Flash Drive

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OVERVIEW OF COMPANY

Flash Memory, founded in the late 90’s in San Jose, CA by a group of electrical engineers, focused on design and manufacture of solid state drives (SSDs), which are memory devices suited for use in smart phones, laptops and net books with high demand and robust growth. Flash had specialized itself in the designing and manufacturing of SSDs, which were sold to distributors, retailers and most importantly to original equipment manufacturers (OEM). Flash memory technology was used for the manufacturing of the flash memory components; these components comprised of 80% of company’s revenue. These memory components were created using flash memory technology, a nonvolatile memory technology that is faster and more resistant to failure when compared with traditional hard disk drives.

SSDs were the faster growing segment in the overall memory industry, with market growth from $400 million in 2007 to $5.3 billion in 2013. The success of these memory components had resulted in compounded average annual sales growth of 7.6% per year since in 2007 for Flash; however the margins were low as a result of intense competition between product offerings and high rivalry. Flash competitors were giants like Intel and Samsung, and other smaller firms like Micron technologies, SanDisk Corporation and Steck Inc.

The Company’s products had short product life cycles, typically realizing 70% of their maximum sales level in their first year, and by year six the products were already obsolete. The products’ life cycle is not stable though; more efficient and innovative products released by competitors can affect it significantly.

COMPETITION

In order to avoid having competitors driving their products out of the market, Flash aggressively spent on R&D in order to improve existing product lines and adding new ones. The Company also hired highly skilled researchers and scientists and supported them with substantial budget allocation in order to stay on top...