Preview

Seagate

Good Essays
Open Document
Open Document
619 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Seagate
Seagate Technologies operates in a highly competitive, price-sensitive, and growing industry for disk drives. Competitors include a number of direct, indirect, foreign, and domestic competitors including, but not limited to Quantum, Western Digital, IBM, Toshiba, and NEC.

To compete, Seagate’s maintains low prices and introduces new cost-effective products that are equal to or better than the competition. To support such a strategy, Seagate invests heavily in R&D, maintains strong supplier relationships, and utilizes vertical integration combined with high-volume, low-cost manufacturing. Vertical integration allows Seagate to quickly turnaround and manufacture new products. Seagate’s manufacturing approach of high-volume and low-cost is supported by operating at near-full capacity, by major capital investments to meet capacity, and by locating its facilities strategically in low labor costs areas along the Far East.

While Seagate has an average annual growth rate of 15%, operations in the low cost, high-volume environment for disk drives has its risks. These include: 1. Fierce Competition: Not meeting customer demands would cause customers to switchover. Additionally, there is potential for many new entrants into the market. Seagate mitigates this risk by differentiating its products with a greater energy saving and greater read speed for disk drives. 2. Capacity Risk: If Seagate cannot produce enough of one component, then production of its entire disk drives will be limited. Seagate mitigates this risk by planning its productions schedule months ahead of time, by shipping capital equipment from its other facilities to meet production schedules, and by investing in new equipment. 3. Demand Forecast Risk: Seagate’s plan to create production schedules months ahead of time instead of adjusting monthly increases creates major fluctuations in demand. This presents Seagate with demand uncertainty. Seagate reduces this risk by having

You May Also Find These Documents Helpful

  • Better Essays

    North West Case

    • 1288 Words
    • 6 Pages

    Forecasting and procurement use a “push strategy” where production decisions are based on long term historical forecasting. Category managers look at past trends and base their buying decisions on past sales. Purchase orders are submitted at least 4 months prior to the intended selling period. This does not allow for a response to changes in demand. This can lead to overstocking inventory, which is what causes the low turnover rate. The relationship with suppliers is…

    • 1288 Words
    • 6 Pages
    Better Essays
  • Satisfactory Essays

    Rogers' Chocolates

    • 334 Words
    • 2 Pages

    • Demand forecasting is difficult due to the seasonality of sales/ The out of stock issue is one of the major problems/ Seasonal production created problems with out-of-stock…

    • 334 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Lululemon Case Study

    • 948 Words
    • 4 Pages

    Threat of New Entrants: is low because of high hurdles of entry. The industry is categorized by large capital requests, access to distribution channels, large economies of scale and product distinction. New entrants will require spending a lot of time and money to come in to the market, increase cost advantage, and establish loyal customer base.…

    • 948 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Chp. 8 Outline

    • 1263 Words
    • 6 Pages

    The forecast of demand is critical not only to the organization but to the entire…

    • 1263 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    competition in the industry. The risk is, for how long they can leverage on their existing…

    • 265 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    5e scarf girl

    • 2025 Words
    • 8 Pages

    - Be sure to back up your reflections with specific evidence and references to the text. INCLUDE page numbers where you find evidence in the book.…

    • 2025 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Seagate Case

    • 2025 Words
    • 9 Pages

    The discounted cash flow model provides a way to take into account a company 's future growth predictions (Exhibit XX). Using the scenarios projected by Seagate management and Morgan Stanley, we calculated the future free cash flows for the company, and brought it back to NPV using the company’s weighted average cost of capital (WACC). The WACC calculated uses information provided in the case, and some market information. We came to 14.84% company’s WACC (Exhibit XX).…

    • 2025 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    Seagate Case

    • 488 Words
    • 2 Pages

    The price per megabyte of disk storage has gone done 40% per year from 1980-1995. Seagate believes that in order to stay competitive they must aggressively enhance product offerings and reduce prices. They also believe that in addition to that, they need to provide timely introductions and reduce production costs. However, the surging global demand in this industry is causing some facilities to run at full capacity very frequently, so Seagate needs to tailor its manufacturing strategy for these new products they’re trying to introduce to be based on high-volume and low-cost assembly and test. They are committed to lowering manufacturing costs and increasing volume production, and this is especially important given the short product life cycle in this industry. Given the projected future demand of their newest Cheetah and Barracuda models they need to decide how to structure the assembly and test facilities for each, expecting 300,000 units of each in demand in about a year, but that comes with high demand uncertainty.…

    • 488 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Today, customer taste changes a lot, and their preferences might shift to the other competitive products easily given that they do not get what they need. Their threats also come from other strong competitors, such as Dell and IBM etc.…

    • 318 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Benihana vs Broadway Pizza

    • 1443 Words
    • 6 Pages

    | * Low cost (competitor) * Labor cost * Strategic Marketing * Low waste * Lower overhead…

    • 1443 Words
    • 6 Pages
    Good Essays
  • Good Essays

    In Michael Byer’s Work “Monuments to Our Better Nature” he uses subjective descriptions to help us understand how magnificent he saw the National Mall as a child in comparison to his adult view. Both of his perspectives help us understand what experiences he has been through, and the changes they brought. As a child he takes time describing all the fascinating things he saw, and as an adult he feels nostalgic towards them. His title makes me feel that Byers as an adult he feels like, only the good things in history are represented but not the ones that can make us feel shame.…

    • 988 Words
    • 4 Pages
    Good Essays
  • Good Essays

    With each generation of semiconductor equipment, the technology grew more complex and the number of suppliers became more concentrated. Although these suppliers are concentrated and hold a lot power on the raw materials industry, they lack the incumbent specialization knowledge to compete with incumbent firms. Samsung spent billions in research to develop their current stacking strategy to fit more cells into a semiconductor chip; technology suppliers cannot compete with. Applied Materials, Tokyo Electron, and ASML dominated key segments of the equipment market. Suppliers of memory raw materials would provide discounts of up to 5% for high volume buyers. This shows…

    • 1932 Words
    • 8 Pages
    Good Essays
  • Good Essays

    AMT can also improve its accounts receivable days outstanding ratio by having more control over it’s A/R. Having someone do…

    • 533 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    They are called Olympians because they live in Mt. Olympus, the highest mountain in Greece which is located in Thessaly in North East of Greece…

    • 3456 Words
    • 14 Pages
    Powerful Essays
  • Powerful Essays

    Reverse Auction

    • 2056 Words
    • 9 Pages

    Items or service availability/ supply variance/ inventory risks/competitive market demand/ maker-or-buy opportunities/ opportunities of substitution;…

    • 2056 Words
    • 9 Pages
    Powerful Essays

Related Topics