Menu

Magna International Inc B Case Porter’s Five Forces Analysis

CASE ANALYSIS

Home >> Harvard >> Magna International Inc B >> Porters Analysis

Magna International Inc B Case Study Help

Bargaining Power of Supplier:

The distributor in the Taiwanese Magna International Inc B sector has a reduced negotiating power although that the market has supremacy of 3 gamers including Powerchip, Nanya and also ProMOS. Magna International Inc B suppliers are mere original devices manufacturers in tactical alliances with international players for technology. The second reason for a low bargaining power is the reality that there is excess supply of Magna International Inc B devices as a result of the big scale production of these leading sector players which has decreased the cost each and also raised the bargaining power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The risk of alternatives on the market is high offered the fact that Taiwanese makers compete with market show to global players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This suggests that the marketplace has a high degree of rivalry where producers that have layout and also growth capabilities along with manufacturing knowledge may have the ability to have a greater bargaining power over the market.

Bargaining Power of Buyer:

The marketplace is dominated by gamers like Micron, Elpida, Samsung and Hynix which additionally decrease the purchasing power of Taiwanese OEMs. The truth that these critical gamers do not enable the Taiwanese OEMs to have accessibility to technology indicates that they have a greater bargaining power fairly.

Threat of Entry:

Dangers of access in the Magna International Inc B manufacturing sector are reduced due to the reality that building wafer fabs and buying equipment is extremely expensive.For simply 30,000 systems a month the capital demands can range from $ 500 million to $2.5 billion depending upon the dimension of the devices. In addition to this, the production needed to be in the latest innovation and there for new gamers would certainly not have the ability to take on dominant Magna International Inc B OEMs (initial devices manufacturers) in Taiwan which had the ability to appreciate economic situations of range. Along with this the current market had a demand-supply imbalance therefore oversupply was currently making it hard to permit brand-new gamers to enjoy high margins.

Firm Strategy:

The region's production companies have counted on a method of mass production in order to reduce prices with economic climates of range. Since Magna International Inc B manufacturing uses conventional processes as well as basic and also specialty Magna International Inc B are the only 2 categories of Magna International Inc B being manufactured, the processes can easily utilize mass production. The sector has leading suppliers that have created partnerships for technology from Oriental and Japanese companies. While this has led to availability of innovation as well as scale, there has been disequilibrium in the Magna International Inc B market.

Threats & Opportunities in the External Environment

As per the inner as well as exterior audits, chances such as strategicalliances with technology companions or growth via merger/ procurement can be discovered by TMC. A move in the direction of mobile memory is also a possibility for TMC particularly as this is a particular niche market. Threats can be seen in the type of over dependence on international gamers for innovation as well as competitors from the US and also Japanese Magna International Inc B producers.

Porter’s Five Forces Analysis