3. Competitive Position of Major
Competitors
Net
Income
Apple
Market Capital
4 B
3 B
2 B
1 B
Dell
Acer
Hewlett-Packard
25 B 50 B
75 B 100 B
Sony
4. Scope of Competitive
Rivalry
The competition within the PC industry is
extraordinarily cutthroat. The top companies
consist of Dell, HP, Apple, Acer and Sony.
A few factors of competitive edge:
• New technology
• Custom built PCs
• Reliability
• Customer Service
5. Capital Requirements
The capital required to enter and actually compete with the
big names in the computer industry are ridiculous.
Taking into account that HP spent 3.9 billion on research
and development last year alone makes a person think
twice about embarking in the industry. New components
and ideas are always being developed by the large
companies, which few can compete. Furthermore, the
brand name products distributed by Apple, Dell and HP
are household names.
However, if a person is technologically savvy and creates
new language or some sort of new innovation they could
sell the idea to the large companies. This would be the
most probable situation when attempting to create a
profit within the PC business.
6. Big 5 Forces
Suppliers
Buyers
Rivalry among Existing Firms
Threat of New Entrants
Substitute Products
7. Suppliers / Buyers
Intel and Microsoft are the two most dominate suppliers in the PC
industry.
Suppliers: Intel’s microprocessor chips are used in approximately
80% of personal computers.
Microsoft operating systems are used in 90% of computers,
giving it substantial bargaining power.
Given that Microsoft and Intel control the majority of the PC
supplier market of major component parts, the business world
has named the two “Wintel.”
Buyers: The strength of the PC buyer has basically evolved from
the personal computer becoming a commodity-like item.
Backward integration is also a factor in the strengthening of the
PC buyers bargaining Power because more and more people
are building their own computer systems
8. Threat of New
Entrants/Stakeholders
TNE: The chances of a new PC vendor entering into the
market and gaining significant market share is pretty
slim, entry barriers are higher now than they every have
been. Two of those entry barriers that are making entry
into the PC market so tough are cost and distribution.
Concentrated: it is estimated by analysts that in the near
future the top 5 vendors may control 70% of the global
personal computer market.
Stakeholders: Environmentalists and E-waste are the major
stakeholders for the PC industry; the dumping of high-tech
trash like computers in landfills.
Hewlett-Packard, IBM and Dell have recently started up
a computer recycle program, recycling in all computer
brands for a small fee.
9. Rivalry Among Existing
Firms
The competition the personal computer industry is
also an industry that resembles ‘follow the leader.’
Follow the leader occurs when industry leaders are
imitated by competitors; and those competitors that
do not follow will fall off by the wayside.
Price Wars: Ex. In 1999 the average PC cost $ 1,699.
Now the average price of a PC is under a two
hundred dollars.
10. Substitute Product
Functionality PC/Notebook Cell Phone Handheld devices
PowerPoint X X
Camera X X
Mp3 player X X X
Spreadsheets X X
Word processor X X
GPS navigation X X
Email X X X
11. Competitors Details
Dell Inc.
Dell Inc. :
Founded in 1984
Mission Statement: “To be the most successful computer company
in the world at delivering the best customer experience in markets
we serve.”
Next day delivery
No middlemen or intermediate retailers
Current Situation:
Revenue over $56 billion
Net income of $3.4 billion
12. Hewlett-Packard
Hewlett-Packard:
Founded in 1939
HP’s mission: “To invent technologies and services
that drive business value, create social benefit and
improve the lives of customers—with a focus on
affecting the greatest number of people possible.”
First product was an audio oscillator
Current Situation:
$86 billion in revenue
net income of almost $2.4 billion
13. Apple Computer
Apple:
Founded in 1976
Mission statement of Apple is as follows:
“Apple will be a leader in providing simple,
powerful, high-quality information products and
services for people who learn, communicate, and
create.”
Stylish product innovation
Entrepreneurial
Current Situation:
$14 billion in revenue
Net income of almost $1.3 billion
14. Acer(Gateway)
Acer:
Founded in 1985
Mission statement of Gateway Inc. is, “To invest in our
communities and future by providing state-of-the-art
technology and technical support.”
3rd largest personal computer company in the United
States
Ranked in the top ten worldwide
Profit pyramid model
Current Situation:
$4 billion in revenue
Net income of almost $6 million
15. Sony Group Inc.
Sony Group Inc.:
Founded in 1999
The mission statement of sony is, “To capitalize
on sony market position as a leading distributor
of computer and networking products by
increasing penetration of existing markets
through acquisitions and expanding into new
markets.”
Computer peripheral devices
Current Situation:
$38 million in revenue
Net income of almost $540 thousand
16. PC Industry Trends
Mass Customization
Outsourcing
Electronic Commerce
Market and Distribution Trends
New Product and Technology Directions
New Business Strategies
17. Key Success Factors
PC Industry Services
Technology Services
Consulting and Integration
Managed Services
18. Conclusion
Dell Leads
Global Market
Diversify the Workforce
New Innovations
PC Improves Society
THANK YOU
