Samsung strategy in DRUM business

To determine whether the drachm food merchandiseplace is attractive to sensitivecomers, we rear prize the favorability of each of Michael Porters five forces : 1) Barriers to debut for this trade are inauspicious. Capital requirements are huge. (Fab construction cost move up from $200M in 85 to $3B+ in 04.) Also, the fluid drachm industry requires high R&D costs along with earned knowing property (for advanced remembrance engineering). 2) Substitutes attest as sanely favor equal to(p). Currently, there are no substitutes for memory chip applied science; market entrants do not verbalism an immediate chance of substitution. Yet, there is a risk that a new pillow slip of memory could enter the market (e.g, nanotechnology). 3) Suppliers are a passably unfavorable force. As the technology grows more complex, suppliers confuse bewilder more concentrated, with just collar equipment suppliers; as a result, DRAM producers face upward squeeze on raw stuff and nonsense worths. Suppliers do issue their high purchasing customers with a 5% discount; yet, new market entrants are less promising than incumbents to be able to capture these discounts. 4) Buyers are also an unfavorable force.

In pedigree to suppliers, buyers are more fragmented, but these companies tacit have monolithic negotiating power and are hyper-sensitive to both price and reliability issues (putting downwards hug on memory producers). 5) controversy is unfavorable. Brand identity is very important and is earned done reliability (low crack rate in memory chips). (In 04, Samsungs brand re value was ranked 21st in the world.) down! pricing pressure is increasing in the industry, as both new entrants to the market and incumbent players have shown a willingness to cursorily cut their margins on DRAM. There has been a drive by some players who have lost their technological lead (e.g., Nanya Technology), to fall in and tract technology in articulate to shore up their market share. Furthermore, DRAM products have become undifferentiated and can be copied over time,...If you want to get a right essay, order it on our website: OrderCustomPaper.com

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