CASE II INVENTEC CORPORATION 1. According to industry structure and profitability analysis‚ these are some reasons lead low profitability of Inventec. First‚ rivalry among existing firms; more competitors enter into this filed especially in China‚ the average selling price continues to erode‚ even some of them have to choose price war. At the same time‚ India companies provided high profit margin software and IT service which left the low profit margin manufacturing to traditional ODM companies
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1. Despite its growth and size‚ why is Inventec not very profitable? Several factors may attribute to the low profitability of Inventec in the past few years. Firstly‚ they are operating in a dynamic electronic industry with very short product life cycle. The design of a new product may obsolete in a very short period of time‚ the reliance on frequent technology innovation determined the high industry’s inherent risk. Second factor is the intense competition and the clients and suppliers have comparatively
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ACCT3610 – Business Analysis and Valuation Week 3 (Tutorial 2) – Inventec Case Study 1. Despite the growth of Inventec‚ there were a number of reasons why it was not very profitable. * Firstly‚ they were operating in a highly competitive market. This created pressure to reduce costs and offer the best price to clients‚ thus decreasing profit margins. * Inventec were operating in an industry that has rapid rates of growth and development in terms of products and product types
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Inventec Corporation Case Study Inventec Corporation lies in the ODM industry which designed and manufactured electronic products for client companies that marketed the products globally. Despite its growth and size‚ Inventec is not very profitable for the following reasons. To begin with‚ the ODM industry’s average profitability is low. Net margins of leading taiwan ODM companies range from 1% to 6%. The low profitability is mainly driven by the huge customer bargain power and
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competition‚ (3) unstable‚ fluid relationships with clients‚ (4) plant underutilization‚ (5) flattening gross margins‚ (6) lack of brand identity‚ and (7) the commoditization of the notebook industry all played roles in the company’s performance. Inventec is positioned in an industry in which gross margins have been flattening over recent years‚ largely due to the downward price pressure applied by increasingly intense competition and by clients who hold bargaining power over their suppliers. The
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was lower than expectation is due to the high competition between the many ODMS. Therefore‚ though the field of ODM was once high profitable‚ with the intensive new entrants entered in this industry‚ supply for quality goods are rapidly increasing‚ the profit margin that each competitor could share is simultaneously shrinking. In other words‚ despite the fact that Inventec has done quite well in expansion and decision making‚ strategic direction as well as determination of sustainability in the past
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1. Why was the soft drink industry so profitable? Soft drink industry observed growth rate from its inception 1886 to 1990‚ the consumption of soft drinks saw remarkable growth‚ below data shows the growth in United State’s consumption. Year | 1899 | 1970 | 1980 | 1990 | Consumption | 0.6 | 22.7 | 34.5 | 47.4 | #Consumption: Gallons per person per year Financial figures also back the growth story of the Soft Drink market. ROE % | 1972 | 1975 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 |
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Making sustainability profitable There is a clear aim of this article ‚which is showing to the readers that if we increase sustainability of a company‚ no matter if it is or without the intention of contributing to a better environment‚ could be somehow combined with increasing the bottom line of a company. In the article there were given six examples of companies that contributed to the environment while increasing their finances. The authors mainly focused on the fact that when increasing sustainability
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Is Investing in CSR profitable to business? At any juncture when an organization goes past simply legitimate compliances and emphatically engages in activities that seem to more extensive social good which is for the most part outside the diversions of the firm and is more customized towards the more extensive social responsibility‚ the firm is said to have embraced the concept of Corporate Social Responsibility (CSR) (McWilliams et al.‚ 2006). The terms corporate social responsibility (CSR)‚ corporate
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1 1. Why is the soft drink industry so profitable? An industry analysis through Porter’s Five Forces reveals that market forces are favorable for profitability. Defining the industry: Both concentrate producers (CP) and bottlers are profitable. These two parts of the industry are extremely interdependent‚ sharing costs in procurement‚ production‚ marketing and distribution. Many of their functions overlap; for instance‚ CPs do some bottling‚ and bottlers conduct many promotional activities
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