Cree Strategy Analysis

Strategy Analysis

Cree, Inc. is trying to make a choice of market and respective segments related to further its competitive advantage in LED business. Cree has two good market options available with it. One is backlight and other is General Lighting. To select one or the other market or segment, it will take one or another activities or initiatives under process. Which will further be determined by market size, growth opportunities, customer’s willingness to pay etc. Also, Cree will look into its present business capabilities (competitive advantage) and the required future adaptable capabilities to counter the competition from new entrants and other competitors around the world of LEDs.

The given information in case has helped us to differentiate both the segments in terms of two very important verticals which will help CEO of Cree Inc. to make decisions about the choice of segments. The two verticals are a) Market/ Customer demand and b) Industry or market size.

Backlighting only.

Back-Lighting market is basically driven by Automobile companies (VOLKSWAGEN etc.) and Cellular or mobile phone companies (SIEMENS, SAMSUNG, APPLE etc.). However, these markets are getting saturated. Even if more efforts in terms of monetary flow, technology breakthrough will not be able to capture a bigger chunk of global market. Which will gradually lower the profit margin in these specified customer segments.

In terms of Industry size, as mentioned earlier that though the market is very huge and there is going to be more demand in near future. Still there are few issues which cannot be neglected such as there are limited numbers of key buyers (mobile companies) but there is high competition among suppliers of Back-lighting LEDs resulting into overcapacity

However, it is quite evident that future growth in this segment can be achieved from format videos and display screens. Example LED TVs. LED TVs are expected to grow from 3.1 M in 2009 to 26 M in 2010 to 129 M by 2013....