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STRA 6222

Saranya Guruvayurappan
SMU ID: 46455413

Case Writeup – AmTran Technology Ltd.

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 fewer licensing monopoly in the business, the competition in the TV
technology and display market is very high. In the last few years, the LCD and overall OEM
market has become commoditized. This has led to high pricing pressures and very small margins.
There are now several component manufacturers around the world, specifically in Asia who
specialize only in adapting to new technologies and manufacturing these components at very
cheap prices. It is imperative to note that even large players in the business like Sony saw it
economically beneficial to move away from vertical integration and to create strategic
partnerships with low cost component manufacturers to create their branded TV sets. This is
primarily due to the amount of capital that needs to be invested in new manufacturing technology
and facilities along with their heavy investments in branding and distribution. Although, AmTran
have exhibited great technological expertise in adapting to newer technologies, they have not had
to bear the full brunt of spending on downstream operations. Lately, with the increased
advancement in Chinese technology manufacturing houses, AmTran should not move towards
vertical integration (VI) and venture into downstream operations such as branding and

Analog Television to Digital Displays: After the early reliance in analog know-hows such as RCA technology. which were designed and mounted on circuit boards while wiring. the TV market started moving towards to LCD displays. It was not until 2000s that manufactures were able to extend this technology to produce large sized LCD displays for television sets. However. Two major technological forces drove the evolution to the digital receivers. The excess capacity and oversupply resulted in downstream manufacturers could incorporate component producers into their manufacturing and assembly process almost interchangeably. which led to lower manufacturing costs. the TV technology market has begun a major transitive journey from analog to digital way of things. from the 20 th century. even large firms like Sony was specializing in selling CRT-based television sets. at the time this way used mostly for laptops and other modular computer markets. The signals flowing through these components had to be carefully matched to the different sections of the equipment. but the monitor performance in such TVs are constantly affected by fine differences in electronic signals. the need for . This advancement represented the reduced effort in designing and producing the chips inside TV sets. Also. In 1980s. The first was the advancements in semiconductor technology. Initially.STRA 6222 Saranya Guruvayurappan SMU ID: 46455413 Which kind of innovations have impacted the television technology? Which implications does this have for industry and company structures? From the early 1990s. The technological effects can be split into three buckets of advancements. Analog Receivers to Digital Receivers: Analog TVs used several components like transistors. The technology became very popular soon due to the lack of IP restrictions on it. resistors and capacitors. the color display versions of liquid crystal displays were developed for sharper display.

they could establish themselves as leaders in the digital display industry across laptops. Newer sets were able to receive both types of signal without a convertor. Certain firms like DirecTV were pioneers in digital transmission. It is interesting to note that by the end of this transition. the LCD flat panels have slowly been replaced with LED TV sets. the most important attribute that AmTran needs to possess to be successful is flexibility in this market. Analog Transmission to Digital Transmission: In early 1990s there were certain movements towards standardizing digital TV broadcasting to make HD video available through all regular channels. My recommendation to AmTran would be to incorporate more breadth in their market than depth. AmTran should further leverage their existing relationship with a known brand like Vizio and try to expand from being just a low cost TV producer to making high quality TV sets to cater to the modern technology. Analog transmissions used radio spectrums. The ease with which data transfer and smart computational technology is being included in these devices also needs to be noted. Which recommendations would you make to Wu to prepare AmTran for it’s future? Given the speed at which the technological advancements have shaped the industry’s landscape. a single firm did not hold proprietorship over any piece of digital television value chain.STRA 6222 Saranya Guruvayurappan SMU ID: 46455413 higher quality moving images on TV propelled the transition to digital receivers. . This way. which were highly inefficient relative to modern technology. This translates to a free competition in the TV manufacturing industry. tablets. Receiving digital transmission were not restricted by the TV equipment. Wu should continue to specialize in adapting to new technology and producing state of the art components. TVs and maybe even smartphones. Lately. They could use the economies of scope to also provide these technologically advanced components to screens outside of TVs.