduced bargaining power despite the fact that the sector has dominance of 3 players including Powerchip, Nanya as well as ProMOS. Koffman Corporation producers are simple initial devices makers in strategic partnerships with international gamers for innovation. The 2nd factor for a low bargaining power is the fact that there is excess supply of Koffman Corporation units due to the large range production of these leading market gamers which has actually decreased the cost each as well as boosted the bargaining power of the customer.

Threat of Substitutes & Degree of Rivalry:

The threat of replacements on the market is high given the reality that Taiwanese manufacturers take on market show to global gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung as well as Fujitsu. This suggests that the marketplace has a high degree of competition where producers that have layout and growth capabilities along with manufacturing knowledge might be able to have a higher negotiating power over the market.

Bargaining Power of Buyer:

The marketplace is controlled by players like Micron, Elpida, Samsung and Hynix which further reduce the buying powers of Taiwanese OEMs. The truth that these tactical gamers do not enable the Taiwanese OEMs to have accessibility to modern technology suggests that they have a higher negotiating power fairly.

Threat of Entry:

Hazards of entry in the Koffman Corporation production market are low due to the truth that building wafer fabs and purchasing devices is highly expensive.For simply 30,000 devices a month the funding requirements can range from $ 500 million to $2.5 billion relying on the size of the devices. In addition to this, the production required to be in the most recent modern technology as well as there for brand-new gamers would certainly not be able to compete with dominant Koffman Corporation OEMs (initial equipment manufacturers) in Taiwan which were able to take pleasure in economic situations of scale. The current market had a demand-supply imbalance and also so oversupply was already making it difficult to allow brand-new gamers to delight in high margins.

Firm Strategy:

The region's manufacturing companies have actually counted on a method of mass production in order to lower expenses via economies of range. Given that Koffman Corporation production makes use of typical procedures as well as typical and specialized Koffman Corporation are the only 2 groups of Koffman Corporation being manufactured, the processes can conveniently utilize mass production. The market has dominant suppliers that have formed partnerships for innovation from Oriental as well as Japanese companies. While this has led to availability of innovation and also scale, there has actually been disequilibrium in the Koffman Corporation industry.

Threats & Opportunities in the External Environment

According to the interior and exterior audits, chances such as strategicalliances with technology companions or development through merging/ procurement can be explored by TMC. In addition to this, an action towards mobile memory is additionally an opportunity for TMC particularly as this is a specific niche market. Hazards can be seen in the type of over dependancy on international gamers for modern technology and competition from the US and also Japanese Koffman Corporation manufacturers.

Porter’s Five Forces Analysis