In the 1990s, Intel invested heavily in new microprocessor designs fostering the rapid growth of the computer industry. During this period Intel became the dominant supplier of microprocessors for PCs, and was known for aggressive and sometimes illegal tactics in defense of its market position, particularly against Advanced Micro Devices (AMD), as well as a struggle with Microsoft for control over the direction of the PC industry. 1…
With all the companies that were listed, it is easy to see how competition has helped tremendously in keeping prices down. The first computer I bought cost me $2500. It was a Pionex, 512 mb of RAM, Pentium processor, 120GB Hard Drive and a 15inch monitor than could be used for a boat anchor. The computer I have now cost me 1/3 the price. It has an Intel Core I5 processor, 1TB hard Drive, 6 GB of RAM, DVD RW drive, and a 24 inch monitor that weighs about 5 pounds. Now that we have seen that computers are made bigger, better, and cheaper, let’s discuss how they have changed the way some companies do business.…
In order to cut costs, they arc already streamlining their operations through the usc of information technology nnd looking at new products and new markets to maintain revenue growth and boost profitability.! AtekPC Founded in 1984, AtekPC had grown to become a mid-sized U.S. PC maker with 2006 sales of $1.9 billion. AtekPC employed 2, I00 full-time workers and an additional 200 part-time workers. In spite of rapid growth in the 1990s, AtekPC found itself struggling alongside the world's other PC makers 1 David Smith, "PC Makers Face Increased Price Competition and Industry Consolidation," Metropolitan News Journal, February 17, 2007, p. 87. 2…
As the PC industry in most nations is close to the maturity stage, the number of entrants has slowed down and industry concentration increased. Hence the threat from new entrants to the PC industry is weak to moderate.…
* PC owners identified price and practicality as some of the most important reasons that they chose a PC. We suggest that PC companies leverage this finding to better communicate to prospect PC users…
arly in 1984, the Houston-based COMPAQ Computer Corporation, manufacturer of IBMcompatible microcomputers, faced a decision that would profoundly affect its future. Recognizing that IBM would soon introduce its version of the portable computer and threaten COMPAQ’s dominance in this profitable market, the company had two options. It could elect to specialize in this product line and continue to market its highly regarded portables aggressively, or it could expand market offerings to include desktop microcomputers. The latter move would force the year-old company to confront IBM on its home ground. Moreover, COMPAQ would have to make a substantial investment in product development and working capital and expand its organization and manufacturing capacity. COMPAQ’s management faced several important unknowns, including the potential market’s size, structure, and competitive intensity. Management recognized that the company’s vitality might seriously erode if it did not expand its product line. If the expansion were successful, COMPAQ might enjoy economies of scale that could help ensure its survival in a dynamic and very competitive industry. If COMPAQ’s market assumptions were incorrect, however, its future might be bleak. Many of today’s managers face similar new market realities and uncertainties. Continually confronted with issues critical to their companies’ competitive future, they must deal with novel and rapidly changing environments. In short, they must judge a broad range of dissimilar influences.…
One of the main barriers to entry is the scale economy. The industry requires PC companies to invest extremely large capitals in all aspects to gain the scale economies, including tech economy, managerial economy, financial economy, marketing economy and R&D economy. PC industry also involves lots of patents and rights, protecting innovations and setting up another barrier to entry for the new entrants. Technologies as well as innovation are advancing every year even every month, making the competition in PC industry fiercer. The top five PC vendors control large shares of the global personal computer market. It is really difficult for new competitors to enter the market.…
The electronic & computers industry consists of hardware, software, service and an endless array of products, our team chose to narrow the research to PC’s. Including as well computers and computer storage devices such as: DVD drives, and computer peripheral equipment, such as printers and scanners; communications equipment (wireless telephones and telephone switching equipment) and some others.…
The industry environment is the set of factors that directly influences a firm and its competitive actions and competitive responses: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competitors (Hit, Ireland, and Hoskisson, p.40). In this case, Apple is just one of the many competitors in a saturated markets offering both hardware and software for personal computer systems. Intense players such as, HP/Compaq, Dell, Gateway, and Microsoft all take substantial market share in the industries Apple is competing with. Today in the computer hardware industry there is intense competition and the only way to gain market share is to take customers away from the competition; Dell, Gateway, and HP/ Compaq. Dell runs a direct-to-customer business which offers consumers lower prices, increased customization, and outstanding customer support. Gateway offers a service similar to Dell, but complements it with brick and mortar locations where customers can interact with sales representatives. HP/Compaq plans to focus on innovation in order to keep the large customer base they have already attained.…
To focus on the global memory chip industry, the primary threat facing the firm contained suppliers and price-conscious buyer. Based on the Porter’s Five Forces Model, the powerful suppliers can squeeze the focal firm, the powerful buyers can lower profit the focal firm by demanding lower price and higher levels of quality and service. From the case, with different semiconductor equipment, the technology become more complex and the number of suppliers became more intensive. Suppliers of raw materials would give discount of up to 5% for high-volume buyers. OEMs were the largest buyers. In the global PC market in 2005, because rivalry between PC producers was intense, there was no one controlling more than 20%. Also the memory industry had high entry barriers. Companies needed large amounts of capital investment and technology support. At the beginning of Korea’s semiconductor industry in 1974, without strong financing and proprietary technology, the start-up ran into financial difficulties.…
Understanding the external environment is key to successfully competing in the computer hardware industry. Porter’s Five Forces of Competition provide a framework for Dell to outline the bargaining power of suppliers and customers, the threat of new entrants, the threat of substitutes and the intensity of competition. In this industry, the bargaining power of suppliers is high due to the limited number of suppliers for key components. For instance, Intel sells 90%of the microprocessors used in PCs…
“The PC industry was changing, and AtekPC was engaged in dealing with dramatic pressure from larger competitors such as HP, Dell, and Lenovo. To compete in a changing industry in which consolidation was occurring, AtekPC had implemented a corporate Planning Office. Recognizing the…
In short, at the time of the Matching Dell case study the PC industry was essentially in a boom, and particularly in the United States. Steady growth and expansion continued from the first waves created in the mid-1970s by firms like Apple, and exploded in the 1980s with IBM’s first PC offering. Companies likely envisioned a huge potential for growth due to the fact that PC had become attainable as a household commodity, and was almost certainly on the path to become a household necessity in relatively short order. In the early to mid 1980’s, I would argue that the industry was at its attractiveness peak to new start-ups and existing firms that already had a foothold. By the time 1998 rolled around, more than 45% of households owned a PC, and with rapidly improving technology and decreasing prices, projections were pegged for this trend to grow. Notwithstanding this trend, as well as the fact that barriers to entry are low, the severe price-competiveness and typically low margins are risks that small businesses and start-ups that do not have an existing customer base or significant capital would need to consider.…
Lenovo, the largest PC business in China faced the intensified competition of its own market by global level companies such as HP and Dell. In attempt to expand the market internationally, Lenovo made the acquisition of IBM’s PC division. Since two organizational cultures were different, the synergy of the merged Lenovo-IBM was required. Lenovo entitled to IBM landmark and “Think” products to move to international market and enabled to increase the market power by over night after the acquisition. Together with IBM sales forces and distribution expertise, Lenovo employed it cost-efficiency and technology expertise in respond to the global demand. During the financial crisis, even though, global PC market faced the cost-cutting and decline in profit margin, the capability and integration of assets and competencies of both companies lead Lenovo remaining in the top 5 of global PC market.…
From the late 80s until the late 90s Intel had a 10-year period of unprecedented growth as the primary supplier to the PC industry, supplying microprocessor to IBM. Intel’s product line of Pentium processors had become a household name. Today at least 80% of Intel’s processors are used in PCs globally. Their product line consists of: chipsets, motherboards, flash memory used in wireless communications, networking devices, laser printers, industrial machinery, and cellular phone base stations. Throughout the 1980s, Intel continued to release one chip after another, each one more efficient and effective than the preceding. During the early 1990’s Intel had an established reputation as a company that was consistently at the forefront of innovation. In the integrated circuit industry, a company’s innovation is fundamental to its success. “Moore’s Law”—the industry-wide benchmark for innovation—was created by Intel cofounder Gordon Moore. The law claims that the number of components on a chip doubles every two years. Intel’s adherence to Moore’s law is costly.…