...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory Join Search Browse Saved Papers Home Page » Other Topics Porter's Five Forces of Computer Industry In: Other Topics Porter's Five Forces of Computer Industry B. Industry Analysis (Porter’s Five Forces) 1. Rivalry Among Competitors The competition in personal computer industry is very intense and fierce. The five main manufacturers namely IBM, Dell, Apple, HP and Compaq are in competition to produce the least expensive and most efficient machine. Apple focuses more on innovation while Dell focuses on distribution channel and services, which create differentiation to some extent. Price competition has become severe in the industry as PC has become a more commodity-like product. This in turn has drives the industry to embrace any cost-cutting measures in an effort to increase their decreasing profit margin. Since the quality of a personal computer is largely determined by the microprocessor and application system installed, the profitability and prosperity of the industry is dependent of the profitability and prosperity of these suppliers. 2. Potential New Entrants The threats from new entrants to the personal computer industry is weak to moderate due to the presence of dominant players deters the entry of new players to immediately enter the market and establish their own brand. In such a competitive market, these companies have invested...
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...PORTERS FIVE FORCES Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. Porter referred to these forces as the micro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Firms are able to apply their core competencies, business model or network to achieve a profit above the industry average. The five forces of porter’s five forces model are as follows: 1. The threat of the entry of new competitors 2. The threat of substitute products or services 3. The bargaining power of customers (buyers) 4. The bargaining power of suppliers 5. The intensity of competitive rivalry 1. The threat of the entry of new competitors Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. The new entrants face barriers to entry. They need to overcome them to compete successfully. Some of the barriers are capital requirement, customer loyalty, experience, etc. Specialized technology, production and distribution require high capital costs which acts as one of the barrier. The high customer’s loyalty and experience of the established firms also...
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...Porter’s Five Forces Strategy Skills Team FME www.free-management-ebooks.com ISBN 978-1-62620-999-2 Copyright Notice © www.free-management-ebooks.com 2013. All Rights Reserved ISBN 978-1-62620-999-2 The material contained within this electronic publication is protected under International and Federal Copyright Laws and treaties, and as such any unauthorized reprint or use of this material is strictly prohibited. You may not copy, forward, or transfer this publication or any part of it, whether in electronic or printed form, to another person, or entity. Reproduction or translation of any part of this work without the permission of the copyright holder is against the law. Your downloading and use of this eBook requires, and is an indication of, your complete acceptance of these ‘Terms of Use.’ You do not have any right to resell or give away part, or the whole, of this eBook. Porter’s Five Forces Table of Contents Preface 2 Visit Our Website 3 Introduction 4 Porter’s Five Forces Analysis 6 Competitive Rivalry 11 Threat of New Entrants 18 Threat of Substitutes 20 Bargaining Power of Suppliers 23 Bargaining Power of Customers 25 Summary 28 Other Free Resources 30 References 31 ISBN 978-1-62620-999-2 © www.free-management-ebooks.com 1 Porter’s Five Forces Preface This eBook describes Porter’s Five Forces Framework, a technique that provides a model for industry...
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... Dell Inc. Competitive forces The Competitive forces has five forces which are threat of new competition; threat of substitute products or services; bargaining power of customers or buyers; bargaining power of supplier; and intensity of competitive rivalry. I. Threat of new competition: In the other word, it is the threat of new entrants. For the threat of new entrants, based on the Porter's five forces, a model for industry analysis, " Barriers to entry are more than the normal equilibrium adjustments that markets typically make." (Porter's Five Forces). If a company wants to enter a new market, it should consider about the following factors in the industry which are Government policy, economies of scale, capital requirements, brand identity, absolute cost advantages and Industry profitability etc. II. Threat of substitute products or services: According to Wikipedia, " The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives. Note that this should not be confused with competitors' similar products but entirely different ones instead." (Porter five forces analysis, 2009). Many factors such as switching costs, buyer inclination to substitute, price performance, and trade- off of substitutes should be considered by a company. III. bargaining power of customers or buyers: based on Wikipedia"The bargaining power of customers is also described as the market of outputs: the ability...
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...Washington. It mainly focuses on the development, licensing, supporting and selling of the computer electronics, computer software, personal computers and the affiliate services. The corporation is mainly recognized for its software products including the operating systems, the Microsoft office suite among others. It has a high profile reputation of quality services and products that are consumed by both large-scale and small-scale consumers. The paper intends to analyze and deduce the factors of operation of the corporation. That includes the mission statement, the vision statement, culture, SWOT analysis amongst other attributes that determine the extent in which the corporation is an outstanding performer. Mission, Vision, Goals, and culture Mission At Microsoft, the central mission is to enable the people, as well as, the businesses across the international borders to realize their absolute potential. Particularly, the corporation considers it a mission to focus on the commitment to the customers. As such, the corporate attempts to articulate the full measure of the mission by striving to ensure that it creates outstanding technology. The technology is also developed in such a manner that everyone can access it regardless of the demographic characteristic such as ages and abilities. According to the contemporary company ratings, Microsoft is considered to be an industry leader in the context of technological innovation. Just like it is stipulated in the mission...
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...IBM and Porter’s Five Competitive Forces Alexis DiOrrio September 21, 2015 Wilmington University History and Financial Analysis IBM or International Business Machines is a well-known American Computer manufacturer, founded by Thomas J. Watson (Bellis, 2015). They are also known as the “Big Blue” after the color of its logo. The company has manufactured everything from mainframes to personal computers and has been extremely successful selling business computers (Bellis, 2015). What started the beginning of IBM’s history, was on June 16, 1911 when three successful companies merged together; The Tabulating Machine Company, The International Time Recording Company, and The Computing Scale Company of America. These three companies joined together and formed one company, The Computing Tabulating Recording Company. In 1924, Watson changed the company’s name to what we know today as IBM (Bellis, 2015). IBM began manufacturing calculators in the 1930s, using the technology of their own punch card processing equipment. The financed the invention of the Mark 1 Computer with Harvard University in 1944. By 1953, IBM was ready to produce their own computers, which began with the IBM 701 EDPM, which was their first commercially successful general-purpose computer (Bellis, 2015). In 1980, Bill Gates agreed to create an operating system for IBM’s computer for the home consumer. Once IBM had now stepped into the home consumer market it sparked the computer revolution. Below...
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...available to help to find competitive advantages, including Michael Porter’s five force model. Porter’s Five Forces Model analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry. Its purpose is to combat these competitive forces by identifying opportunities, competitive advantages, and competitive intelligence. If the forces are strong, they increase competition; if the forces are weak, they decrease competition. The five forces in Porter’s model are buyer power, supplier power, threat of substitute products or services, threat of new entrants, rivalry among existing competitors. • Buyer Power is the ability of buyers to affect the price they must pay for an item. • Supplier Power is the suppliers’ ability to influence the prices they charge for supplies, including materials, labor, and services they provide. • Threat of substitute products or services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose. • Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market. • Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent. Putting desktop computer business into Porter’s Five Forces Model 1 Buyer power is high because customers are having many choices...
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...that constantly readdressed its strategic vision and image. During the 1990s, Apple suffered from its multiple changes in executive management and inconsistent strategies. Under Steve Jobs’s leadership, Apple’s vision was to be a continuous pioneer in the PC industry in order to become “an enduring company where people were motivated to make great products...a company that will stand for something a generation or two from now” (Katzenbach, 2012, para. 5). Unlike previous CEOs and much of the competition, Jobs continually strived to keep Apple innovative and exert cultural influence. However, this focus on innovation has forced Apple to continually adapt and offer new products to maintain a marginal advantage in an rigorously competitive industry. The 1990s In the early 1990s, Apple Computer was well received and uniquely valued by PC consumers. This enabled Apple to offer its products at premium prices. However, senior management realized that creating products valued as unique was not enough to sustain profitability. As IBM, its major competitor, dropped prices, Apple needed to alter its business strategy by offering “products and prices designed to regain market share” (Yoffie & Slind, 2008, p. 3). Apple Computer then went through numerous changes in corporate leadership, employed strategies to sustain profits including lowering operating and manufacturing costs, alterations in software platforms, and engaged in joint venture opportunities. During this time, Apple introduced...
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...Analysis Of Porter's Generic Strategies Strategic Themes Provide product that is on-trend, differentiated, distinctive and inspired by select popular fashion trends and pop culture for all of our target customers, but with a primary focus on expressive women and expressive moms. Improve brand marketing effectiveness by implementing a “house of brands” architecture that covers all of our major customer segments and builds distinctiveness and focus in our product assortment. Provide a great shopping experience through improved customer engagement, and leveraging our real estate to support new store formats consistent with the repositioning of our brand. Maintain efficient operations by building greater speed and flexibility into the supply chain to deliver the right product to the right store at the right time in the appropriate proportions across the approximately 4,600 store network. On-Trend Targeted Product We identifies fashion trends timely and integrates these insights into on-trend product in our stores. Generic Strategy - Porter Porter’s generic strategies: low cost, differentiation, specialization. Key stakeholders & their influence. PEST model, macro environment. – Five Forces model, micro/industry environment. Porter's Five Forces Model And Three Generic Strategies Porter's Five Forces Model Porter's Five Competitive Forces model is a framework made by Michael Porter that is used by businesses when thinking about business strategy and the impact...
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...Dell Inc. is a global computer technology company that manufactures and sells PC, tablets, workstations and displays. Dell practices “Direct Business Model” that involves selling products directly to customers without intermediaries. Developed by founder and current CEO Michel Dell, this business strategy has proved to be highly effective in terms of gaining significant cost advantage in competition. Post navigation← PreviousNext → Dell Porter’s Five Forces Analysis Posted on September 1, 2015 by John Dudovskiy Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1]represents five individual forces that shape the overall extent of competition in the industry. These forces are represented below: Porter’s Five Forces Threat of new entrants to consumer electronics industry is not significant due to cost and financial, knowledge and technological barriers. However, it is important to note that new businesses may overcome these barriers if they are able to introduce new products to the market based on innovative concepts. Large players such as Dell, Apple, HP, Samsung and Acer derive extensive benefits from the economies of scale and this fact represents an additional entry barrier to the consumer electronics industry. Bargaining power of buyers is immense due to the abundancy of offer and little differentiation amongst products. Moreover, there are usually no additional costs for Dell customers to switch to the competition and the majority...
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...Porter's Five Forces: Analyzing the Competition By Katherine Arline, Business News Daily ContributorFebruary 18, 2015 08:35 am EST Credit: vichie81 | Shutterstock Whether you are starting a new business or looking for more insight into your existing company's prospects, you probably have questions about the competition. One way to answer those questions is by using Porter's Five Forces model. Originally developed by Harvard Business School's Michael E. Porter in 1979, the five forces model looks at five specific factors that help determine whether or not a business can be profitable, based on other businesses in the industry. "Understanding the competitive forces, and their underlying causes, reveals the roots of an industry's current profitability while providing a framework for anticipating and influencing competition (and profitability) over time," Porter wrote in a Harvard Business Review article. "A healthy industry structure should be as much a competitive concern to strategists as their company’s own position." According to Porter, the origin of profitability is identical regardless of industry. In that light, industry structure is what ultimately drives competition and profitability —not whether an industry produces a product or service, is emerging or mature, high-tech or low-tech, regulated or unregulated. "If the forces are intense, as they are in such industries as airlines, textiles, and hotels, almost no company earns attractive returns on investment," Porter...
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...Course Name: Strategic Management Introduction ASUS is the world's fifth-largest PC vendor by 2013 unit sales (GSWPSDPIFQ, 2014). In the ultra-competitive IT industry, ASUS’s success is noticeable. In this essay, Five Forces Model is used to analyse the reason for AUSU’s success and its opportunity and challenge in the future. It introduces some information about AUSU at first. Then it states Porter’s Five Forces Model and the application of it. Finally, some important changes taking place in the macro-environment that might have an impact on the IT industry especially on PC suppliers such as AUSU will be discussed. In this essay, it focuses on two major changes influence PC companies as AUSU. The first one is the popularity of tablet PCs as IPAD. The second one is the exploding of smart phones as millions of people upgrade from simple ‘feature phones’ to more sophisticated Smartphone like the iPhone and Android. Both of them are relevant with Threats of substitute products. Discussion Firstly, ASUS’s is introduced, this is the world's fifth-largest PC vendor by 2013 unit sales ASUS appears in Business Week’s ‘InfoTech 100’ and ‘Asia’s Top 10 IT Companies’ rankings, and it ranked first in the IT Hardware category of the 2008 Taiwan Top 10 Global Brands survey with a total brand value of $1.3 billion (Asus Reviews, Ratings, and Pricing, 2014). ASUS has a primary listing on the Taiwan Stock Exchange and a secondary listing...
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...Pick any industry you are familiar with (examples: fast food industry, automotive industry, Personal Computer industry, financial services industry, etc. other than the Casino Industry). Provide brief answers to the following about this industry. Industry: ________fast food industry__________________ 1. Industry Driving Forces/PEST Analysis: Identify four to five emerging factors in the environment that could have a significant impact on the industry in the future. Driving Force | Potential Influence on the Industry | globalization | More and more people from other countries are adopting American culture so there might be opportunities for fast food companies to open new markets. | health | They might get less consumers in the future because recently more and more people are concerned about their health. | Life style | The pace of life is increasing; people who work in large cities and do not have time to have something big may choose to consume fast food. | technology | With the development of online ordering and 24 hours home delivery, it is much easier for people to consume fast food so it provides opportunities for the industry. | | | 2. Conduct a brief analysis of the Industry Structure using Porter’s Five Forces Framework. Identify and describe each force as it applies to the industry you chose above. What is your conclusion about the industry? Which of the five forces had the most influence on the conclusion? Force | Description | Strong/weak...
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...DRIVEN mis INFORMATION IS EVERYWHERE. INFORMATION IS A STRATEGIC ASSET. WITHOUT INFORMATION, AN ORGANIZATION SIMPLY COULD NOT OPERATE. THIS CHAPTER INTRODUCES STUDENTS TO SEVERAL CORE BUSINESS STRATEGIES THAT FOCUS ON USING INFORMATION TO GAIN A COMPETITIVE ADVANTAGE, INCLUDING: • The core drivers of the information age • Data, information, business intelligence, knowledge • Systems thinking • Competitive advantages • Porter’s Five Forces model • Porter’s three generic strategies • Value chain analysis Many of these concepts and strategies will be new to your students. Be sure to explain to your students that this chapter offers an introduction to these concepts and they will gain a solid understanding of the details of these concepts as they continue reading the text. SECTION 1.1 – BUSINESS DRIVEN MIS Competing in the Information Age The Challenge: Departmental Companies The Solution: Management Information Systems SECTION 1.2 – BUSINESS STRATEGY Identifying Competitive Advantages The Five Forces Model – Evaluating Industry Attractiveness The Three Generic Strategies – Choosing a Business Focus Value Chain Analysis – Executing Business Strategies | | |SECTION 1.1 ...
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...Understanding the Five Forces Porter regarded understanding both the competitive forces and the overall industry structure as crucial for effective strategic decision-making. In Porter's model, the five forces that shape industry competition are: Competitive rivalry. This force examines how intense the competition currently is in the marketplace, which is determined by the number of existing competitors and what each is capable of doing. Rivalry competition is high when there are just a few businesses equally selling a product or service, when the industry is growing and when consumers can easily switch to a competitors offering for little cost. When rivalry competition is high, advertising and price wars can ensue, which can hurt a business's bottom line. Rivalry is quantitatively measured by the Concentration Ratio (CR), which is the percentage of market share owned by the four largest firms in an industry. Bargaining power of suppliers. This force analyzes how much power a business's supplier has and how much control it has over the potential to raise its prices, which, in turn, would lower a business's profitability. In addition, it looks at the number of suppliers available: The fewer there are, the more power they have. Businesses are in a better position when there are a multitude of suppliers. Sources of supplier power also include the switching costs of firms in the industry, the presence of available substitutes, and the supply purchase cost relative to substitutes...
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