Industrial Competitiveness: Porter's Five Forces In The Personal Computer Industry

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Analysis of industrial competitiveness: Porter’s 5 forces 1) Threat of new entrants: LOW The threat of new entrants in the personal computer industry is quite low. This is due to the market is being dominated by six major competitors (Apple, Lenovo, Asus, Acer, Sony and Dell) who have nearly the entire market share and dominating each other. Therefore, this will discourage any potential new firms from entering the market. Besides that, a huge barrier to entry was formed in the market and it requires significant investments to be made in research and development so that the new firms can continue to develop innovative products as well as large fixed start-up costs for manufacturing, employees and customer service. The threat of new entrants…show more content…
If a company is following a high quality strategy then it can be expected that their prices will generally be higher to reflect the higher prices they are paying their suppliers. In terms of service suppliers, the service offered are within personal computer industry include internet, tech support and repair services. These suppliers mainly focus on operational performance and relational performance in order to increase customer satisfaction. 3) Bargaining power of buyers: HIGH In recent years, consumers have more alternative options to the personal computer. For example, smartphones, tablets and other handheld devices have most of the same capabilities as a personal computer. Due to the availability, sleekness and trendiness of these alternatives, handheld devices have become increasingly popular and making personal computer more obsolete. In order to regain market share, personal computer must differentiate itself from these new alternative options. Large corporations, governments and schools which buy computers in large volume have the power to bargain on price, quality and service. Personal computer buyers are price-sensitive because they still see units as very similar and choose primarily on price despite companies have differentiated their…show more content…
All of them are fighting to produce a low cost, powerful machine with the most efficient operating system. Companies specialize in different areas in order to compete against their rivals with some focus on innovation and attempt to bring the technology to their consumers first while others focus on their distribution channel and services throughout their companies. However, one of the most competitive areas is the price competition throughout the industry. As the personal computer has increasingly becoming a commodity in a household, the fight to keep low cost while bringing the best product to the market has become a never ending battle. One of the major factors in determining the quality of a personal computer is the microprocessor and application systems installed. As a result, there is a direct correlation between the firm’s profitability and the profitability of the firm’s suppliers. On the other hand, globalization is another important competitive advantage. This is because many personal computers firms in the United States earned around 40% of their revenues in international markets. Even though personal computer markets in US, Europe and Japan have matured and the demand has slowed down but the demand in Asia Pacific is expected to grow. 5) Threat of substitutes:
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