AmTran Technology Ltd Case Solution

1. How did AmTran acquire the capabilities it needed to be in the TV business?

Amtran’s initial period pertained to focusing on an R&D type business structure, eventually holding prominence amongst suppliers of electronic products as contract manufacturers primarily for Sony; whereby, Amtran was provided with specifications that were to be followed and to be sold under the client’s brand name. As the industry shifted from analog to digital, AmTran’s capabilities evolved through three key channels i.e. investing in other businesses and focusing on value and schedule to stay ahead of competitors. AmTran partnered with Vizio to enter the US market, which was known for its inexpensive LCD based flat panel TVs. Amtran started to feel the heat from continued commoditization and planned to become Vizio’s ODM supplier. By Q3 2007, Vizio was the largest TV seller in the US by sales volume. The rationalization phase of 2007-2008 led big players such as Syntax-Brillian to file for bankruptcy, but Amtran through its strategy of making investments and alliances, entered the Japanese market by investing as a 33% stakeholder in Byd: Sign Corp., entered the Korean market through a joint venture with LG Display to build LCD panels in China.

2. What is your assessment of Amtran’s position in this network innovation model? Sony’s?

The change of the network from vertical integration towards vertical specialists pertaining to the TV industry depicts the shift of manufacturers like Sony, towards a more modular industry structure populated by specialists who worked on smaller slices of supply chain. According to exhibit 9 of the case study (AmTrans Model), AmTran has mirrored the shift in the industry with respect to its business structure, but the medium of its growth is interesting because it has efficiently invested in businesses like LG and Vizio to improve the WE ideology. However, one key aspect of concern is the dependency on Vizio of AmTrans revenue growth, or for that matter all investments concerned. As for Sony, the network innovation model is much more independent, though not cost efficient or vertically specialized, yet its business strategy of not relying on technology from other manufacturer as in the case of Chromatron from RCA. In this scenario, Sony was available to patent its technology and reap adequate rewards for nearly two decades and then as the patents expired, Sony created Trinitron FD and Sony Wega.