Microsoft Xbox Division Case Porter’s Five Forces Analysis


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Microsoft Xbox Division Case Study Analysis

Bargaining Power of Supplier:

The supplier in the Taiwanese Microsoft Xbox Division market has a low bargaining power despite the fact that the sector has supremacy of 3 players consisting of Powerchip, Nanya and also ProMOS. Microsoft Xbox Division suppliers are plain original devices producers in strategic alliances with foreign players in exchange for innovation. The second reason for a reduced bargaining power is the fact that there is excess supply of Microsoft Xbox Division systems because of the huge scale manufacturing of these leading market gamers which has actually decreased the price each and also raised the negotiating power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The danger of replacements on the market is high provided the truth that Taiwanese makers take on market show worldwide gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This indicates that the market has a high level of rivalry where producers that have layout and advancement abilities in addition to producing expertise might be able to have a greater bargaining power over the market.

Bargaining Power of Buyer:

The marketplace is controlled by players like Micron, Elpida, Samsung as well as Hynix which better lower the buying powers of Taiwanese OEMs. The fact that these strategic players do not permit the Taiwanese OEMs to have accessibility to technology shows that they have a greater negotiating power relatively.

Threat of Entry:

Risks of entry in the Microsoft Xbox Division production industry are reduced due to the reality that building wafer fabs and also purchasing equipment is highly expensive.For just 30,000 systems a month the capital needs can range from $ 500 million to $2.5 billion relying on the dimension of the systems. In addition to this, the manufacturing needed to be in the most recent modern technology as well as there for brand-new gamers would certainly not have the ability to compete with dominant Microsoft Xbox Division OEMs (original equipment makers) in Taiwan which had the ability to appreciate economic climates of range. Along with this the current market had a demand-supply imbalance and so excess was currently making it challenging to allow new gamers to take pleasure in high margins.

Firm Strategy:

Since Microsoft Xbox Division manufacturing utilizes basic processes and common and also specialized Microsoft Xbox Division are the only 2 groups of Microsoft Xbox Division being manufactured, the processes can easily make usage of mass manufacturing. While this has actually led to availability of modern technology as well as scale, there has actually been disequilibrium in the Microsoft Xbox Division sector.

Threats & Opportunities in the External Atmosphere

According to the interior as well as exterior audits, chances such as strategicalliances with modern technology partners or growth via merger/ purchase can be discovered by TMC. In addition to this, a step 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 form of over dependence on international gamers for technology and competitors from the United States as well as Japanese Microsoft Xbox Division makers.

Porter’s Five Forces Analysis