Bargaining Power of Supplier:
The distributor in the Taiwanese Providian Financial Corporation market has a low negotiating power although that the industry has supremacy of three players consisting of Powerchip, Nanya and ProMOS. Providian Financial Corporation manufacturers are mere original equipment suppliers in strategic alliances with international gamers for technology. The second factor for a reduced bargaining power is the reality that there is excess supply of Providian Financial Corporation devices due to the large range production of these dominant industry players which has decreased the rate each and also raised the bargaining power of the buyer.
Threat of Substitutes & Degree of Rivalry:
The risk of substitutes in the market is high given the fact that Taiwanese suppliers take on market show to worldwide players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This suggests that the market has a high level of competition where producers that have layout as well as growth capacities together with making knowledge might be able to have a greater negotiating power over the market.
Bargaining Power of Buyer:
The market is controlled by gamers like Micron, Elpida, Samsung and Hynix which further reduce the buying powers of Taiwanese OEMs. The reality that these tactical gamers do not permit the Taiwanese OEMs to have accessibility to modern technology suggests that they have a higher bargaining power comparatively.
Threat of Entry:
Dangers of entry in the Providian Financial Corporation manufacturing market are low owing to the truth that building wafer fabs as well as buying devices is highly expensive.For just 30,000 devices a month the resources needs can range from $ 500 million to $2.5 billion depending on the dimension of the units. In addition to this, the production needed to be in the latest innovation and there for new players would certainly not be able to compete with dominant Providian Financial Corporation OEMs (initial equipment manufacturers) in Taiwan which had the ability to delight in economic climates of scale. Along with this the current market had a demand-supply imbalance and so surplus was currently making it hard to allow brand-new gamers to delight in high margins.
Firm Strategy:
Because Providian Financial Corporation production makes use of standard processes and typical and also specialty Providian Financial Corporation are the only two groups of Providian Financial Corporation being made, the procedures can easily make usage of mass production. While this has led to schedule of technology and also scale, there has been disequilibrium in the Providian Financial Corporation market.
Threats & Opportunities in the External Environment
As per the internal and also external audits, chances such as strategicalliances with technology partners or development via merger/ acquisition can be discovered by TMC. In addition to this, a step towards mobile memory is also a possibility for TMC specifically as this is a specific niche market. Risks can be seen in the kind of over dependence on foreign gamers for technology and also competition from the US and Japanese Providian Financial Corporation makers.
Porter’s Five Forces Analysis
