STRA 6222
Saranya Guruvayurappan SMU ID: 46455413
Cas eWr i t e up–AmTr anTe c hnol ogyLt d.
Should AmTran move into branded distribution, e.g. by licensing the JVC brand?
The TV market has been subjected to huge technological transitions over the years. Especially in the 20th century, the technological advancements in digital displays, transmission and user preference has been constantly changing. As clearly noted in the case, due to the number of players and feer licensing monopoly in the business, the competition in the TV technology and display market is very high. !n the last fe years, the "#$ and overall %E& market has become commoditi'ed. This has led to high pricing pressures and very small margins. There are no several component manufacturers around the orld, specifically in Asia ho speciali'e only in adapting to ne technologies and manufacturing these components at very cheap prices. !t is imperative to note that even large players in the business like (ony sa it econ economi omical cally ly benef benefic icia iall to move move aay aay from from vert vertic ical al inte integr grat atio ion n and and to creat createe stra strate tegi gicc partnerships ith lo cost component manufacturers to create their branded TV sets. This is primarily due to the amount of capital that needs to be invested in ne manufacturing technology and facilities along ith their heavy investments in branding and distribution. Although, AmTran AmTran have e)hibited great technological e)pertise in adapting to neer technologies, they have not had to bear bear the full full brunt brunt of spendi spending ng on donst donstream ream operation operations. s. "ately "ately,, ith ith the increa increased sed advancement in #hinese technology manufacturing houses, AmTran should not move toards vert vertic ical al inte integr grat atio ion n *V!+ *V!+ and and vent ventur uree into into dons donstr tream eam oper operat atio ions ns such such as brand brandin ing g and distribution.
STRA 6222
Saranya Guruvayurappan SMU ID: 46455413
Which kind of innovations have imacted the television technology? Which imlications does this have for industry and comany structures?
rom the early -0s, the TV technology market has begun a major transitive journey from analog to digital ay of things. The technological effects can be split into three buckets of advancements. Analog Television to Digital Displays:
After the early reliance in analog kno/hos such as #A technology, from the 20 th century, the TV market started moving toards to "#$ displays. !nitially, even large firms like (ony as speciali'ing in selling #T/based television sets, but the monitor performance in such TVs are constantly affected by fine differences in electronic signals. !n -10s, the color display versions of liuid crystal displays ere developed for sharper display. 3oever, at the time this ay used mostly for laptops and other modular computer markets. !t as not until 2000s that manufactures ere able to e)tend this technology to produce large si'ed "#$ displays for television sets. The technology became very popular soon due to the lack of !4 restrictions on it. The e)cess capacity and oversupply resulted in donstream manufacturers could incorporate component producers into their manufacturing and assembly process almost interchangeably. Analog Receivers to Digital Receivers:
Analog TVs used several components like transistors, resistors and capacitors, hich ere designed and mounted on circuit boards hile iring. The signals floing through these components had to be carefully matched to the different sections of the euipment. To major technological forces drove the evolution to the digital receivers. The first as the advancements in semiconductor technology. This advancement represented the reduced effort in designing and producing the chips inside TV sets, hich led to loer manufacturing costs. Also, the need for
STRA 6222
Saranya Guruvayurappan SMU ID: 46455413
higher uality moving images on TV propelled the transition to digital receivers. Analog Transmission to Digital Transmission:
!n early -0s there ere certain movements toards standardi'ing digital TV broadcasting to make 3$ video available through all regular channels. #ertain firms like $irecTV ere pioneers in digital transmission. eceiving digital transmission ere not restricted by the TV euipment. Analog transmissions used radio spectrums, hich ere highly inefficient relative to modern technology. 5eer sets ere able to receive both types of signal ithout a convertor. !t is interesting to note that by the end of this transition, a single firm did not hold proprietorship over any piece of digital television value chain. This translates to a free competition in the TV manufacturing industry.
Which recommendations !ould you make to Wu to reare AmTran for it"s future?
6iven the speed at hich the technological advancements have shaped the industry7s landscape, the most important attribute that AmTran needs to possess to be successful is fle)ibility in this market. "ately, the "#$ flat panels have sloly been replaced ith "E$ TV sets. The ease ith hich data transfer and smart computational technology is being included in these devices also needs to be noted. 8u should continue to speciali'e in adapting to ne technology and producing state of the art components. AmTran should further leverage their e)isting relationship ith a knon brand like Vi'io and try to e)pand from being just a lo cost TV producer to making high uality TV sets to cater to the modern technology. &y recommendation to AmTran ould be to incorporate more breadth in their market than depth. They could use the economies of scope to also provide these technologically advanced components to screens outside of TVs. This ay, they could establish themselves as leaders in the digital display industry across laptops, tablets, TVs and maybe even smartphones.