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Principal Protected Equity Linked Note Case Porter’s Five Forces Analysis

CASE SOLUTION

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Principal Protected Equity Linked Note Case Study Analysis

Bargaining Power of Supplier:

The distributor in the Taiwanese Principal Protected Equity Linked Note sector has a low bargaining power despite the fact that the sector has dominance of three players including Powerchip, Nanya as well as ProMOS. Principal Protected Equity Linked Note makers are simple initial equipment suppliers in calculated alliances with foreign players in exchange for technology. The 2nd reason for a low negotiating power is the reality that there is excess supply of Principal Protected Equity Linked Note systems due to the large range manufacturing of these leading market gamers which has actually reduced the price per unit and raised the bargaining power of the customer.

Threat of Substitutes & Degree of Rivalry:

The threat of substitutes in the marketplace is high provided the truth that Taiwanese suppliers take on market show international players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This suggests that the market has a high level of rivalry where suppliers that have layout and also advancement capabilities together with making expertise may be able to have a greater negotiating power over the market.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and also Hynix which further reduce the buying powers of Taiwanese OEMs. The reality that these tactical gamers do not enable the Taiwanese OEMs to have accessibility to modern technology indicates that they have a higher negotiating power fairly.

Threat of Entry:

Hazards of access in the Principal Protected Equity Linked Note production industry are low due to the reality that structure wafer fabs as well as buying tools is extremely expensive.For simply 30,000 devices a month the capital needs can range from $ 500 million to $2.5 billion relying on the dimension of the devices. The manufacturing needed to be in the newest modern technology as well as there for new gamers would not be able to compete with leading Principal Protected Equity Linked Note OEMs (original equipment makers) in Taiwan which were able to appreciate economies of scale. The existing market had a demand-supply discrepancy and also so excess was currently making it hard to allow new gamers to enjoy high margins.

Firm Strategy:

Since Principal Protected Equity Linked Note manufacturing makes use of common procedures as well as typical and specialized Principal Protected Equity Linked Note are the only two classifications of Principal Protected Equity Linked Note being made, the procedures can easily make usage of mass production. While this has led to schedule of modern technology and also scale, there has actually been disequilibrium in the Principal Protected Equity Linked Note sector.

Threats & Opportunities in the External Atmosphere

As per the internal and also exterior audits, possibilities such as strategicalliances with technology partners or development with merging/ acquisition can be explored by TMC. A relocation towards mobile memory is additionally a possibility for TMC particularly as this is a particular niche market. Threats can be seen in the type of over dependancy on international gamers for innovation as well as competition from the US as well as Japanese Principal Protected Equity Linked Note makers.

Porter’s Five Forces Analysis