Case Study #3: Contract for the International Sale of Goods
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A chip off the new block
Semicontronics is an Australian manufacturing company that has been in the business of semi manufactured electronics for over a decade. Semicontronics has a solid reputation for meeting customer demands for quality products on time and on budget. The majority of Semicontronics customers are international, mid-market manufacturing companies that produce generic electronics such as cell phones, digital media players and game consoles. Retail stores in foreign countries purchase the generic products and rebrand them for sale.
Recently, Semicontronics has been approached by Phoneson to act as a supplier
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If Semicontronics can maintain its track record for supplying cost efficient, quality products on target, it could open an entire new customer market for expansion. While negotiating the supplier contract, Semicontronics realizes the memory in its current computer chips will have to be significantly increased to support the technical capabilities of Phoneson’s electronics. Its current manufacturing plant in Brazil is not equipped to meet these new demands, and an upgrade at this stage in a new customer endeavor is not economically feasible for Semicontronics. Semicontronics realizes it must find a quality subcontractor with the capabilities to manufacture the Phoneson computer chips, including the enhanced memory requirements.
Cash in your chips… After careful market research and consideration of options, Semicontronics decides to subcontract the computer chip manufacturing to Singatron, a relatively new electronics manufacturer in Singapore. Singapore has been a hotbed for electronics manufacturing, and Singatron was created by venture capitalist hoping to get a foothold in Singapore’s electronics market, specifically, in the next generation of computer chips. Although Singatron markets itself as a top quality manufacturer, its lack of experience is proving to be a major obstacle to it winning contracts. The subcontracting offer from Semicontronics has the potential to be mutually beneficial for both parties, because
Option 1 refers to cut down the markup price of the computer and get top management informed about its future benefits and scopes. Taking advantage of past good relationships, Computron can make Konig understand the importance of high quality product and reliability to get the bid and make the future plant compete. Here the output is in terms of quality and hence customer satisfaction is higher.
In addition, Sony operates in the one business sector which is the computer entertainment industry. Sony distributes and market PlayStation products including PS4, PS3, PS2, PSP and others accessories and gaming equipment (IBISWorld, 2013). Thus, I believe there is a high power of suppliers on the subject of hardware and accessories. We need to estimate the prices of the cost of hardware units that we need to use. Since the productivity of IBMs Cell
PAC Resources, Inc. is a small manufacturing company that specializes in high-quality specialized components for computers. Recently the company has faced a number of issues involving depleting sales, employee unrest, poor management and employee relations, and a lack of HR support. Currently, there are several pending decisions to be solved involving the organization and the HR department, human resource development, safety and security, staffing, compensation and benefits, and employee relations. Ultimately, to resolve these problems the solutions will take account of a SWOT analysis of the company along with multiple sources, potential alternatives, and dissenting opinions as a guide to the best
In the next section we will analyze the level of competition within memory industry based on Porter’s model, Samsung's competitive advantage and its sustainability considering the current market situation. 3. Analysis: Considering Porter’s model as a framework to analyze the level of competition within DRAM memory business, the threat of new entrant is high compared to the threat of substitutes and established rivals in horizontal competition. If we look at rivalry within the DRAM industry between established players, Samsung has a clear advantage over its competitors. Samsung is the market leader in DRAM memory business. It has a wide range of products and its products has a higher brand value. Threat of new entrants is high as Chinese competitors have easier access to large pool of local engineering talent and have a growing market for these DRAM chips. The government is also providing all sorts of assistance, like subsidized land, for the initial setup. Samsung has several options to deter the entry of new Chinese competitors. One option Samsung have is to continue to explore and increase market shares of flash memory markets which is a new and growing market. Samsung can also take advantage by lowering the price of DRAM chips. This would force a price war and drive new
6. The company has three main problems: the first problem is that they may unable to complete 200,000 IPhone 4 units in any of the three months they have been working on the contract. The second problem is they cannot hire more workers. The third problem is the company have problem with the Samsung flash memory installation. We have some suggestions for the company to solve these problems. Firstly, Danshui Company should improve their salary policy. We recommend company should motivate workers to produce more efficiently, for instance, they can set a basic salary for workers and offer them bonus if workers complete target. Secondly, the company should provide professional training for labors. So they can work more efficiently. After workers becoming more professional, the company cannot only use less labor hours, but also save more materials. A third suggestion is that Danshui Company should also improve the quality of production supervision. They should hire a more professional supervisor who is familiar with the production process and is able to build a good relationship with labors, so they can work more efficiently and the company can even save more money on materials.
With Intel have very few substitutes in the microprocessor industry, it is it is most certain that current customers will not want to switch and use another company’s products. High switching cost presents low bargaining power to the customers mainly because it would be very expensive to switch to a competitor, and since Intel is the leader in the market, switching
And these analyses will be done with the help of Porter’s 5 forces (see appendix 1, 2, 3). This analysing toll deals with issues which are from outside the industry that impacts the nature of competition within the certain industry. Thurlby, (1998) stated “Understanding the nature of each of these forces gives organisations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market”1. The analysis of the three industry are given belowPC industry (See appendix 1) This competition within the PC industry is extraordinarily high consisting with top companies like Dell, HP, Apple, Gateway and Sony. In order to gain competitive advantage, the key factors are advancement in technology, custom built PCs, reliability and standard customer service. The life cycle of PC industry can be seen as mature (See appendix 6); however the growth of PC’s has not decline. The reason is due to the globalisation trends taking place within the major firms. The barriers very high where there are already five main firms that dominate the market. Therefore, the chances of new PC companies entering the market and get significant hold of market share is very slender. The main two factors that are making the entry level high are mainly cost and distribution and the top five firms also control 70 per cent of the global personal computer market. Another factor may be is that
Intel, also known as Integrated Electronics, is a company that manufactures and sells various types of electronic equipment and hardware. It was founded by Gordon Moore and Robert Noyce in 1968 and has since grown to be a commonly used consumer brand. Intel must ensure that its products are consistently well-made, especially when its products affect the consumer’s experience with the technology he or she is using. Because Intel must implement quality in a wide variety of products, the best practice for the company is to have a physical separation between its departments and to focus on the quality of each individual aspect of its product creation; this will allow each department to specialize in their work functions and allow the company to separate each task effectively.
Although the Silicon Valley is not limited to the production of cell phones, many of the components of cell phones are manufactured by workers in the Silicon Valley. Several corporations that manufacture cell phones or the components of cell phones have their plants located in the Silicon Valley. Some corporations include Intel, Altera, 3com, Applied Materials, Agilent Technologies, Juniper Networks, Linear Technologies, National Semiconductors, and Xilinx (“Silicon Valley Companies”).
Because of the extremely intricate and sophisticated nature of manufacturing semiconductors, a competitor should expect high initial capital requirements to build facilities needed for production. Cost to build a new semiconductor fab has gone up from $200 million in 1985 to $3 Billion in 2004. Incumbent companies have capabilities to design newer generations of semiconductors with greater amounts of memory and processing abilities that make older generations obsolete. Older generations tend to drop half their amount in price one year after a new model is reduced (exhibit 6). The United States
In the component market, integrated circuit technology is threat of new entrants. The growth of integrated circuit technology makes existing component market shrink. EPD has taken aggressive moves to protect its market share from competitors and new entrants. Therefore, in existing market, EPD needs a cost reduction effort more and change their business model into low-margin high-volume business. It means that they should change their evaluation system; the plant should maintain 40% of gross margin. Additionally, they need to introduce new products into market to acquire new source of revenue. EPD has not built the clear strategies and shared them with employees.
Asus is been successful in using Voice of customer for creating new products inspired by the needs of
From the three main activities, Samsung Electronics is the one that can compete with other leading brands. Initially that making Samsung’s products are on the rise is the development of 256K dynamic random access memory (DRAM) computer chip and a VLSI (very large scale integration) version of the 64K DRAM chip. By the turn of the millennium, the company’s successful introduction of leading-edge products such as mobile phones, MP3 players, digital televisions and personal digital assistants (PDAs).
There is need to consider several things when we talk about operations and future of a business. Expanded through a minor export business in Daegu, Korea, Samsung has emerged as one of the prominent corporations in electronics around the globe (Samsung, 2015). Samsung has major emphasis on electronic appliances and digital media, memory, system integration, and semiconductors. At present, Samsung has always created innovation through top quality practices and products that are accepted around the global. This paper will present SWOT analysis and Porter model of five forces for Samsung and propose the opportunities to increase profitability and competitiveness. This paper also comprises a
Samsung Electronics Corp. is one of the world’s major semiconductor manufacturers and is the largest information technology company in the world. SEC manufactures almost all kinds of consumer devices, which include mobile phones, tablets, DVD players, digital TVs, digital still cameras; computers. It also manufactures color monitors, LCD panels, printers; semiconductors such as DRAMs, static RAMs and flash memories. The company, which is the flagship of Samsung Group is also into making display drivers & communication devices ranging from wireless handsets and Smart-phones to networking gear.