Bargaining Power of Buyers
The buyers of PCs in 2010 were individual’s/home, government, education, corporations, and small- and medium-sized companies (Yoffie 4). The criteria that will be used to evaluate these group of buyers are whether: they buy a large portion of the selling firm’s total output, the selling firm is dependent on the buyers for a significant portion of its sales revenue, they can switch to another seller’s product with few switching costs, the selling industry’s products are undifferentiated or similar to a commodity, or they present a credible threat to integrate backward into the seller 's’ industry.
Individuals and Home
Individuals and home held the largest segment because they accounted for more than half of the PC …show more content…
Furthermore, government buyers bought a large portion of the selling firm’s total output. According to Foresman, “Sales to government organizations were up a whopping 200 percent, 16 times the overall market growth of 12 percent.” This contribution that government buyers had in the PC industry made selling firms dependent on them for a significant portion of their sales revenue. If necessary, buyers of the government could switch to another seller’s product with few switching costs. The ease of switching is made possible by the undifferentiated products in the industry. Lastly, they did not present a credible threat to integrate backward into the seller’s …show more content…
These buyers bought a moderate portion of PCs because of they often held on to their systems for longer periods of time. The switch is made only when there was an upgrade with the system that they use, and even then, the switch was not made immediately. Microsoft reported at their 2010 Worldwide Developer Conference that “that the average age of today 's PC is 4.4 years old ― close to what many experts consider to be a 5-year maximum life for computers .” Corporations had a lot to do with this high average. Consequently, the selling firm was not dependent on the buyers for a significant portion of its sales revenue. If corporations felt the need to, they could switch to another seller’s product with few switching costs. The selling industry’s products were undifferentiated or similar to a commodity. Corporations did not present a credible threat to integrate backward into the seller 's’
The buyers of PCs in 2010 were individual’s/home, government, education, corporations, and small- and medium-sized companies (Yoffie 4). The criteria that will be used to evaluate these group of buyers are whether: they buy a large portion of the selling firm’s total output, the selling firm is dependent on the buyers for a significant portion of its sales revenue, they can switch to another seller’s product with few switching costs, the selling industry’s products are undifferentiated or similar to a commodity, or they present a credible threat to integrate backward into the seller 's’ industry.
Individuals and Home
Individuals and home held the largest segment because they accounted for more than half of the PC …show more content…
Furthermore, government buyers bought a large portion of the selling firm’s total output. According to Foresman, “Sales to government organizations were up a whopping 200 percent, 16 times the overall market growth of 12 percent.” This contribution that government buyers had in the PC industry made selling firms dependent on them for a significant portion of their sales revenue. If necessary, buyers of the government could switch to another seller’s product with few switching costs. The ease of switching is made possible by the undifferentiated products in the industry. Lastly, they did not present a credible threat to integrate backward into the seller’s …show more content…
These buyers bought a moderate portion of PCs because of they often held on to their systems for longer periods of time. The switch is made only when there was an upgrade with the system that they use, and even then, the switch was not made immediately. Microsoft reported at their 2010 Worldwide Developer Conference that “that the average age of today 's PC is 4.4 years old ― close to what many experts consider to be a 5-year maximum life for computers .” Corporations had a lot to do with this high average. Consequently, the selling firm was not dependent on the buyers for a significant portion of its sales revenue. If corporations felt the need to, they could switch to another seller’s product with few switching costs. The selling industry’s products were undifferentiated or similar to a commodity. Corporations did not present a credible threat to integrate backward into the seller 's’