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Revenue Recognition For A Services Contract Case Porter’s Five Forces Analysis

CASE SOLUTION

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Revenue Recognition For A Services Contract Case Study Solution

Bargaining Power of Supplier:

The supplier in the Taiwanese Revenue Recognition For A Services Contract market has a reduced negotiating power despite the fact that the market has supremacy of three players including Powerchip, Nanya as well as ProMOS. Revenue Recognition For A Services Contract makers are simple initial equipment makers in strategic alliances with international gamers for technology. The 2nd factor for a reduced bargaining power is the reality that there is excess supply of Revenue Recognition For A Services Contract systems as a result of the large range manufacturing of these leading market gamers which has lowered the cost per unit and also boosted the bargaining power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The hazard of substitutes in the marketplace is high given the fact that Taiwanese manufacturers take on market show to worldwide players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This indicates that the market has a high degree of competition where makers that have layout and also development capabilities 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 players like Micron, Elpida, Samsung as well as Hynix which better lower the purchasing power of Taiwanese OEMs. The fact that these critical gamers do not enable the Taiwanese OEMs to have accessibility to technology shows that they have a greater negotiating power somewhat.

Threat of Entry:

Hazards of access in the Revenue Recognition For A Services Contract production sector are reduced due to the fact that structure wafer fabs as well as purchasing tools is highly expensive.For just 30,000 units a month the funding requirements can range from $ 500 million to $2.5 billion depending on the size of the units. The production required to be in the latest technology and also there for brand-new gamers would not be able to compete with dominant Revenue Recognition For A Services Contract OEMs (initial tools producers) in Taiwan which were able to enjoy economies of scale. The existing market had a demand-supply discrepancy and so oversupply was currently making it tough to enable new gamers to appreciate high margins.

Firm Strategy:

The region's production companies have counted on a strategy of mass production in order to decrease prices with economic situations of scale. Considering that Revenue Recognition For A Services Contract manufacturing uses standard processes and also standard and specialized Revenue Recognition For A Services Contract are the only 2 classifications of Revenue Recognition For A Services Contract being produced, the procedures can easily take advantage of mass production. The market has dominant suppliers that have formed partnerships in exchange for modern technology from Korean and Japanese companies. While this has caused schedule of technology and also scale, there has been disequilibrium in the Revenue Recognition For A Services Contract sector.

Threats & Opportunities in the External Setting

According to the interior and outside audits, opportunities such as strategicalliances with technology partners or growth through merging/ acquisition can be checked out by TMC. Along with this, a step towards mobile memory is additionally an opportunity for TMC particularly as this is a niche market. Threats can be seen in the kind of over reliance on foreign players for innovation and competitors from the US and Japanese Revenue Recognition For A Services Contract producers.

Porter’s Five Forces Analysis