Category: Toshiba

Introduction

Companies attain growth due to a number of factors. Some of these reasons include the adoption of business management strategies and ideas from industry leaders. Tech-Shield credits its current growth in the electronic sector to its leadership structure. The management has implemented certain strategies used by Toshiba, a leading company in the industry. According to the Harvard Business Review (45), organizations should adopt critical thinking and creativity to enhance their growth. Leaders in a given entity can achieve this form of thinking through the adoption of a number of strategies. Such approaches include enhancing their skills and exchanging ideas with their peers. Another strategy involves reading inspirational books. A book like The Prince by Nicolo Machiavelli may help corporate leaders to achieve critical thinking.

The current paper is written against this background of inspiration books and leadership among contemporary organizations. The paper provides a link between Machiavelli’s school of thought and corporate management. The author of the paper takes into consideration the ‘individualistic’ implications of this link. The philosophies illustrated in The Prince and their effects on organizational frameworks are reviewed.

The paper examines whether or not Toshiba adheres to the suggestions advanced in The Prince. Machiavelli (1) introduces the element of choice by analyzing the issue of how and why persons should opt for freedom or for the leadership of a prince. In line with this sentiment, the paper assesses how Toshiba eschews the arguments made in this book. To this end, the author highlights the effects of adherence or avoidance of the said ideas in relation to Tech-Shield. Finally, an analysis of the manifestation of the Machiavellian philosophies in Toshiba is outlined.

The Individual and the Organization from a Machiavellian Perspective

The best way to understand the requirements of a company is to treat it as an individual. Every individual in the society has unique needs, requirements, and experiences. The same applies to organizations, which vary from one to the other. The variation is brought about by the uniqueness of the industry within which the entity is operating from, as well as by the internal composition of its resources and leadership structure. According to the Harvard Business Review (78), the word corporation is derived from the Latin term corpus. The Latin word loosely translates to a body. In light of this, it is apparent that Machiavelli’s individualistic claims of a person’s actions towards their enemies can be used in a corporate setting. The similarity between the Machiavellian individual and an organization is in terms of competition.

Toshiba’s Adherence to Machiavellian Ideas: A Critical Review

As mentioned earlier in this paper, Machiavellian ideas and philosophies can be used to analyze the operations of a given company in contemporary society. In the Harvard Business Review (18), it is pointed out that these ideas can be advanced without the full understanding of the philosophical aspects behind them. Some of them include presence and research.

Presence in the Context of Toshiba

Toshiba adheres to the Machiavellian philosophy of presence. With regards to this argument, Machiavelli (6) postulates as follows:

“…if one is on the spot, disorders are seen as they spring up, and one can quickly remedy them; but if one is not at hand, they are heard of only when they are great, and then one can no longer remedy them” (Machiavelli pp. 6-7).

A company that intends to occupy the leadership position in the market must assert its presence. In the quote above, Machiavelli (6) argues that a state that is conquered is only stable when the one who has taken it over is present. Similarly, Toshiba must establish its footprint in the markets it has conquered. A critical analysis of the company’s operations reveals that it has a presence in most of the regions where it has established a market (Toshiba 15). In addition, the company has a research and development department that is tasked with the responsibility of establishing ‘disorders’ in the products ‘once they spring up’. The department is also expected to ‘remedy’ such mistakes. The same is in line with Machiavelli’s (6) philosophy of presence. By adopting this point of view, the company has ensured that its presence in the electronics industry does not fizzle out.

Research in Toshiba

Research is best developed with the help of a studious lifestyle. A similar sentiment is advanced by Machiavelli (69) when he argues as follows:

“… to exercise the intellect, the prince should read histories and study the actions of illustrious men, to see how they have borne themselves in war, to examine the causes of their victories and defeat, so as to avoid the latter and imitate the former”(Machiavelli 69).

In the scenario depicted in the quote above, Machiavelli (69) argues that leadership is only effective when one is dedicated to study. As such, the leader should be aware of what happened in the past to prepare for similar occurrences in the future. On its part, Toshiba adheres to this idea by placing emphasis on a culture of creativity. According to the Harvard Business Review (44), research and development are important elements in any given organization. The importance of this aspect is made apparent in Toshiba, where the company’s research and development department focuses on the analysis of errors committed in the past. In addition, the department analyzes the preferred market requirements. The knowledge acquired from such research enhances the innovativeness of this company. It helps the organization to retain its leadership position in the market.

How Toshiba Avoids Machiavellian Ideas

Failure to Prepare for the Worst

Many contemporary organizations face challenges that portend a bleak future for their business operations unless they are resolved. Machiavelli (67) argues that a leader must be prepared for a worst case scenario. The reason is that “the tides can change at any time” (Machiavelli p. 67). To this end, Machiavelli makes the following assertion:

“A wise prince ought to observe some such rules, and never in peaceful times stand idle, but increase his resources with industry in such a way that they may be available to him in adversity, so that if fortune changes, it may find him prepared to resist her blows” (Machiavelli p. 67).

The concern here is the leader’s ability to navigate the murky waters of their industry. Machiavelli (67) argues that a prince must remain alert when at war. A critical review of Toshiba reveals that the company has failed to adhere to this philosophy of preparedness as advocated for by Machiavelli (67). For example, the company focuses more on corporate social responsibility (CSR) at the expense of developing a growth strategy. In spite of the ethical connotations of CSR, Toshiba should avoid spending most of its resources on this venture.

According to the Harvard Business Review (91), Toshiba was overtaken by Samsung as the market leader owing to the latter’s heavy investment in research and development. Samsung does not focus a lot on CSR. Toshiba appeared comfortable with its position in the electronics market (Harvard Business Review 91). Disregarding the philosophy of making arrangements for the worst makes the company to assume that its competitors are not a threat. The same explains why Toshiba is still finding it hard to regain its position in the global electronics market.

Effects of Adherence to and Avoidance of Machiavellian Ideas on Tech-Shield

Adherence to Research

Just like Toshiba, Tech-Shield adheres to the philosophical requirement of research as set out by Machiavelli. As already indicated in this paper, research defines the studious nature of a successful leader. Machiavelli (69) illustrates this point by arguing that any prince who assumes the mantle of leadership should conduct extensive research on their situation. According to Harvard Business Review (134), electronic giants like Toshiba and Tech-Shield fall under the category of technology-based companies. Such entities can enhance their competitiveness by adopting an innovative strategy. Research and development is the major basis for such creativity.

Tech-Shield has benefited from the adoption of Machiavellian philosophy of research and development. The positive effects associated with this approach are some of the reasons why Tech-Shield continues to embrace change. For instance, new innovations have helped the company to secure more funding. The financial resources are mobilized due to the potential attributed to the various patents held by the company. In addition, adherence to the research philosophy has led to an upsurge in the quality and quantity of skilled labor. According to Harvard Business Review (116), research and development encourages extensive study among employees. Consequently, the entire workforce at Tech-Shield has adopted a culture of research.

Avoiding the Philosophy of Universal Trust

Trust is an expensive asset in the corporate world. For a long time, Tech-Shield has failed to adhere to the idea advocated by Machiavelli with regards to universal trust. The results of this choice are detrimental to the company’s operations. Machiavelli (15) argues against universal trust. The scholar writes:

“From this general rule (…) he who is the cause of another becoming powerful is ruined; because that predominancy has been brought about by astuteness or else by force, and both are distrusted by him who has been raised to power” (Machiavelli p. 15).

The sentiments raised by Machiavelli above suggest that one should be careful when trusting other people. Machiavelli (15) argues that universal trust can lead to betrayal. Tech-Shield has disregarded this philosophy. In most cases, the company has divulged details of some of its technological secrets to potential investors before patenting them. The consequence of this universal trust is the loss of intellectual property. As a result, the company incurs huge financial losses.

Indications of Machiavellian Philosophies in Toshiba

Adopting a business strategy is essential to the growth of a company. By adhering to Machiavellian philosophy of study, Toshiba encourages the employees to engage in more research and development. Consequently, the company has managed to diversify its portfolio to conform to the market demands. For instance, the organization has come up with various eco-friendly products (Toshiba 13). The same is in line with the rising demand for electronic devices that conserve energy.

Adherence to a studious lifestyle, as already indicated in this paper, enables an organization to remain relevant in the industry. According to Harvard Business Review (169), an analysis of the global technological market reveals that several companies, such as Dell, have succumbed to the pressure brought about by competition. Such organizations are forced to change the way they operate. However, Toshiba has remained strong in the electronics market in spite of the threat posed by competitors. The company’s leadership predicts a brighter future owing to the ongoing research in satellite technology (Toshiba 17). As such, the results (manifestations) of adherence to Machiavellian principles are made evident given that Toshiba remains a key player in the global electronics market.

Conclusion

A winning business strategy requires critical thinking and creativity on the part of the management. Machiavelli (23) argues that relevance is needed if such a strategy is to succeed. The Machiavellian philosophies illustrated in this paper can be used to improve business operations. Such philosophies as research and universal trust are critical to the success of a company. They are especially important to companies operating in the electronics industry.

In comparison to Toshiba, Tech-Shield is a young company. The organization can achieve growth by implementing some of the Machiavellian ideas illustrated in this paper. For instance, if Tech-Shield avoids universal trust, it can address the issue of the huge losses associated with theft of intellectual property. In the long run, the company can improve its operations by adopting the various Machiavellian philosophies that lead to positive growth.

Works Cited

Harvard Business Review. Management Tips: From Harvard Business Review, Boston: Harvard Business Press Books, 2011. Print.

Machiavelli, Niccolo. The Prince, New York: Penguin Classics, 1515. Print.

Toshiba 2013, 2013 -2014: Corporate Profile-Toshiba Today. Web.

The case under consideration is Toshiba accounting scandal of 2015. The main issue is that the conglomerate’s senior management recognized that the company’s earnings have been overstated by around $2 billion. Even though the timeframe of the scandal is seven years, the outcomes are still significant because the estimates were four times less than the presented financial outcomes (Matthews & Gandel, 2015).

This scandal pointed to the use of fraudulent accounting practices by Toshiba. The main factor contributing to the challenge is the fact that managers are free to postpone reports or move costs into later years that results in discrepancies in company’s financial outcomes. In this case, the main ethical issue is being dishonest with the conglomerate’s stakeholders and shareholders. In this way, they are ones affected.

The main implication is that stakeholders and shareholders do not possess truthful information regarding the operation of Toshiba, so they cannot make appropriate decisions about their further cooperation with the company. For instance, they might believe that the company is more successful that it is in fact and invest in it. As a result, such a decision may turn into a financial failure. This example is a common implication for community.

Still, there are other stakeholders to consider. For instance, owners suffer financial losses due to ruined reputation. Another group of those affected are employees because commonly lose confidence in their company and senior management. The same is true for customers that may distrust the company, thus decreasing the customer base. Except for these groups, marketers and vendors may as well be impacted because they fail to estimate the real condition of the firm and develop ways to cooperate with it.

Finally, there are managers who face unnecessary difficulties in running the company, such as the need for addressing fraud implications, and regulators that are forced to review standards in order to conclude on their effectiveness and revise them in case of necessity.

Speaking of internal accounting regulations, none of them were violated because, according to Toshiba’s corporate culture, postponing reports and moving costs to following years is allowable. These regulations are governed by senior management. Nevertheless, the considered scandal is a proper example of violating the Generally Acceptable Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB).

According to these rules, accounting, as a process, should be timely, while, as a result, it should be precise. In this case, reports were neither timely (because the problem covered a seven-year reporting period) nor precise (because the reported information was not accurate). The same requirements to accounting (International Financial Reporting Standards or simply IFRS) are developed and published by another influential institution – the International Accounting Standards Board (IASB). Therefore, regardless of the corporate culture specificities, the scandal is a representation of ignoring generally acceptable rules and standards of accounting.

The abovementioned institutions are some of the regulators that might impact accounting rules. Other influential regulators are governmental and international accounting agencies and financial institutions. Some of them are the following: Governmental Accounting Standards Board (GASB), American Institute of Certified Public Accountants (AICPA), U.S. Securities and Exchange Commission (SEC), and Internal Revenue Service (IRS).

Still, it is essential to note that they are the U.S.-based regulators. As for international regulators, they are the Financial Accounting Foundation (FAF) and the one mentioned above – IFRS. Except for them, these are governments that might as well influence accounting by passing standards and legal provisions in accounting (Pierta, McLeay, & Ronen, 2014). Nevertheless, regardless of a variety of regulators, all of them are external and have a direct impact on the process of developing internal accounting procedures and ethical codes of conduct.

References

Matthews, C., & Gandel, S. (2015). The 5 biggest corporate scandals of 2015. Web.

Pierta, R. D., McLeay, S., & Ronen, J. (2014). (Eds.). Accounting and regulation: New insights on governance, markets, and institutions. New York, NY: Springer.

Toshiba has been at the center of a significant accounting scandal in 2015, as internal audits revealed that the company’s records contained numerous inconsistencies. The alterations were primarily skewed to inflate the corporation’s profit statements above the actual values, and the process had been going on for approximately seven years. Toshiba’s CEO, as well as numerous other board members, resigned as a result of the controversy. This case study investigates possible decisions for the corporation after the discovery of the issue as well as its potential causes.

Different Behaviors during the Scandal

Toshiba’s response to the arising controversy was mostly a standard corporate reaction to a large-scale mistake. According to Misawa (2016), the new CEO of the company issued a public apology to the shareholders and stakeholders and promised a return to the founding principles of the organization. In addition, he ordered a re-evaluation of the financial results from the years during which the deception had taken place. Lastly, the company increased the proportion of outside directors to ensure that the board’s activities would be monitored more closely. While significant amounts of trust and goodwill had been lost, Toshiba rearranged itself and continued operations.

In most respects, the corporation’s response to the discovery of the reporting issues was appropriate, as it had followed the guidelines outlined in the investigative report issued by the auditing company. However, its reaction to the actions of the executives responsible for the situation can be considered lacking. While no one disputed their influence on the case and their responsibility for the wrongful reporting, they were allowed to resign and partially save their reputation.

Furthermore, their opinion on the motives that pushed them to establish unrealistic goals and overlook fraudulent reporting remained unheard. A more thorough investigation and a formal firing would have lent Toshiba more insight into the issues present in its corporate culture and created a more powerful image of changing the undesirable practices.

Toshiba Scandal and Lifetime Employment

The work ethic of Japan was likely responsible for a part of the motivation behind the false reporting. The job market is less fluid there than it is in the West, and employees tend to work for a single company without changing jobs. As a consequence, contradicting one’s superiors or calling attention to unhealthy practices within the company is often too risky. The results of such an act would be uncertain, but the person’s superiors would likely remember the worker in a negative light and be less likely to give him or she pay increases or promotions.

The tendency manifested itself in Toshiba, where employees would falsify records when faced with unrealistic expectations rather than discuss the difficulty of the task with the management. The superiors’ excuse of disguising the goals as “challenges” exacerbated the issue, creating a situation where the workers did not have to meet the target but would be viewed poorly if they fell short.

Conclusion

Toshiba’s response to the scandal was largely commendable, as the corporation went through a significant restructuring in an attempt to eliminate the causes behind the issues. However, if the company interviewed the responsible executives and fired them instead of allowing them to resign, it would have established a stronger image and learned more about the climate that fostered fraudulent accounting. Overall, however, the scandal can be attributed to the Japanese cultural trait of employees remaining at one company throughout their career, which made non-executive employees remain quiet about their concerns and falsify the numbers to keep their positions.

References

Misawa, M. (2016). The Toshiba accounting scandal: How corporate governance failed. Web.

Introduction

Toshiba is a pioneer in the development of electric and electronic products in Japan and around the world. The company started investing in research and development in 1973. So far, it has been able to retain leadership in several innovations in its different markets. Its current trading name was initiated in 1984 to symbolize swifter decision making. At the same period, the company opted to focus more on semiconductors and its personal computer (PC) business. However, it is also innovating in general consumer electronics products, such as televisions, as well as industrial technology equipment (Toshiba, 2014b). This report reviews the Toshiba’s core business of making semiconductors, with an additional focus being on its competitiveness, the technological changes taking place in its industry, available competitive forces, as well as marketing opportunities and its other business prospects.

What market the company belongs to

As a semiconductor manufacturer, Toshiba belongs to an oligopoly market. However, the company belongs to a perfectly competitive market when considering its consumer electronic goods, including laptops. In the first case, the competitors of Toshiba are Texas Instruments, Samsung, and Intel. In the second case, there are more than ten competitors in the global market, including HP, Samsung, Sony, Apple, Lenovo, and ASUS.

One of the characteristics of the oligopoly semiconductor market is that there are primary producers keen on mimicking the strategies employed by their rivals. Therefore, the technology advancements, which dictate product differences among manufacturers, have progressed gradually for all rivals. The following graph shows the market share of Toshiba’s semiconductor manufacturing business. Much of the analysis of the company done in this paper will be reviewing the semiconductor and storage product divisions of Toshiba, with reference to its consumer electronics division. Toshiba trails Samsung in the global production of NAND flash chips, where it acts as a primary producer. However, in its other business, the company maintains complex relationships with other suppliers by being a competitor in their consumer electronic and computing goods or it remains as a supply partner.

Toshiba SWOT analysis

Strengths

Toshiba has signed agreements with second tier manufacturing companies that rely on its semiconductors and memory chips. The companies have global presence and provide Toshiba with adequate demand to sustain profitable production throughout the year. A second positive for Toshiba is its research and development division that allows the company to come up and use the latest technologies to make cutting edge chips that differentiate the company from the rivals. In addition, Toshiba has a global presence, able to serve markets effetely without frustrating customers with delays in goods delivery or after-sale services.

Weaknesses

The company depends on subcontracts in its supply chain, where some of them are in developing countries that have less reliable political and economic conditions. The company also has to deal with a large number of legal proceedings that affect its global business, which relies on copyright and intellectual property protection laws.

Opportunities

A positive outlook exists in the semiconductor market, as demand for finished electronic goods increase globally. Toshiba also has a chance to fit into production agreements for new product launches with its partner companies, which would be an additional source of revenue, especially in the NAND memory market and its emerging 3-D chip subcategory (Inagaki, 2014). Emerging markets are offering cheap high quality labor that the company can tap to increase its global economies of scale in manufacturing and limit shipment costs and delays to manufacturing centers used by its various semiconductor and chip clients.

Costs

Despite the growth in the industry, competitors are also moving into the market with better innovations, as in the case of Intel and Samsung that both focus on developing chips for mobile devices. The electronics device industry relies on rapidly-changing technology that can quickly render innovations obsolete. Toshiba also faces risks of regulatory change regarding semiconductors, environment, and chip standards in different markets.

What it the price elasticity of demand for the goods that the company sells, is the demand elastic or inelastic?

The semiconductor industry, which powers the electronics industry, witnessed price drops in the last three decades due to technological improvements and economies of scale. A decrease in prices led to a significant increase in the demand for electronic products, given that semiconductors were the major components. In this regard, one can conclude that the demand for the semiconductors is very responsive to their prices. In the economic relationship, the price is said to be elastic. At the same time, irrespective of the preference status of electronic products, the cost of its components remains fixed as a factor of the eventual price of the electronic commodity (Hasentab, 2011). Thus, even though the price of semiconductors dropped in the last three decades, there could still be demand for electronic goods that does not reflect the relationship between price and demand correctly.

What kind of income elasticity does the products of the company face?

Increases in consumer income directly correspond with increases in the demand for electronic consumer goods, which also increase the demand for semiconductors. Electronic products fill both luxury and normal markets, and they respond favorably to an increase in income. In ceteris paribus, the income elasticity of Toshiba products is positive to reflect the typical quality nature of its products. However, the income elasticity will be more than one for electronic products because they are not necessities. On the other hand, it will likely be less than one in the case of semiconductors because they are essential components required by firms to make different electronic components. In fact, electronic products made by Toshiba or any other company must have semiconductors to function well (Pitzer, Maekawa, Ahmad, Paik, & Carver, 2014).

In the United States, consumer prices fell in December 2014 amid reduced inflationary pressures. As a result, consumers could afford more with the same disposable income levels (Reuters, 2015). Consumers can get higher wages and afford more goods, or they can get an equivalent in the pay rises through price decreases, which also allow them to afford more goods.

Who are their closest competitors?

The closest competitors of Toshiba vary according to the different markets that the company serves globally. In Japan, the rivals are Sony, Fujitsu, and NEC Corporation. Globally, the competitors include Samsung, Intel, Sharp, and Philips, among others.

Existence of substitutes and complementary goods

Semiconductors are virtually identical because they are raw components manufactured by different companies. Any can sell to a client to replace rival company products. However, electronic goods are highly differentiated in terms of marketing, packing, consumer preferences, design, and functionality. In either case, there are close substitutes for all the categories of semiconductors and electronic goods. The company sells NAND flash memories, just like its rivals do for smartphones and tablets. It also sells Laptops that have many substitutes in the market, as well as complementary goods, such as external storage devices (Toshiba, 2014a).

Trends in demand for Toshiba’s products and reasons

The demand for semiconductors made by Toshiba has been decreasing, as indicated by a declining market share of the company in the recent years. However, the overall demand for semiconductors has been growing due to increases in the overall electronics and consumer goods industry. Samsung, which is one of the main rivals to Toshiba, has experienced growth. Samsung concentrates on producing memory chips for computers and other smart electronic devices. It produces NAND and DRAM chips that already incorporate semiconductors. Its business grew by 24 percent in 2014 (Team, 2015).

The figures highlight the potential growth prospects of Toshiba, given that it serves the same market. The demand for Toshiba has been declining because the company is not as innovative as its rivals are. Although semiconductors are identical, rival companies have concentrated on providing value added components to increase their business performance. For example, in the case of Samsung, the rivals are still shifting to the 16nm chip from the 20nm chip. Samsung has already transitioned into producing the 14nm chip, which is better and attracts a higher demand from electronics companies (Team, 2015).

The demand for semiconductor products is caused by the rise in the global demand for smartphones and tablets. It may grow further with the increase in the manufacture of smart watches. The launch of Apple iPhone 6 increased the demand for the NAND flash chips to reflect production efficiency. However, demand does not translate to price increases. In fact, demand only increases when the NAND flash manufacturers like Toshiba can lower prices or charge the same prices for advanced chips (Rodriguez-Ardura, Meseguer-Artola, & Vilaseca-Requena, 2008). Thus, one critical driver of demand will be an increase in technology on the supply side, which will lead to lower prices and improved marketing of finished products on the consumer side, as in the case of the iPhone 6 (DRAM Exchange, 2014).

Possibilities of training labor force further to increase productivity and lower cost of production

Electronics manufacturing is a highly specialized industry that requires massive investments in capital equipment to improve productivity and precision. Nevertheless, labor remains a significant factor of production in the industry because large manufacturing plants are dedicated to product assembly after the initial design of components. Labor input in electronics manufacturing has been in the high-end positions, like engineering and design or management, on one side, and the low-end assembly of factory workers, on the other side. In the first part, an increase in the knowledge of managers, designers, and engineers leads to an increase in their output in terms of the value delivered to the firm.

However, such value depends on the interplay between the different components of the company’s success strategies. Engineers and designers can come up with faster and cheaper ways to produce the same goods and allow the company to increase its economies of scale. At the same time, they could create innovations that are not practical due to funds’ limitations and aggressive competition or lack of demand. Therefore, it is possible to train the labor force to increase production and lower the cost of production, but that is not always the case. In the low-end labor categories, additional training of labor may only increase productivity and not lower the production cost (Ong, 2006).

Profitability and sustaining it

All the market segments covered by Toshiba have room for profitability. The company serves consumer electronics, control systems, elevators, point of sale systems, and semiconductors, among many other segments relevant to its core capabilities. The market size of social infrastructure companies, home appliances, and health care vendors has increased in the last few years and should continue growing. Therefore, Toshiba has the prospects of remaining profitable in the future. As a leading chipmaker, which is its core business in the semiconductor industry, the company experienced increased profits for the last three-quarters of its financial year.

Toshiba has been quick to move to profitable market segments and away from the unprofitable ones. An increase in rivalry and decreased comparative advantages for the firm in some sectors influence its strategic decisions. For example, the company chose to quit the North American TV market because of declining sales. Instead, it chose to focus on the emerging markets as avenues for growth (Agence France-Presse, 2015). Finding markets where demand is high and costs of production allow the company to charge a competitive price is a good move that will ensure Toshiba can make its profits grow.

Ways of making the profit grow

The company expects a rise in the demand for its flash memory chips, which should translate to profitability because the company is a leading chipmaker for Apple Inc., the manufacturer of iPhones and iPads, as well as MacBook computers that are very popular mobile phone and computing devices across the world. The supplier partnership ensures that Toshiba can sell a continuous high volume of its chips to match the increasing demand for Apple’s products (Reuters, 2013). The company can sustain its profitability by entering into other similar supplier partnership agreements with renowned global brand makers in the electronics industry to provide a stable and high demand for its chip business.

Other relevant factors

The growth in the smartphone and the tablet industry globally is fueling demand in the NAND flash memory (Alpeyev, 2015). As the number of smartphone and tablet manufacturers increases, companies like Toshiba can perform favorably in the market as they find a ready demand for their innovative products. In 2014, Toshiba developed the world’s smallest class-embedded NAND flash products as a value addition to its 15nm NAND flash memory chips (Business Wire, 2014).

Therefore, although its rivals like Samsung may be ahead in other parts of the NAND flash technology, Toshiba still has room for growth and profitability if it concentrates on value addition to make its products relevant to the market demand presented by smartphone and tablet manufacturers across the world. Electronic goods are going to mature with time and cause an increase in supply and the lower prices. The only way for Toshiba to continue with its profitability momentum will be to continue divesting into other industries in the long term.

Conclusion

Toshiba can grow its profits and its market share of the global semiconductor industry by focusing on manufacturing agreements with the world’s largest chip buyers. They include companies like Apple and HTC, which manufacture smartphones and tablets to meet a growing global demand for consumer electronic products. Moreover, Toshiba can increase its innovations in other consumer electronics areas, such as home appliances, where being innovative pays off in terms of increased demand for a company’s products. Working closely with its clients ensures that the company understands market demand and end-user consumer preferences. Furthermore, Toshiba must keep costs of manufacturing low, because it operates in an oligopoly market. In this case, changes in one manufacturer’s price can easily upset the market equilibrium to cause gains or losses for other companies. Keeping manufacturing and R&D costs low will ensure that Toshiba remains afloat and capable of funding its innovations for long-term competitive capabilities.

References

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Inagaki, K. (2014). Toshiba, SanDisk joins 3-D chip race: Move looks to capitalize on smartphone growth. Web.

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