The Demand-Supply Model and Competitive Analysis of Passive Component Industry
Date Issued
2006
Date
2006
Author(s)
Chen, Ting-An
DOI
zh-TW
Abstract
From 2000 to 2006, passive component industry goes for another industry booming. After several years of over capacity, manufacturers competed by price war and got great loss. To rethink their own strategy, they came out more orderly industry environment. The great loss companies left out the industry, the remained companies adopt M&A to reduce the number of company in passive component industry. Besides, companies have the tacit collude agreement and do not rely on price strategy as the only competitive method. The whole industry goes from pure competitive to co-opetition.
This research first finds out the industry characteristics, including product homogeneous, low investment capital, seasonal demand, etc. then applies five-force model to analyze the situation of customers, suppliers, new entrants and substitutes. To understand the whole picture of industry, it further uses demand-supply model to analyze. Because passive component is derived demand, we should know the end product demand first. This research uses diffusion model to forecast end product demand, such as computer, mobile phone and game console. After that it can find out the passive component demand. On the supply side, we forecast the industry supply through historical data and announced expansion plan. Finally, we can understand the equilibrium of demand and supply and find out that over capacity always exists. If over capacity is always there, the industry will fall into vicious circle.
To solve the conflict of demand-supply, the research use game theory to analyze the interaction between manufacturers. When supply over demand, companies would use price strategy to compete. When demand over supply, companies would fall into capacity expansion contest. No matter what kind of situation, companies will result in low margin because of their interaction. Therefore, at the end of this research, we suggest some strategy to deter new entrants and reduce competitive intensity that makes it possible to keep the profit in industry. Hope that by change the game payoff could make the win-win situation happen.
Subjects
五力分析
擴散理論
被動元件
供需模型
Five-force model
Diffusion theory
Passive component
Demand-supply model
SDGs
Type
thesis
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