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CASE ANALYSIS

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Lulucom Case Study Solution

Doorperson's diamond structure has actually highlighted the fact that Lulucom can absolutely leverage on Taiwan's production expertise as well as scale production. At the same time the company has the advantage of being in an area where the government is promoting the DRAM industry via individual intervention as well as advancement of framework while chance events have actually reduced leads of direct competition from international gamers. Lulucom can certainly go with a sustainable affordable advantage in the Taiwanese DRAM market by embracing approaches which can lower the risk of external factors as well as make use of the factors of one-upmanship.

It has been discussed throughout the interior and also outside analysis just how these critical partnerships have been based upon sharing of modern technology as well as capability. The tactical alliances between the DRAM manufacturers in Taiwan as well as international innovation providers in Japan and US have resulted in both and favorable ramifications for the DRAM industry in Taiwan.

As far as the favorable effects of the tactical partnerships are concerned, the Taiwanese DRAM makers got immediate accessibility to DRAM technology without having to buy R&D on their own. It can be seen just how the Taiwanese market share in the DRAM sector is still extremely small and also if the neighborhood players had to purchase innovation growth by themselves, it may have taken them long to obtain close to Japanese as well as US gamers. The 2nd positive ramification has been the reality that it has actually enhanced efficiency levels in the DRAM sector particularly as range in manufacturing has actually enabled more units to be generated at each plant.

However, there have actually been a number of unfavorable effects of these partnerships too. Firstly the dependence on US and Japanese gamers has boosted so regional players hesitate to select financial investment in style and advancement. The market has actually had to encounter excess supply of DRAM units which has actually decreased the per system price of each system. Not just has it brought about reduced margins for the suppliers, it has brought the industry to a placement where DRAM suppliers have actually had to rely on city governments to get their financial scenarios ironed out.

Regarding the specific responses of neighborhood DRAM firms are worried, these calculated alliances have directly affected the method each firm is reacting to the appearance of Lulucom. Although Lulucom has actually been the government's campaign in terms of making the DRAM sector autonomous, market players are withstanding the move to settle as a result of these strategic alliances.

Lulucom may not be able to profit from Elpida's technology since the firm is now a straight rival to Powerchip and the last is unwilling to share the modern technology with Lulucom. In the very same fashion Nanya's critical partnership with Micron is coming in the method of the latter company's rate of interest in sharing innovation with Lulucom.