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Sub Micron Devices Inc Case Porter’s Five Forces Analysis

CASE ANALYSIS

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Sub Micron Devices Inc Case Study Solution

Bargaining Power of Supplier:

The distributor in the Taiwanese Sub Micron Devices Inc sector has a low bargaining power despite the fact that the sector has prominence of three players consisting of Powerchip, Nanya and ProMOS. Sub Micron Devices Inc suppliers are mere initial tools producers in strategic alliances with international gamers for modern technology. The 2nd reason for a low negotiating power is the truth that there is excess supply of Sub Micron Devices Inc systems due to the large range production of these leading market players which has actually decreased the rate per unit and increased the negotiating power of the customer.

Threat of Substitutes & Degree of Rivalry:

The hazard of alternatives in the marketplace is high provided the reality that Taiwanese producers take on market share with international gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and Fujitsu. This suggests that the market has a high level of rivalry where manufacturers that have layout and advancement capacities together with producing knowledge 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 Hynix which further minimize the purchasing power of Taiwanese OEMs. The truth that these strategic gamers do not enable the Taiwanese OEMs to have accessibility to technology indicates that they have a greater negotiating power relatively.

Threat of Entry:

Hazards of access in the Sub Micron Devices Inc manufacturing industry are reduced because of the reality that building wafer fabs and acquiring devices 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 dimension of the systems. The manufacturing required to be in the most current modern technology and also there for brand-new gamers would not be able to complete with leading Sub Micron Devices Inc OEMs (original devices manufacturers) in Taiwan which were able to take pleasure in economic climates of scale. Along with this the present market had a demand-supply discrepancy and so surplus was currently making it hard to allow brand-new gamers to take pleasure in high margins.

Firm Strategy:

The area's production companies have relied on a technique of mass production in order to reduce costs via economies of scale. Since Sub Micron Devices Inc manufacturing utilizes typical processes and standard as well as specialized Sub Micron Devices Inc are the only two groups of Sub Micron Devices Inc being made, the processes can easily make use of automation. The industry has leading makers that have actually formed partnerships for technology from Korean as well as Japanese companies. While this has caused schedule of technology and range, there has actually been disequilibrium in the Sub Micron Devices Inc sector.

Threats & Opportunities in the External Atmosphere

As per the internal and also exterior audits, opportunities such as strategicalliances with technology companions or development with merging/ acquisition can be explored by TMC. A move towards mobile memory is additionally a possibility for TMC particularly as this is a specific niche market. Hazards can be seen in the type of over dependancy on foreign gamers for technology and also competitors from the US and also Japanese Sub Micron Devices Inc producers.

Porter’s Five Forces Analysis