The PC Industry in the United States (U.S.) is made up of desktop PC’s and mobile PC’s. A desktop PC is a personal computer that and individual would use in their home and is not portable. A mobile PC is also a personal computer and they include laptops, notebooks and netbooks. While some people might think that tablets and smartphones would be part of this classification, they actually are not part of the mobile PC classification. PC’s are simply just personal computers. Within the PC industry a number of factors determine how successful a company will be. The topics covered in this report will be the key factors of demand and the power of buyers, the key input components of production and power of suppliers and the industries market structure and competitors.
Key Factors of Demand and Power of Suppliers
When one considers the factors that drive demand in this industry, one has to identify with the consumers in the industry and the needs of the consumer. When looking at the PC industry, the market is coming towards its saturation point, so consumers have a wide variety of products to choose from. Because of this, the three main factors of demand that drive this industry will be income, consumer preferences and changes in the price of competitor’s products (substitutes).
When looking at the income of a specific consumer, this is going to greatly affect what type of computer and brand they will be able to purchase. If the consumer is not rather wealthy, there is a good chance that they will not be buying an iMac anytime soon as the cheapest iMac is going to cost the consumer $1,199 (iMac). Whereas if a consumer were to log onto Hewlett-Packard’s (HP) website they would be able to find a number of computers listed under $500 (Laptops). So the consumer’s income is going to greatly affect the computer that he/she will be able to get. The good thing for the consumer is that since there are so many competitors within the market, they will be able to purchase a good computer for a reasonable price.
Consumer preferences will also play a big role in the demand for a specific computer. If a consumer is looking for a computer that is going to be able to edit videos, play games that require a lot of physical memory, watch movies is HD/3-D and have a big enough hard drive to hold thousands of songs and hundreds of videos, then there is a good chance that this consumer is going to demand a higher performance computer which will cost more money than the average computer. Whereas if the consumer is simply just looking for a computer that will allow them to browse the internet, check accounts online, view photos of their computer and perform simple tasks such as creating word documents or excel documents, then there is a good chance that this consumer will require just an average computer that will have a much lower price than the high performance computer. Once again, because there are some many competitors within the market the consumer will be able to find the specific computer that will fit the needs that he/she has. So as shown, based on the preferences that a consumer is looking for, they will demand a certain computer to fit their needs.
The price of competitor products will also play a very significant role in the demand for one PC over another. If a consumer is in the store looking at what PC they would like to purchase and the consumer is comparing specifications of one PC to another and they notice that the specifications of each product are about the same, then they compare the prices of the two PCs and one is significantly lower than the other then the consumer would most likely select the lower priced PC. Also looking outside of the PC industry, the recent boom of tablets and mobile smartphones is taking sales away from the PC market. As the technology of these products increases and the demand for these products continues to rise, this will negatively affect the demand for PCs as more consumers...