Through innovation and technological advances, the market shifted from analog transmissions (1 G), to digital mobile communications in 1992 (also known as G), and ultimately to the Wideband Data Communications network (G). With rapid changes in this dynamic marketplace only the most well-funded and well-managed companies have managed to emerge from generation to generation, whilst others have been unsuccessful.
Coloratura: In the past thirty years, the evolution of the cellular mobile device arrest has had a vast impact on the international behavior within society. With mass availability and affordability of wireless telecommunication devices, they have become widely accepted throughout the world. This phenomenon has resulted in great economic growth within the market. Economic: With an increased demand of widely available wireless telecommunication devices, the handset market grew from a high-end niche market into the most widespread electronic device in the world.
Estimates suggest that between 1. 2 billion and 1. 4 billion units were produced, and shipped n 2009 alone, categorizing it as the world’s most prevalent electronic device. Global: With evolving technological innovation, globalization has prevailed in the passed decades. With free-trade agreements, and extensive transportation networks, the respectability of new market places has grown immensely. Thus, demand for both brand-name cellophanes as well as ‘White Box” cellular devices has significantly increased, resulting in a vast demand of wireless chippies. 2.
Industry Environment Porter’s Five Forces: Barriers of Entry: Due to low labor costs, low production costs, a relatively owe selling point (exhibit 5), and the widely available schematics of the wireless chippies, which can be found online, it can be argued that the barrier of entry to this market is quite low. Buyer Power: Due to the mass increase in demand of cheap, innovative, and easily programmable chippies, Mediator’s chippies sales have sky-rocketed by 25% in the span four months (from 80 million units in the second quarter to 100 million units in the third quarter).
Resulting in demand levels the company was not able to supply, and has thus chosen to focus only on their top 20-30 customers, leading to low buyer power. Supplier Power: Although not much information was given from a supplier view-point, one can argue that Mediated has been capable of supplying a basic chippies (2. G-2. EGG) for a relatively low price, thus suggesting the raw materials supplier does not have much bargaining power. Intensity of Competition: Although not many suppliers of fables semiconductors exist, the intensity of competition is relatively high due to vigorous technological innovation.
In order to differentiate itself, Mediated develops 100-200 new features on a yearly basis. The main field of competition, which sets companies apart, is their ability to offer a third generation chippies modules. The major players in the fables semiconductor industry include Infinite, Marvel, Freestyle, and Qualm. Threat of Substitutes: In this case analysis no threats of substitutes were mentioned. Trends: With the rapid evolution of technology, the cellular phone industry has become one of the worlds most lucrative technological markets.
It has changed the way in which humans interact with one another, and will continuously do so with technological advances. Industry Size: The fables semiconductor industry entails approximately ten major players, and a very few smaller companies. Although is has been said that approximately 10,000 cellophane component manufacturing companies operate within the Sheehan area. Growth: The industry growth rates have drastically grown in the late offs, and even more so in the decade to follow.
In 2009, Mediator’s sales rose from 80 million chippies units in the second quarter of the year, while the projections for the next fiscal quarter assumed sales of 100 million units, ultimately reaching 350 million units at the ears end, acquiring approximately a 25% market share. 3. Opportunities: In this fast-evolving, technologically inclined market, Mediated is in a position where they have capitalized on some aspects of scope, yet are still in the process of developing a network to exploit the full scale spectrum of the immense market in which they operate.
Opportunities surround the company in both fields, which can be directly related. If Mediated decides to update their designs and evolve into a G broadband fable chippies manufacturer, tier-one companies would be inclined to use their product. Due to the great customer services they offer, added value, continuous innovation, and relatively low price-point; Mediated has gained a competitive advantage. 4. Threats: In an industry where continuous innovation occurs on a daily basis, Mediated faces vulnerabilities in regards to their strategy.
While offering a “tier-one performance” product, the company supplies 95% of its chippies to local Chinese “white-box” manufacturers. In turn, tier-one companies do not view Mediated as an adequate supplier due to their involvement in the grey Shanghai market. This arrest segment is unreliable, and with a change in regulatory practices, can be abolished. Resulting in a tremendous loss of sales to the Media Take Company. 5 Conclusion: In order to remain successful in the fable semiconductor industry, Mediated should continue to differentiate themselves from competitors.
They can do so by offering high quality products, with great customer services while continuously revolutionize and developing a dynamic product to satisfy its clientèles demands while remaining cost leaders in their market segment. 3. Internal Analysis: Strengths: Media Test’s main strengths stem from their incredible value added to customers through various methods such as customer services ranging from chippies integration seminars to the available chippies schematics online, continuous research & development to stimulate innovation, and a very versatile product at a relatively low price-point.
Weaknesses: By developing a ‘tier-one performance” chippies, rather than an actual tier-one module, Mediated has cornered itself by limiting its selling opportunities. Due to the mass demand of these chippies in the Chinese, grey Shanghai, “White-Box” market, Mediated as focused all their resources to produce 2. G-2. EGG products and have therefore missed out on significant ventures to become a contracted wholesale supplier to tier-one companies. Value chain analysis: The user-friendly aspect of Media Test’s online schematics enables customers to customize their chippies modules to differentiate the product.
The constant stream of new features, aided by shorter production cycles (3 months), creates an innovative brand, adding on to the “tier-one performance” of the semiconductor. This positions Mediated at an advantageous position within the marketplace. Sources of Competitive advantage: The company’s competitive advantage stems from its ability to produce a versatile chippies component backed up by intensive research and development procedures which result in an affordable, adaptable, customizable module.
Conclusion: Media Test’s strategy has ensured the company a leading position within the competitive market. Their great customer services, along with sizeable R&D investments has ensured customer satisfaction at a relatively low price point, which has differentiated them from their competitors and given the product a great added value. Due to tremendous growth in demand for the product, Mediator’s comfortable position in the market has enabled them to concentrate production to its top 20-30 clients. 4.
Current strategy evaluation: Business-level: Mediated has adopted an integrated strategy and is thus competing on both cost leadership as well as a differentiated product stratagem, through constant innovation and customer service. As a result, the company is a leader in the Shanghai market. Corporate-level: Media Take has capitalized on certain economies of scope aspects by producing two partially related products DVD players, Fable Semiconductors), although they could go a step further and fully capitalize on scope by related diversification in the field of chippies and produce a G product to satisfy further market demands. . Recommendation: Tsar’s main dilemma regards the company strategy. He is unsure whether the company should pursue tier-one brands to supply with their chippies, or if the company should remain in its current position and sell their product to the Shanghai ‘White-Box” market. Although becoming a wholesaler to the tier-one market would immensely increase Meditates ability to capitalize on economies f scale, it would imply very rigid measures to be undertaken in order to satisfy the demands of the brand name cellophane manufacturers.
I would advise Tsar to remain in his current business position and keep supplying the Shanghai market with the company’s fable semiconductor, whilst horizontally expanding his operation. This could be done by creating a subsidiary within the brand to transform its reputation from an Original Equipment Manufacturing company (MOM) to an Original Brand Manufacturing company (BOMB), in order to sell its product to tier-one buyers, and thus capitalizing on both economies of scale and scope.