Introduction
The purpose of this report is to determine and identify the “attractiveness” of the U.S. television (TV) manufacturing industry, i.e. to analyze the opportunities and threats that a company and its industry face due to the external environment. This external environment project will therefore after defining some key terms, analyze the dominant economic characteristics, the driving forces, and the competitive environment of the U.S. television manufacturing industry. To simplify matters the analysis will be performed from the point of view of an audio and video equipment producer, who is planning on entering the television manufacturing industry.
Key Terms
For a better understanding of the report this section will provides definitions of some important key terms used in the TV industry.
− CRT: cathode ray tube, the primarily technology used for TVs
− LCD: liquid crystal display, newer technology used for flat panel TVs, called LCD TVs
− PDP: plasma display panel, relatively new technology used for flat panel TVs, called plasma TVs
− DLP: digital light processing, relatively new technology used for rear-projection TVs
− LED: light-emitting diode
− OLED: organic light-emitting diode, technology, which is commonly used in mobile phones and digital cameras but is also applicable for TVs and computer screens
− FPD: flat panel display, including amongst others LCD, PDP, DLP, and OLED
− Analog TV: encodes TV picture and sound information as an analog signal
− DTV: digital television, “is a telecommunication system for broadcasting and receiving moving pictures and sound by means of digital signals [1]”
− HDTV: high definition television, “is a television broadcasting system with a significantly higher resolution than traditional formats [2]”
Table of Contents
Introduction
Key Terms
Dominant Economic Characteristics
Driving Forces
Social/Demographic
Technological
Economic
Political/Regulatory
Competitive Analysis
Intensity of Rivalry
Threat of Entry
Threat of Substitutes
Bargaining Power of Suppliers
Bargaining Power of Buyers
Present Level of Competition
Conclusion and Recommendation
Research Objectives and Key Themes
This report aims to assess the attractiveness of the U.S. television manufacturing industry by analyzing the external opportunities and threats. Adopting the perspective of an audio and video equipment producer considering entry into the market, the study evaluates economic characteristics, environmental driving forces, and the competitive landscape to provide a strategic foundation for potential market entry.
- Analysis of dominant industry economic characteristics and growth trends.
- Evaluation of social, demographic, technological, economic, and political driving forces.
- Application of Porter’s Five Forces to determine industry rivalry and competitive intensity.
- Assessment of the shift toward flat-panel and HDTV technologies.
- Strategic recommendation focused on emerging OLED technology as a potential entry point.
Excerpt from the Book
Bargaining Power of Suppliers
The question is, if suppliers of TV components have bargaining power and if not, why not.
Some of the important LCD and plasma TV suppliers are LG.Philips, LPL, Samsung, AUO, CMO, and Sharp. However, besides LG.Philips, Samsung, and Sharp, which assemble the TVs themselves, the suppliers don’t have enough bargaining power. Except they produce some important inputs and components, which only they are able to produce. However, since the “TV manufacturers outsource their products along a global supply chain … [and in particular standardized] parts from all over the world are shipped to a main factory where the TV is [just] assembled [40],” the TV assembler has the power and free choice from which supplier or from which manufacturer of specific parts to get their components. Again, since the input factors have become more and more customized and became available not only from a few sources but from various component makers, the power in the relationship between TV manufacturer and input supplier is clearly on the side of the manufacturer. This observation can be emphasized by the fact that more TV manufacturers are getting into vertical integration, i.e. they have begun to produce some special devices themselves. Some good examples for it are the joint venture between LGE & Philips as well as the cooperation between Sony & Samsung [32]. Overall it can be observed that the TV manufacturing market with respect to the supplier is not as competitive as expected, even though the supplier market is highly competitive.
Chapter Summaries
Introduction: Outlines the report’s goal to analyze the U.S. television manufacturing industry’s attractiveness for a new market entrant and defines core industry terminology.
Dominant Economic Characteristics: Reviews the market value, growth of shipments, and the ongoing transition from analog and CRT technology toward digital, flat-panel, and high-definition televisions.
Driving Forces: Examines external pressures across social, demographic, technological, economic, and political categories that impact the long-term survival and performance of firms in the industry.
Competitive Analysis: Utilizes Porter’s Five Forces model to assess industry rivalry, entry barriers, substitute threats, and supplier/buyer power to determine the current competitive landscape.
Conclusion and Recommendation: Synthesizes the analysis, identifying that while the current market is highly competitive and mature, opportunities for new entrants lie in emerging technologies like OLED.
Keywords
U.S. television manufacturing, Flat panel display, HDTV, Porter's five forces, Market attractiveness, Industry rivalry, Digital television, OLED, LCD, Plasma, Consumer electronics, Economic environment, Technological trends, Supply chain, Market entry strategy.
Frequently Asked Questions
What is the primary purpose of this research report?
The report assesses the attractiveness of the U.S. television manufacturing industry for a new entrant by evaluating environmental opportunities and threats.
What core thematic areas does the report examine?
The report covers dominant economic characteristics, social, technological, economic, and political driving forces, and a comprehensive competitive analysis.
What is the central research question addressed in this document?
The report seeks to determine the "attractiveness" of the industry by analyzing the competitive intensity and the external environment to guide a potential market entry decision.
Which analytical framework is utilized for the industry assessment?
The study employs Michael Porter's "Five Forces" model: Intensity of Rivalry, Threat of Entry, Threat of Substitutes, Bargaining Power of Suppliers, and Bargaining Power of Buyers.
What topics are addressed in the main body of the analysis?
The main body details market data on TV shipments, technology shifts (CRT to LCD/Plasma), demographic influences on consumer behavior, and specific barriers to market entry.
Which key terms are essential to characterize this industry?
Key terms include Flat Panel Display (FPD), HDTV, CRT, LCD, Plasma, DLP, and OLED, which represent the technological evolution of the TV market.
How does the author characterize the threat from PC monitor manufacturers?
The author identifies PC monitor manufacturers, such as Dell and Gateway, as perhaps the major threat of substitutes, as they are already experienced in LCD production and can easily incorporate TV tuners.
What is the recommended strategy for a new company wanting to enter this market?
The report suggests avoiding the mature LCD and plasma markets, which have shrinking margins, and instead focusing R&D on emerging OLED technology.
How do demographic trends, such as the aging population, affect TV manufacturers?
The aging population, particularly those over 65, forces manufacturers to adapt products toward this demographic, considering needs like accessibility and ease of use.
- Quote paper
- Christian Rodiek (Author), 2007, External Environmental Analysis - The U.S. Television Manufacturing Industry, Munich, GRIN Verlag, https://www.grin.com/document/69655
