Porter's Five Forces Analysis Paper

955 Words 4 Pages
I am going to begin the five forces analysis with buyer power. Buyer power for a desktop computer is high because consumers can choose from many different manufacturers of desktop computers available in today’s market. For example, the brands of desktop computers we currently use at work are Dell, Hewlett-Packard, Lenovo, Sony, and Apple. Several years ago, our IT department began updating the computers in the offices and on the manufacturing floor. We currently have the most Hewlett-Packard computers because they offered the largest discount for our purchase. However, before the Hewlett-Packard computers, most of the desktop computers in our company were manufactured by Dell. Hewlett-Packard offered the company a larger discount for computers …show more content…
The threat of new entrants is low with desktop computers. Top manufacturers of desktop computers, such as Dell, Hewlett-Packard, and Apple, have created entry barriers for new companies entering the market. These companies have long established relationships with customers and gear their products and services to customer demands. They offer customer incentives to entice them to repeatedly buy their products. Established desktop computer companies have created financial barriers for new companies. New companies seeking to enter the desktop computer market would have to make substantial financial investments for research and development. For example, in 2013, Dell spent $1.1 billion for R&D, lagging behind most competitors (Aggarwal). The market share the current well-established companies possess and the financial investment needed to start a new desktop computer company lowers the threat of new companies entering …show more content…
The rivalry among companies manufacturing desktop computers is very high. Companies are currently spending billions of dollars a year just on research and development. Companies are constantly researching and developing the newest and innovative ideas for desktop computers. Apple’s desktop computers are more expensive than competitors. But, despite that fact, Apple has maintained a large share of the computer market. “In September of 2009, according to market researcher NPD Group, Macs accounted for 18.9% of all laptops and desktops sold in U.S. retail outlets. For computers priced above $1,000, Apple 's share was an astonishing 89% (Wildstrom).” Hewlett-Packard and Dell have adopted some of Apple’s computer styling to attract Apple’s high-end customers in addition maintaining lower cost alternatives. Since Apple offers a unique product, the greater rivalry is among Windows based desktop computer companies. Customer service is another rivalry among desktop computer companies. Customer service is key to customer retention. According to consumer reports, Apple ranked highest in tech support in 2012 (Keizer). Other top-ranked companies were Lenovo, Asus, Dell, Toshiba, Hewlett-Packard, and Acer

Related Documents