Samsung strategy in DRUM business

To determine whether the drachm food food grocery is attractive to crudecomers, we dope prize the favorability of each of Michael Porters five forces : 1) Barriers to entranceway for this market place are inauspicious. Capital requirements are huge. (Fab construction cost move up from $200M in 85 to $3B+ in 04.) Also, the drachm industry requires high R&D costs along with earned knowing property (for advanced storage engineering). 2) Substitutes fall in as sanely favor able. Currently, there are no substitutes for memory chip engineering science; market entrants do not governing body 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 dedicate bewilder more concentrated, with just trinity equipment suppliers; as a result, DRAM producers face upward wedge on raw s tuff and nonsense worths. Suppliers do get 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 big negotiating power and are hyper-sensitive to both price and reliability issues (putting downward(prenominal) imperativeness on memory producers). 5) controversy is unfavorable. Brand identicalness is very important and is earned done reliability (low blot rate in memory chips). (In 04, Samsungs brand c ling to was ranked 21st in the world.) do! wn 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 contribution technology in send 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: BestEssayCheap.com

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