Mini Case Assignment 2

Mini Case Assignment 2 - CEG GSB 703 Mini Case Assignment...

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CEG GSB 703 Mini Case Assignment #2 Adam Ohanesian Email: Adam.Ohanesian@nichols.edu Table of Contents I. Why Inventec is not very profitable a. Industry competition b. New entrants c. Bargaining power II. Drivers of average profitability of the Original Design and Manufacturing industry a. Process of manufacturing products costs b. Low cost distribution III. Key factors Inventec needs to manage to earn above-average profits a. Comply with product standards and quality assurance b. Lower operating costs c. Differentiation IV. Profits of Indian software industry vs. Chinese ODM industry a. Growth rate b. Higher bargaining power c. Global outsourcing d. Competition V. Strategic advice for Inventec to improve profitability a. Change sectors to software development
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b. Vertical integration 1. Despite its growth and size, why is Inventec not very profitable? Inventec is not very profitable for a few reasons, first being the industry competition. There are many large competitors such as Asustek, Compal, and Quanta who all have larger sales revenues. Also, as OEMs usually outsource some of their technology, EMSs and ODMs are competing for the same clients more and more. The second reason Inventec is not very profitable is the threat of new entrants. Taiwan has a high rate of new entrants for instance. A business that wants to start in the ODM industry can just step right in without any issues and less government restrictions. The third reason Inventec is not very profitable is bargaining power.
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Mini Case Assignment 2 - CEG GSB 703 Mini Case Assignment...

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