a. Definition of the Industry
The following study presents a brief analysis of the Computer and Electronic Manufacturing Industry in the USA (NAICS 334 – North American Industry Classification System) with special focus on the Personal Computer’s sub-sector. I made the decision to focus on just one of the sub-sectors due to the large scope of the general industry. “Industries in the Computer and Electronic Product Manufacturing subsector group establishments that manufacture computers, computer peripherals, communications equipment, and similar electronic products, and establishments that manufacture components for such products.” (Bureau of Labor Statistics) Given the previous description of the general Industry, I can now go further in the definition of the real point of study for this paper, which is the Computer Manufacturing, clustered in laptops, PC’s and servers. “This industry manufactures and/or assembles personal computers (PCs), laptops and servers. Operators typically purchase computer components (e.g. motherboards and graphics cards) from dedicated manufacturers in other industries” (IBIS World report 33441a, Semiconductor and Circuit Manufacturing). “This industry does not include tablet computers, nor does it include manufacturers of computer monitors, mice, keyboards and printers” (IBIS World report 33411b, Computer Peripheral Manufacturing). When covering the whole industry, “The US computer manufacturing industry includes about 1,200 companies with combined annual revenue of about $75 billion. Major companies include Dell, Hewlett-Packard, and IBM.” (Hoovers 2012) The computer manufacturing industry’s revenue is divided and measured according to each of the sub sectors that conform it. “Personal computers account for about 40 percent of industry revenue; mainframes and servers, 13 percent; and storage devices, about 10 percent.” (HOOVERS) While respecting to the sub-industry in which this paper is focused (PC’s, laptops and servers), and considering just the United States, it is conformed by 355 businesses generating annual revenue up to US$37 billion. Being the leading companies Hewlett-Packard, Dell and Apple. The total amount of units sold for the industry must be taken in consideration from the quantity of units shipped in the last year:
Preliminary United States PC Vendor Unit Shipment Estimates for 4Q11 (Units) Company
4Q11 Market Share (%)
4Q10 Market Share (%)
4Q11-4Q10 Growth (%)
Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablets such as the iPad. Source: Gartner (January 2012) Comparing the studied sub-industry results with previous years, profit and revenue have been constantly decreasing and the annual growth in the last 5 years have been negative for the industry in about 5.1%. Analysts from IBIS project that this will continue falling for the future 5 more years.
Nonetheless, “The industry is capital-intensive: annual revenue per employee is about $460,000” (HOOVERS), while the whole Computer Manufacturing Industry in the US counts with approximately (in thousands) 1,099.9 employees.
b. Internal and External Analysis
-There is a growing consumer demand for PCs and tablets.
-“Their rapid growth (of the market) suggests that they will become even more important to the economies of all three North American countries in the future” (Bureau of Labor Statistics 2012) -“The proliferation of cloud computing will prompt companies to increase their server investments” (IBIS 2012)
-“Industry profit will...