COMPUTER INDUSTRY

Abstract

If there was a single machine that made accessibility to computing a reality, it would have been the International Business Machines Personal Computer (lBM PC). ln many ways, the PC is regarded as more than just a mere product in the modern era context. With rapid advancements in computing capabilities, the PC has definitely created a profound impact on human life with the endless possibilities it delivers. More critically, it will serve as the basic tool that creates a digital technology-filled environment accompanied by new rules, new opportunities and, probably new pitfalls. In the light of the PC's tremendous influence on high technology advancements, the PC industry may have become big business on the whole, but yet an increasingly demanding competitive landscape is currently emerging as a formidable challenge for PC makers. Despite its benefits of creating greater widespread use for PCs, the computer technology boom has subsequently also set new and different standards of competition. These standards have made survival more difficult than ever. Indeed many PC makers, including the more established ones, are facing tumultuous times as endless price wars are reducing the PC into a low margin commodity. Worse still, numerous PC makers face imminent market exit as they rapidly lose their competitiveness. In a bloodthirsty business, software and component suppliers, such as Microsoft and Intel, are instead the ones reaping the huge profits. Moreover, the influx of new computing and informational devices are compounding greater difficulties for PC manufacturers. To adapt, PC makers must continuously strategize and improvise on fresh ideas in order to stay ahead of their rivals. This thesis main interest is to provide an in-depth and concrete industrial analysis of the PC industry from the perspective of PC makers. The crux towards understanding the dynamics and various complex issues regarding the industry lie in the study of competition and strategy. As such, besides economics, the theme also extends partially into the fields of business, marketing, organizational behaviour, and other applied management fields which are intimately linked with competitive strategy. Competitive strategy is developed in an environment where interactive forces outside and inside the market affect the strategic choices available to organizations and the outcomes that affect them. Hence, while traditional economics provide the fundamental foundations of competitive analysis, it is imperative to move beyond this narrow scope whereby we uncover the industry from several diverse but related angles and disciplines as well. Hence, in this exercise, the framework used, simultaneously combines both economic and business approaches and orientations. This will be essential for a more well-rounded insight of the PC industry. In order to facilitate easier comprehension of the workings in the industry, the research method basically separates analysis into two large components: exterior and interior analyses. Prior to this though, certain elemental characteristics, features and origins regarding the industry and product must be taken into consideration since they exert a substantial influence on the final evaluation. Furthermore, we also investigate the actions of other agents who bear an immense influence on the strategic situation. In the course of evaluation, the behavior, actions and tactics of PC firms which are most fundamental to industry performance, given they have the largest direct stake, will however, take centre stage. Subsequently, the underlying principles and reasons for the volatile competitive nature of the PC industry can be determined from combining the results of these individual findings.