Driving forces in the industry
Technological change and manufacturing process innovation
In the software industry, the level of technological change is extraordinary. According to IBIS World (2010), chip manufactures for instance AMD, Nvidia, and Intel produces new computer components every six month range. The retail value of these components decreases in value rapidly due to the short cycle of the product. Because of this, the manufactures keep the inventory slim and plan for rapid inventory returns. This makes it feasible to produce better and new parts at a reduced cost. As a result of advancements and technological changes, consumers have welcomed enhancements and computers in ...view middle of the document...
The acquisition placed Acer as the second in the United States PC market. In summary, globalization and international competition in the software industry increases great computer sales as a result of the strong downward pressure on computer prices.
PC competitive landscape and industry conditions are permanently about companies competing against one another to introduce a fresh product. For instance, Hewlett-Packard’s (HP’s) use of WEbOS (an in house developed tablet computer known as the HP slate) is meant to compete with Apple’s iPad. The launch lucrative product reinforces companies for instance Apple, IBM, Hewlett-Packard and several others.
In software and PC industry, what drives product sales is distinguished marketing innovation. For instance, Apple sold more than three million units in 2010 when it was launched and it was due to an organized marketing strategy. This forced most competitors to modify their marketing strategy.
Entry or Exist of major firms
Due to globalization and falling prices, it is unattractive to manufacture computers in countries such as United States. Almost all bigger firms have their production facilities in Asia. Over the past five years, computer manufacturers have existed in large numbers in the PC industry. For instance, in 2011, the industry had a total of 412 companies with the total number of firms falling at 2.6%annual rate. In addition, in 2005 International business machines sold its PC division Lenovo in due to intense competition.
Regulatory Influences and government policy changes
In software and PC industry, firms face negligible regulatory intervention in practice. Due to this, numerous regulatory bodies have insignificant oversight industry activities. For instance, most computer manufacturing firms do not receive constant financial assistance from the government. On few occasions, they will be given support from local and state governments offering them tax enticements to relocate their production plants to their area.
In summary, the driving forces will cause the competition to be more intense and in turn positively affect future industry profitability
Strategic group map showing the market positions of IBM in your industry. Which companies do you believe are in the most attractive position on the map?
Which companies are the most weakly positioned?