Porters 5 Forces
EXHIBIT 1
Porter’s 5 Forces: Computer Industry
Threat of New Entrants: Medium
With the standardization of most of the computer components, it becomes easy for customers to change their laptops. This leads to a moderate customer switching cost.
The availability of direct-to-customer service and retailers, it becomes easy for customers to find their desired product as well as for companies to provide their products in less time and with reduced cost.
If any new player wants to enter into the market, there is a need for high capital.
Power of Suppliers: High
There is a competitive advantage of suppliers due to a difficulty in producing specialized technology.
Due to a high number of customers that are disjointed, it's difficult for suppliers to bargain.
There are only a few suppliers that are recognized and trusted that can provide quality parts.
Power of Buyers: Medium
Due to the standardization of most of the computer components, it becomes easy for customers to change their PCs leading to moderate customer switching costs.
Suppliers are operating at high fixed costs.
A low number of suppliers who provide these products to customers.
Threat of Substitutes: Medium
Moderate threat can be linked to frequent product introductions and continuous improvements in price.
Medium switching costs for consumers due to the lower price of HP/Compaq PCs with a target audience of middle class buyers who find it more difficult to switch products.
Degree of Rivalry: High
The constant changes in products and price makes inter-category competition tenser.
Existing players find it difficult to exit due to the high fixed costs for setup and manufacturing the units.
Porter’s 5 Forces: Computer Industry
Threat of New Entrants: Medium
With the standardization of most of the computer components, it becomes easy for customers to change their laptops. This leads to a moderate customer switching cost.
The availability of direct-to-customer service and retailers, it becomes easy for customers to find their desired product as well as for companies to provide their products in less time and with reduced cost.
If any new player wants to enter into the market, there is a need for high capital.
Power of Suppliers: High
There is a competitive advantage of suppliers due to a difficulty in producing specialized technology.
Due to a high number of customers that are disjointed, it's difficult for suppliers to bargain.
There are only a few suppliers that are recognized and trusted that can provide quality parts.
Power of Buyers: Medium
Due to the standardization of most of the computer components, it becomes easy for customers to change their PCs leading to moderate customer switching costs.
Suppliers are operating at high fixed costs.
A low number of suppliers who provide these products to customers.
Threat of Substitutes: Medium
Moderate threat can be linked to frequent product introductions and continuous improvements in price.
Medium switching costs for consumers due to the lower price of HP/Compaq PCs with a target audience of middle class buyers who find it more difficult to switch products.
Degree of Rivalry: High
The constant changes in products and price makes inter-category competition tenser.
Existing players find it difficult to exit due to the high fixed costs for setup and manufacturing the units.