Science Technology company case
After reviewing the financial forecast from Science Technology Company and Semiconductor industry market situation, I concluded that 30% annual growth is not feasible, optimistic growth forecast is 15% .Because world semiconductor shipment kept growing, but not just semiconductor market but electronic products market was also dominated large market by Japanese manufacturers. If the company carried on with the same profit/cost structure, the company’s ROA would be 5% more or less in next 5 years, EPS would be 0.44 – 0.97 and stock price would goes down to less $10 – less $20. I can assume that there is no additional stock issuance. As of 1984, the ROA is 5.6%, EPS 0.57 and stock price $13-$37.
1. …show more content…
Major semiconductor market was in Japan (more than 50%). Japanese semiconductor supplier dominated Japanese market due to its exclusive market structure and started to increased market shares in US market, but US supplier could not do so.
3. Demands for testers from Semiconductor customer
Higher speed to go into manufacturing a new design products required more testability. To find out detective/reject before mounting on the board, to spot early production stage and ATE increased its presence in production. Sales in total ATE $359 (1978) to $1.6billion (1984) 28% /year growth, expected $4billion in 1988 at 26% compound annual growth rare.
4 .Growth driver
・More semiconductor was built in more electronic products and its shipment kept growing
・Labor rate increase required automate testing operation to reduce labor cost.
・Specialization, work division due to more complexity and high cost to develop semiconductor device tester
・Improvement of testing technology and tested devices change
・After inflation settled, interest rate decreased and corporate income tax would reduce from 46% to 34% in 1986 to stimulate more investment.
・Semiconductor agreement between Japan and USA due to lobbying and US government put pressure to Japanese government to open Japanese market.
・National project SEMATECH started to recover the position in semiconductor market.
・Plaza Agreement in 1985 allowed weak US dollar and advantaged export increase.
Click here to unlock this and over one million essaysGet Access
Also, Japan’s technology was expanding and was a threat to Motorola. Japan was selling products at less than fair value to rapidly increase their market. Galvin worked on a federal foreign and trade committee relations to fight unfair trade practices and protectionism (Jick &Peiperl,
The United States began to reach outward for trade, showing interest in Japan. Almost forcing the country to begin to trade with the U.S.
Before America, Japan was the main power in the Pacific. This was apparent until the United States defeated them with the dropping of the atomic bomb on Hiroshima and Nagasaki. Up until the late 1960’s, America was the most prominent and dominating manufacturer of the world. However in today's world, America is still an extremely powerful trading country, it has become more of a rentier country. China became the United States’ main outsource for manufacturing because it was exponentially easier and much more inexpensive. Before, America made most of everything in-country such as steel. However, with the United States recovering from the war, it was forced to outsource some of its manufacturing workload to other countries, mainly China. During the 1920’s and the 1930’s, the world was going through the Great Depression. America had struggled through this period of economic downfall. However, Japan emerged earlier than other countries because its economic success came from government deficits used to expand Japan’s heavy industry and military. Many other smaller Pacific nations saw Japan as an invincible power that no Western nation could overcome. Yet, after their war campaign against America, Japan was left crippled. Japan’s main supplier of oil, the United States, regulated trade with Japan do to their recent military actions. Left with no option, Japan
Japan and the United States are two major economic powers. Both countries account for a large percent of the worlds domestic products and a significant portion of international trade in
We all know technology is a good thing, right? Or is it? We can all come up with reasons why technology is helpful or appropriate like we can for a particular medicine. And while some drugs are really great to cure or prevent a disease, sometimes the side effects outweigh any possible benefit. The same is true with technology. Some common negative side effects of technology are kids playing on their phones instead of going outside to play or young people not interacting face-to-face as much as they used to. Parenting is an area that has suffered since the rise in technology, specifically with phone use.
Japan was one of the first Asia countries to get themselves into the trade sector in 1868. They were a part of a trade routes that included Southeast and East Asia. Then by the sixteenth century they started trading with Western Countries. Japan and Western Countries found it hard to work with one another due to difference in religion. This began to limit the foreign trade between the two countries. Then when China became weaken by the trade industry, Western Countries found Japan to be attractive again, so they reached out to Japan to participate in foreign trade.
cars easier to access in the United States and vice versa. This provides more US jobs as well as Japanese
export more fuel efficient and less costly automobiles to the US. This global trade enabled the Japanese
Natural disasters had caused Japan to have a weak economy and the yen to rise. Businesses were buying other business abroad because weak economies in the other countries had caused the stock markets to fall and businesses were cheaper to buy. By buying businesses abroad, operations could be moved abroad to make it cheaper for the business to manufacturer products and import back into Japan. They could also acquire cheaper investments and bring in higher returns, depending on the economy of the country they were investing in.
And the reason of it was still the cost. Indeed, this former strategices failed to match their product characteristics with their supply priorities. That is, it cannot minimize their product cost. For example, using Japanese suppliers before was twenty to thirty percent more empensive than using Chinese suppliers, not to mention about the trasportation cost. In addition, their original Japanese design was still increasing the cost in China’s factories ----- increase equipment cost cannot make good use of the cheaper labor cost in China; increase producing cost by designing unnecessary function in China.
‘Necessity is the mother of invention.’ Human beings have made do with their lot since time immemorial. Humanity has constantly tried to adapt to the world that it finds itself in, to conquer the environment in order to live more comfortable lives. Quite unlike the rest of the life forms that are present on earth, human beings have the distinction of having the capacity to create the most ingenuous ways of adapting and changing the environment to his favor-technology. Technology can be summed up as the use of non-human organisms, mechanisms or machinery to complete tasks at the command of the controlling individual.
Historically japan had found the American consumer market to be an invaluable part of consumer orientated foreign investments, which relied heavily on
Twenty years ago, kids grew up playing outside. They would jump rope, ride bikes, and roller skate every hour of the day. Now, kids are growing up without these things because they would rather spend time swiping on their iPads, playing video games for hours, or watching all of the new shows on Netflix. The main difference between these generations is the use of technology. Within those twenty years, technology has been rapidly evolving to aid in the creation of laptops, tablets, and smart phones. These new gadgets that claim to make life “easier” constantly surround us. Have we ever thought about how these constant exposures to electronics affect the generations that are being raised on technology? Children should be restricted from using electronic devices until they are 2 years old to prevent developmental delays, health issues, and social skills.
Post World War II Japan’s economy was in shambles; there industrial production was down to 15% prewar times (Wikipedia, 2014). In order to come back to its full economic potential Japan had to make strict policies for trade. By 1950 Japan had already sprung back to its prewar trade level. But until 1960’s opening companies and doing business in Japan was still very restrictive for international companies. If a company wants to sell its products or do trade in Japan they will have to have to have a strategic alliance with a Japanese company to enter Japanese Market.