Thesis: Power of Buyers in Semiconductors Industry

Sample Thesis Paper

Buyers have relatively little bargaining power considering the fact that the semiconductor producing segment of the market is dominated by a small number of key manufacturers. We can deduce from this fact that this advantage allows manufacturers to set prices under minimal risk from competitors.

Availability of Substitutes

The threat of substitutes is more or less based on the time from the actual launching of the product to the time that it takes for the intellectual protection patent to expire or for rival companies to come up with a similar product. Reverse engineering technology has allowed rivals to carry out copy their competitors products extensively in the last few years and the still continue to do so (Schwartz, 2001).

Competitive Rivalry

The degree of rivalry that prevails in this particular industry is of an exceptionally high degree and the race to make faster, cheaper, smaller and more efficient semiconductors is always red hot. The high degree of rivalry is so intense that it extends well into every division of every company involved in this industry, particularly in the Research & Development divisions  (Malerba, 1985). The outcome of this scenario is that the technology is becoming efficient, effective and more economical with every new product that is brought into the market.

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