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Suntech Power Holdings A The Pre Ipo Years Case Porter’s Five Forces Analysis

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Suntech Power Holdings A The Pre Ipo Years Case Study Solution

Bargaining Power of Supplier:

The distributor in the Taiwanese Suntech Power Holdings A The Pre Ipo Years market has a low bargaining power although that the industry has dominance of three players consisting of Powerchip, Nanya as well as ProMOS. Suntech Power Holdings A The Pre Ipo Years suppliers are mere original devices makers in critical alliances with international players for modern technology. The second factor for a reduced bargaining power is the truth that there is excess supply of Suntech Power Holdings A The Pre Ipo Years units as a result of the huge range manufacturing of these leading market gamers which has reduced the price each as well as increased the negotiating power of the purchaser.

Threat of Substitutes & Degree of Rivalry:

The danger of substitutes out there is high given the reality that Taiwanese makers take on market share with global gamers like Intel, Motorola, IBM, Hitachi, NEC, Toshiba, Samsung and also Fujitsu. This suggests that the marketplace has a high degree of competition where producers that have design and also advancement capabilities together with manufacturing know-how may be able to have a higher bargaining power over the market.

Bargaining Power of Buyer:

The market is dominated by players like Micron, Elpida, Samsung and also Hynix which further minimize the purchasing power of Taiwanese OEMs. The reality that these tactical players do not enable the Taiwanese OEMs to have access to innovation suggests that they have a higher negotiating power comparatively.

Threat of Entry:

Risks of entrance in the Suntech Power Holdings A The Pre Ipo Years manufacturing industry are low due to the fact that building wafer fabs and also acquiring tools is extremely expensive.For just 30,000 devices a month the capital requirements can vary from $ 500 million to $2.5 billion relying on the size of the systems. Along with this, the production required to be in the latest technology and also there for brand-new players would certainly not be able to take on leading Suntech Power Holdings A The Pre Ipo Years OEMs (original equipment producers) in Taiwan which were able to enjoy economies of scale. Along with this the existing market had a demand-supply discrepancy therefore surplus was already making it tough to allow new gamers to take pleasure in high margins.

Firm Strategy:

Because Suntech Power Holdings A The Pre Ipo Years manufacturing makes use of common procedures as well as common and specialized Suntech Power Holdings A The Pre Ipo Years are the only 2 categories of Suntech Power Holdings A The Pre Ipo Years being produced, the procedures can quickly make usage of mass manufacturing. While this has led to availability of modern technology and also scale, there has actually been disequilibrium in the Suntech Power Holdings A The Pre Ipo Years market.

Threats & Opportunities in the External Setting

As per the inner as well as external audits, chances such as strategicalliances with innovation companions or development via merging/ acquisition can be discovered by TMC. Along with this, a move towards mobile memory is also a possibility for TMC especially as this is a niche market. Threats can be seen in the type of over reliance on international players for modern technology and competition from the United States as well as Japanese Suntech Power Holdings A The Pre Ipo Years producers.

Porter’s Five Forces Analysis