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Riverbend Telephone Company Case Porter’s Five Forces Analysis

CASE SOLUTION

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Bargaining Power of Supplier:

The distributor in the Taiwanese Riverbend Telephone Company industry has a low bargaining power despite the fact that the sector has dominance of 3 players including Powerchip, Nanya and ProMOS. Riverbend Telephone Company manufacturers are simple original equipment suppliers in critical alliances with foreign players for modern technology. The 2nd reason for a low negotiating power is the fact that there is excess supply of Riverbend Telephone Company units because of the big scale manufacturing of these leading market gamers which has lowered the cost each and also raised the negotiating power of the buyer.

Threat of Substitutes & Degree of Rivalry:

The danger of alternatives out there is high provided the truth that Taiwanese manufacturers compete with market share with international players like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This shows that the market has a high level of rivalry where makers that have design and advancement capacities along with manufacturing knowledge might have the ability to have a higher bargaining power over the market.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and also Hynix which additionally reduce the buying powers of Taiwanese OEMs. The reality that these calculated players do not permit the Taiwanese OEMs to have access to modern technology indicates that they have a greater bargaining power somewhat.

Threat of Entry:

Hazards of entry in the Riverbend Telephone Company production industry are reduced owing to the fact that building wafer fabs and also buying devices is highly expensive.For simply 30,000 systems a month the funding requirements can range from $ 500 million to $2.5 billion depending upon the dimension of the systems. Along with this, the production required to be in the most recent modern technology and there for new gamers would not be able to compete with leading Riverbend Telephone Company OEMs (original equipment makers) in Taiwan which were able to enjoy economic situations of scale. In addition to this the present market had a demand-supply inequality and so oversupply was already making it challenging to permit new gamers to enjoy high margins.

Firm Strategy:

The area's manufacturing firms have relied on a method of mass production in order to decrease costs via economic situations of range. Given that Riverbend Telephone Company production uses typical processes and also conventional and also specialty Riverbend Telephone Company are the only two categories of Riverbend Telephone Company being produced, the processes can easily make use of mass production. The market has dominant manufacturers that have actually developed alliances in exchange for modern technology from Oriental as well as Japanese firms. While this has actually led to accessibility of innovation as well as range, there has actually been disequilibrium in the Riverbend Telephone Company industry.

Threats & Opportunities in the External Atmosphere

Based on the internal as well as outside audits, possibilities such as strategicalliances with innovation companions or development via merger/ procurement can be discovered by TMC. In addition to this, a move towards mobile memory is also an opportunity for TMC specifically as this is a specific niche market. Threats can be seen in the type of over dependence on foreign gamers for innovation as well as competitors from the United States and Japanese Riverbend Telephone Company makers.

Porter’s Five Forces Analysis