Penn West Petroleum Ltd Case Porter’s Five Forces Analysis


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Penn West Petroleum Ltd Case Study Solution

Bargaining Power of Supplier:

The provider in the Taiwanese Penn West Petroleum Ltd sector has a low bargaining power although that the sector has supremacy of three gamers including Powerchip, Nanya as well as ProMOS. Penn West Petroleum Ltd producers are simple initial tools manufacturers in calculated alliances with foreign players in exchange for innovation. The second factor for a low negotiating power is the reality that there is excess supply of Penn West Petroleum Ltd systems due to the big range manufacturing of these leading sector gamers which has decreased the price per unit and also increased the bargaining power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The risk of substitutes on the market is high provided the fact that Taiwanese producers compete with market show to global gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung as well as Fujitsu. This indicates that the market has a high level of rivalry where producers that have layout and growth capabilities in addition to making knowledge might have the ability to have a higher negotiating power over the marketplace.

Bargaining Power of Buyer:

The marketplace is dominated by players like Micron, Elpida, Samsung as well as Hynix which better reduce the buying powers of Taiwanese OEMs. The truth that these critical gamers do not permit the Taiwanese OEMs to have access to innovation indicates that they have a greater bargaining power relatively.

Threat of Entry:

Hazards of entrance in the Penn West Petroleum Ltd production market are reduced owing to the fact that structure wafer fabs and also purchasing tools is extremely expensive.For just 30,000 units a month the resources needs can vary from $ 500 million to $2.5 billion depending on the dimension of the systems. The manufacturing needed to be in the most current modern technology as well as there for brand-new gamers would certainly not be able to compete with leading Penn West Petroleum Ltd OEMs (original tools makers) in Taiwan which were able to appreciate economies of scale. Along with this the existing market had a demand-supply discrepancy and so excess was currently making it hard to permit brand-new gamers to appreciate high margins.

Firm Strategy:

The area's production firms have depended on a technique of automation in order to decrease expenses via economic climates of range. Considering that Penn West Petroleum Ltd production makes use of basic processes and basic and specialized Penn West Petroleum Ltd are the only 2 classifications of Penn West Petroleum Ltd being manufactured, the procedures can easily take advantage of mass production. The sector has leading suppliers that have formed alliances in exchange for technology from Korean and also Japanese companies. While this has actually resulted in availability of modern technology and also range, there has been disequilibrium in the Penn West Petroleum Ltd industry.

Threats & Opportunities in the External Environment

Based on the inner as well as exterior audits, chances such as strategicalliances with modern technology companions or development via merging/ purchase can be discovered by TMC. A step towards mobile memory is also an opportunity for TMC specifically as this is a niche market. Hazards can be seen in the kind of over dependence on international gamers for innovation and also competition from the United States and also Japanese Penn West Petroleum Ltd makers.

Porter’s Five Forces Analysis