Strong Tie Ltd Case Porter’s Five Forces Analysis


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Strong Tie Ltd Case Study Solution

Bargaining Power of Supplier:

The supplier in the Taiwanese Strong Tie Ltd sector has a low bargaining power despite the fact that the industry has supremacy of three gamers consisting of Powerchip, Nanya and ProMOS. Strong Tie Ltd producers are simple original equipment manufacturers in strategic alliances with foreign players in exchange for modern technology. The second reason for a reduced negotiating power is the fact that there is excess supply of Strong Tie Ltd systems as a result of the big range manufacturing of these leading sector gamers which has actually lowered the rate per unit and also boosted the bargaining power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The risk of replacements out there is high given the fact that Taiwanese makers take on market share with international gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This indicates that the market has a high degree of competition where producers that have style as well as development abilities in addition to making experience might be able to have a greater bargaining power over the market.

Bargaining Power of Buyer:

The market is dominated by gamers like Micron, Elpida, Samsung and also Hynix which better minimize the purchasing power of Taiwanese OEMs. The truth that these calculated gamers do not allow the Taiwanese OEMs to have accessibility to modern technology suggests that they have a greater bargaining power relatively.

Threat of Entry:

Hazards of access in the Strong Tie Ltd production industry are low because of the reality that structure wafer fabs and buying devices is very expensive.For just 30,000 units a month the resources requirements can vary from $ 500 million to $2.5 billion relying on the dimension of the devices. Along with this, the manufacturing required to be in the most up to date modern technology and also there for brand-new gamers would not be able to compete with dominant Strong Tie Ltd OEMs (initial equipment manufacturers) in Taiwan which had the ability to enjoy economic climates of range. In addition to this the current market had a demand-supply discrepancy therefore oversupply was currently making it hard to permit new gamers to take pleasure in high margins.

Firm Strategy:

Since Strong Tie Ltd production utilizes conventional procedures and common as well as specialized Strong Tie Ltd are the only 2 classifications of Strong Tie Ltd being made, the procedures can conveniently make use of mass manufacturing. While this has actually led to schedule of innovation as well as range, there has actually been disequilibrium in the Strong Tie Ltd industry.

Threats & Opportunities in the External Environment

According to the interior and also external audits, possibilities such as strategicalliances with technology companions or development with merger/ acquisition can be checked out by TMC. In addition to this, an action towards mobile memory is also a possibility for TMC particularly as this is a niche market. Hazards can be seen in the form of over dependancy on foreign gamers for modern technology and also competitors from the US and Japanese Strong Tie Ltd makers.

Porter’s Five Forces Analysis