Abstract

For any given industry, the overall industry environment will vary depending on the stage that has been reached in the industry's lifecycle, and the companies operating in that industry will need to adjust their core competencies in line with these changes. The biggest challenge for a manufacturer is not so much formulating business strategy as judging correctly what stage the industry to which that company belongs has reached in its development.

By drawing up a strategy map for the LCD panel industry, it has been possible to chart the course taken by the evolution of the panel industry and to determine the significance of the changes that have taken place. These changes involve strategic nodes, the strategy roadmaps of individual manufacturers, and the outlook for the future development of the panel industry as a whole.

It can be seen both from the strategies that panel makers have been adopting and from the transformation of the panel industry value chain that LCD panel manufacturing is already a mature industry. Unless some major new killer application appears on the scene, the industry will soon commence its decline. In a mature industry, companies need to focus not only on achieving growth but also on the state of supply and demand; they need to maintain their customer base, so as to minimize the risk of being forced out of the market. The strategies open to manufacturers in a mature industry include a steady, step-by-step expansion of production capacity, enhancing the flexibility of production line operation (including alteration of product design and product line diversification), and customer bundling (by integrating product design, manufacturing, and logistics to reduce transaction costs). Makers can also establish joint-venture production facilities or form strategic alliances (including collaboration on materials purchasing, R&D alliances, and agreements to purchase materials from one another). Second-tier manufacturers need to consider whether they should take advantage of the current, relatively healthy state of the panel market to either withdraw from the market, or reposition themselves to focus on niche markets or become suppliers to a leading panel maker or turnkey supplier.

Whatever stage in its lifecycle an industry may have reached, the tendency for large manufacturers to grow steadily larger will remain unchanged. However, "large" need not necessarily refer to the in-house production capacity, scale of operations, or customer portfolio of the individual manufacturer itself. Rather, it implies an emphasis on strengthening operational flexibility, earning ability, and the customer base.

Appendix

Research Scope

This report examines the development and current state of the LCD panel industry in the four leading East Asian producer nations: Japan, Korea, Taiwan, and China.

List of Companies