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Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit Case Porter’s Five Forces Analysis

CASE SOLUTION

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Bargaining Power of Supplier:

The distributor in the Taiwanese Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit industry has a reduced bargaining power although that the market has supremacy of 3 players consisting of Powerchip, Nanya as well as ProMOS. Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit makers are mere initial tools producers in critical alliances with international players in exchange for modern technology. The second reason for a low negotiating power is the truth that there is excess supply of Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit units due to the large range production of these dominant industry players which has actually reduced the price each and also boosted the negotiating power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The hazard of alternatives in the marketplace is high given the reality that Taiwanese suppliers take on market show to global gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This indicates that the marketplace has a high degree of competition where makers that have design as well as advancement abilities together with manufacturing expertise might be able to have a greater bargaining power over the marketplace.

Bargaining Power of Buyer:

The market is dominated by players like Micron, Elpida, Samsung and also Hynix which further decrease the buying powers of Taiwanese OEMs. The reality that these tactical players do not allow the Taiwanese OEMs to have access to modern technology suggests that they have a greater negotiating power fairly.

Threat of Entry:

Risks of access in the Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit manufacturing sector are low because of the truth that building wafer fabs and buying equipment is very expensive.For just 30,000 systems a month the resources requirements can vary from $ 500 million to $2.5 billion depending upon the dimension of the systems. The manufacturing needed to be in the most current modern technology and also there for brand-new players would certainly not be able to contend with leading Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit OEMs (original equipment makers) in Taiwan which were able to take pleasure in economies of range. The present market had a demand-supply imbalance and so excess was currently making it hard to allow new gamers to take pleasure in high margins.

Firm Strategy:

The area's production companies have relied on a strategy of mass production in order to lower costs with economic situations of scale. Considering that Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit manufacturing utilizes basic processes as well as basic and specialized Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit are the only two groups of Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit being produced, the processes can easily utilize automation. The industry has dominant makers that have created partnerships for innovation from Oriental as well as Japanese companies. While this has led to schedule of modern technology and also range, there has been disequilibrium in the Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit industry.

Threats & Opportunities in the External Environment

As per the interior as well as external audits, possibilities such as strategicalliances with technology partners or growth via merging/ acquisition can be explored by TMC. A step towards mobile memory is also a possibility for TMC specifically as this is a niche market. Risks can be seen in the kind of over dependence on foreign gamers for technology and also competition from the United States as well as Japanese Rio Tinto And Mining In Mongolia The Oyu Tolgoi Deposit manufacturers.

Porter’s Five Forces Analysis