A study on the business strategy to increase the competitive advantage of conventional wire and cable industry - A case study of T company.

• Main Authors: Jui-Hsing Chiu, 邱瑞興
• Other Authors: Hilary Chen
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/84485190528924345040

碩士 === 元智大學 === 管理碩士在職專班 === 101 === The cable and wire industry has been developing for over half a century. Cable is an indispensable conductor used in the electrical and electronic industry, telecommunications industry and in the construction industry for electric power transmission and telecommunications. The main products are bare wire, enameled wire, hook-up wire, electric cables and communication cables Domestic cable manufacturers use imported copper plate and refine it into wire. The wire is then insulated by coating a layer of metal, such as silver, gold or tin. Afterwards individual wires are bound together to produce larger cables. The cost of copper in its raw state is higher than any other cost in cable manufacturing taking up to 70% to 95% of the total business cost. Taiwan does not produce copper ore therefore the cost of it and the selling of it fluctuate according to the international stock market. The profit from the cable industry comes from the slender margins from processing cables. The domestic companies often reduce production costs by investing large amounts of resources to increase its production capacity and therefore run non-stop continuous machinery production processes. This not only generates more units but higher margins, greater revenue and therefore greater profits. However large stores of raw materials or semi-finished products lower the selling price of cable and decrease its profit because it is inefficient and wasteful. In order to combat this firms run a low leverage and high risk management styles which result in numerous firms running up debts or deficits and ultimately going bankrupt. How do small firms without large resources survive under the era of meager profit when firms do not gain from economies of scale anymore and have no advantage over their competitors and facing rising cost of raw materials. How do they create more opportunity and competitive advantage with resource constrained? What is the direction for its future management? The study will conduct an environmental analysis on the industry and focus on its production characteristics. Porter’s five point SWOT analysis and VRIE’s internal resources and capability analysis will be used to assess T company’s internal strength and weakness as well as external opportunities and threats. An analysis on the company’s state of business operation will also be surveyed so as to make a strategic change to the existing business plan with the aim of the analysis is to increasing the company’s competitive advantage and enabling sustainable management into the foreseeable future.