Acer 6

Assignment 3

Five Force Analysis

Acer
Overall attractiveness: Medium - High
RIVALRY AMONG INCUMBENTS: HIGH |
Competition | High competition because there are a lot of company in the market. |
Industry growth | About 20% in 2009-2010 because the notebook market is one of the fastest growing segments of computer industry. Also this trend is being driven by global integration and advances in communication technology. |
Fixed costs | High fixed cost in Patent cross license agreement, high investment in plant, equipments and R&D costs. |
Product differences / Brand identity | Low product differentiation, to differentiate in notebook could not be done easy because most companies have almost equal knowledge and technology but company can differentiate in material and design. |
Concentration and Balance | Fragment, because there is not the only one company gain main revenue in the market, each player in the market has slightly different revenue in market share. |
Exit barriers | High exit barriers due to high initial investments in long term assets. |
BARGAINING POWER OF BUYERS: HIGH |
Buyer vs. firm concentration | High bargaining power of buyers due to high notebook company |
Switching costs | No switching cost |
Propensity to substitute. | Lack of substitute product, net book can be substituted but at the low level. |
BARGAINING POWER OF SUPPLIERS : MEDIUM |
Supplier vs. firm concentration | Suppliers have medium bargaining power. The main components of notebook are Hard disk (35%), Monitor (27%), Processor (18%) and Mother Board (8%). For Hard Disk Company they have medium bargaining power due to the limited main supplier (Samsung, Western Digital, and Seagate). For Monitor Company they have low bargaining power according to a lot of supplier (Samsung, LG, Acer, SVOA, DELL, BENQ, etc). For Processor Company, they have high bargaining power because in this industry, they are 2 companies that produce processor which are INTEL and... [continues]

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