Phon Tech Corporation Case Porter’s Five Forces Analysis


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Phon Tech Corporation Case Study Analysis

Bargaining Power of Supplier:

The provider in the Taiwanese Phon Tech Corporation industry has a reduced negotiating power although that the market has dominance of 3 gamers including Powerchip, Nanya and ProMOS. Phon Tech Corporation producers are simple initial equipment suppliers in calculated partnerships with foreign gamers for technology. The second reason for a low negotiating power is the truth that there is excess supply of Phon Tech Corporation devices as a result of the big scale production of these dominant market gamers which has actually reduced the cost per unit and also boosted the negotiating power of the customer.

Threat of Substitutes & Degree of Rivalry:

The danger of replacements out there is high provided the reality that Taiwanese makers take on market share with worldwide gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung as well as Fujitsu. This shows that the marketplace has a high level of competition where producers that have design and development capacities in addition to making know-how may be able 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 further decrease the buying powers of Taiwanese OEMs. The fact that these tactical gamers do not allow the Taiwanese OEMs to have accessibility to modern technology indicates that they have a higher negotiating power relatively.

Threat of Entry:

Hazards of access in the Phon Tech Corporation production sector are reduced due to the reality that structure wafer fabs as well as acquiring devices is highly expensive.For simply 30,000 units a month the resources requirements can vary from $ 500 million to $2.5 billion depending on the size of the devices. The manufacturing needed to be in the most recent modern technology and there for new gamers would not be able to complete with dominant Phon Tech Corporation OEMs (original devices suppliers) in Taiwan which were able to appreciate economic climates of range. Along with this the present market had a demand-supply imbalance therefore oversupply was already making it challenging to permit new gamers to appreciate high margins.

Firm Strategy:

The region's production firms have relied upon a method of automation in order to lower costs with economic climates of scale. Given that Phon Tech Corporation manufacturing makes use of common processes and conventional and also specialty Phon Tech Corporation are the only 2 classifications of Phon Tech Corporation being made, the processes can conveniently use mass production. The sector has dominant suppliers that have actually developed alliances in exchange for innovation from Korean as well as Japanese firms. While this has actually resulted in accessibility of innovation and also scale, there has actually been disequilibrium in the Phon Tech Corporation industry.

Threats & Opportunities in the External Environment

As per the inner and outside audits, chances such as strategicalliances with modern technology companions or development via merging/ purchase can be discovered by TMC. Along with this, an action towards mobile memory is likewise a possibility for TMC specifically as this is a particular niche market. Risks can be seen in the kind of over dependancy on international players for innovation and also competition from the US as well as Japanese Phon Tech Corporation manufacturers.

Porter’s Five Forces Analysis