Shanzhai! MediaTek and “White Box” Handset Market
MediaTek Company is a large global chipset supplier in wireless handset market. More than half of the chipsets are selling to shanzhai market like China or South Asia. Shanzhai means illegal counterfeits or “knock-offs”. Over the last 30 years, the company had great success through this target market. However, the CEO of the company Ming-Kai Tsai was in a dilemma. He wants to get more opportunities for the company’s further growth. The primary problem is whether they should serve tire-one companies like Nokia, Motorola or Samsung instead of focus on shanzhai market. The secondary problem they faced is the company’s image and the ethical concern. The …show more content…
Threat of Substitution (High to Medium) Threat of substitution does exist for MediaTek because they are aimed at the 2G mobile phone market, thus consumers can switch at any time to the high-end 3G market. The 3G technology that is offered by many other companies allows consumers to have a much faster product without having to incur a huge price increase. With customers being able to switch markets very easily MediaTek does face a relatively high threat of substitution.
Bargaining Power of Suppliers (Low) Bargaining power of suppliers is very low because MediaTek produces the chipsets themselves and therefore they are the suppliers in the mobile phone industry. MediaTek is a very well established company, which means they are quite rare in regards to the supplier industry.
Bargaining Power of Buyers (Medium to Low) MediaTek is one of the only companies who are apply to supply chipsets in the Chinese 2G mobile phone Market, so in terms of this bargaining power of buyers is relatively low because consumers don’t have various other suppliers they can purchase from. On the other hand bargaining power of buyers is high to medium in a sense that consumers can easily switch from the low-end product which is what MediaTek offers to the high-end 3G mobile phone product. After analyzing Shanzhai! MediaTek
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The power of buyers in the industry varies at different levels depending on the field. For pharmaceutical drug companies, which have thousands of patients, customers have lower price sensitivity as they are rarely able to refuse the treatments they need and they have low bargaining leverage due to commonly lack of information as well as knowledge on the drugs. For biotech firms that distribute specialized products to the government and hospitals, their customers actually have more of a bargaining power due to being the sole consumer sources
- The Bargaining Power of Suppliers for Blackberry has increased, due to Blackberry’s eroding market share. Firms who dominate the mobile communications industry, such as Apple and Samsung, have relatively higher bargaining power, because their larger product orders account for more of the suppliers business.
The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.
Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.
Bargaining power of buyers is medium-high because of the low switching costs and wider spectrum of similar products selling at competitive prices due to the influence of developing countries
“The mind changes, the word changes, time doesn't stay still, history is a verb, it is ongoing, there is no past tense, future tense, history is constant” Hung Liu told interviewer Rachelle Riechart (Riechart). Hung Liu is a Chinese woman who was born in Changchun, China in 1948. She was born during the age which we call the Chinese Cultural Revolution, which heavily impacted her life. She lived in China for 36 years and then left for the United States. She now resides in Oakland, CA, where she teaches art at Mills College (“A World of Art”). A lot of her artwork is based on photographs and memories she has from China and photographs she’s taken in the United
There are many network equipment suppliers, which are suffered from the down telecom market. Having mature technologies also commoditize the products. As such, the bargaining power of suppliers has been weak.
The suppliers get the advantages of making their products be showcased for the consumers thru these retailing outlets. A wider scope of retail outlets could mean wider scope for the brand recognition of the seller’s products, that is why these retailing giants has more power than suppliers. But when it comes to distribution, having a strong supplier is important, the company be better over competitors when it comes to qualitative factors such as on time deliveries on their branches and wider network of
1. Cisco suffered from inertia when an attempt was made to engage business management in selecting software for their individual areas, and/or agreeing to participate in the ERP implementation project. List and explain reasons why management would hesitate to become engaged in the IT process/project.
Factor Bargaining Leverage Concentration of buyers If there are only a few buyers, each will wield more power. Large-volume buyers are important to your industry and therefore hold more bargaining power. If substitutes for your industry’s product are available, buyers have more power. If your buyer faces high switching costs, they have less power. If buyers are capable of supplying your industry’s product to themselves, they may use that threat to demand more favorable terms. Explanation Your Industry
The bargaining power of buyers stands in a direct relationship with the bargaining power of suppliers. If the bargaining power of buyers is substantial it increases the opportunity cost of suppliers. The greater the buyers concentration the greater their bargaining power. This bargaining power is also increased in markets where the suppliers’ concentration is high. The bargaining power is also increased when the cost of switching from one supplier to another is low. In instances where backward vertical integration is possible i.e. buyers setting up their own chains of suppliers the bargaining power of the buyer increases in that their prices may become more competitive. In a market where the buyers are more concerned over quality than price their bargaining power decreases as they are less inclined to shop
Bargaining power of suppliers: Moderate. There are not many companies that the suppliers can supply to. But on the other hand the game development companies can have more power by developing specific games.
As bargaining power is determined by the uniqueness of supplier’s products, supplier for Apple have little competitive advantage nor bargaining power. In fact, the majority of suppliers compete for contracts with Apple, and seek out maintaining those contracts by providing products at cheaper than competitor rates. Apple has also reduced the power of suppliers through the designing of its own computer chips and processors. Additionally, Apple reduced the power of manufacturers, like Qualcomm, by buying manufacturing equipment and only allowing this equipment to be
Bargaining power of suppliers. Suppliers have the ability to leverage, control, and negotiate the cost of their products (Hill et al., 2015, p. 56). In the case of the suppliers of the office supplies industry, more so for Staples, the bargaining power is weak and is considered to be low. The reason for its power being weak is a result of large companies having several suppliers that will easily compete against each other to provide the lowest cost of products.