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Prestige Telephone Co Chinese Version Case Porter’s Five Forces Analysis

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Prestige Telephone Co Chinese Version Case Study Solution

Bargaining Power of Supplier:

The provider in the Taiwanese Prestige Telephone Co Chinese Version sector has a reduced bargaining power although that the sector has dominance of 3 players consisting of Powerchip, Nanya and also ProMOS. Prestige Telephone Co Chinese Version makers are plain original tools manufacturers in tactical partnerships with international gamers in exchange for modern technology. The second factor for a reduced bargaining power is the fact that there is excess supply of Prestige Telephone Co Chinese Version units because of the large range production of these leading market players which has actually lowered the price per unit and also boosted the negotiating power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The risk of substitutes in the marketplace is high provided the reality that Taiwanese makers compete with market show to global players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This indicates that the marketplace has a high level of rivalry where producers that have style as well as development capabilities along with producing expertise might be able to have a higher bargaining power over the market.

Bargaining Power of Buyer:

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

Threat of Entry:

Threats of entrance in the Prestige Telephone Co Chinese Version manufacturing industry are low due to the reality that building wafer fabs as well as acquiring equipment is very expensive.For just 30,000 units a month the resources needs can vary from $ 500 million to $2.5 billion relying on the dimension of the systems. The manufacturing required to be in the most recent innovation as well as there for brand-new gamers would not be able to compete with leading Prestige Telephone Co Chinese Version OEMs (original equipment suppliers) in Taiwan which were able to take pleasure in economic climates of range. Along with this the existing market had a demand-supply inequality therefore surplus was currently making it hard to permit new gamers to delight in high margins.

Firm Strategy:

The region's manufacturing companies have counted on a strategy of automation in order to decrease prices with economic climates of scale. Considering that Prestige Telephone Co Chinese Version production makes use of typical processes and standard and also specialty Prestige Telephone Co Chinese Version are the only 2 categories of Prestige Telephone Co Chinese Version being produced, the processes can easily make use of mass production. The market has dominant producers that have formed alliances in exchange for technology from Korean and Japanese companies. While this has actually led to schedule of technology as well as scale, there has actually been disequilibrium in the Prestige Telephone Co Chinese Version industry.

Threats & Opportunities in the External Setting

As per the internal and external audits, chances such as strategicalliances with innovation companions or development via merger/ procurement can be explored by TMC. Along with this, an action towards mobile memory is additionally an opportunity for TMC particularly as this is a specific niche market. Dangers can be seen in the kind of over reliance on international gamers for modern technology and competition from the US and also Japanese Prestige Telephone Co Chinese Version producers.

Porter’s Five Forces Analysis