The Industry Structure & The Behavior of Firms in the PC Industry

In this paper I leave al integrity discuss the manufacturing organize and the behavior of firms in the Personal calculator Industry. The personal calculator industry has basketball team attractors Compaq calculating machine Corporation (ccc), dingle Computer Corporation, International Business Machines (IBM), Hewlett-Packard, and Gateway, (Industry Survey, Apr. 2000). The PC industry, as discussed in the paper, is comprised only of bag/ crease utilisation machines, not mainframes, databases, or any kind of servers or super- electronic figurers. The PC industry is a fast-growing, consumer-based oligopoly.I result prove the latter th rocky the use of industry characteristics and firm behaviors by big an oerview of each leading firm and their behaviors, then by combining them into an industry analysis. The companies will be addressed from top leader to tush. Compaq Computer Corporation,(CCC) is the current industry leader. CCC boasts a 1999 marketplace sh ar of 12. 8%. H owever, this figure has declined slightly from its 1998 sh are of 13. 4%. The dip is due to dell Computer Corp. s heavy presence in the excellent PC market, (Industry Survey, Apr. 2000).Compaq has a vast range of PC products from undersizer, less exp residualiturey machines to more costly, high-tech systems. CCC has been close to successful with their smaller machines, targeted to the home/family segment, because they are subject to sell large quantities. However, Compaq has been frustrated in retaining customers because most of them were pleased with their smaller machines and did not upgrade to CCCs more expensive, high-tech systems,(Hamblen 1-2). Customer ready reckoner memory has been a chore for the forty billion-dollar gild, (Hamblen 1-2).It is my estimation that Compaq does quiet remain the leader because their products are rattling easy to buy for the unenlightened consumer. You may simply walk into the aesthesis or BEST BUY and there are five or so Compaq machines all competitively priced with a advanced range of attri only ifes, usually not the outdo that a veteran user would require. For antecedent CCCs parvenuest product, the iPac, is a very simple-to-use, inexpensive machine. It is supposed to satisfy clientele workers needs for a useful computer at d witnesshearted cost,(Wildstrom 1-2).Another problem in CCCs not-to-distant in store(predicate) is their dispersal costs. With the use of the Internet, competitors have been able to reduce and even eliminate distribution costs. To follow suit Compaq plans to increase count on sales in the future, according to Micheal Capellas, chief executive officer (Hamblen 4). The future for CCC is quite hazy. in spite of the sales numbers and the heavy bottom line, CCCs stock price has sat down in the low $30&8243s,(Hamblen 1). Competition is increasing day-by-day and Compaq needs to distinguish itself in the marketplace.Theyve already experienced a decline in markets share, only the y can change their fate. dingle Computer Corporation, the second leading computer manufacturer, began by selling PCs directly to consumers. Their first customers ordered over the phone and Wold Wide Web. To this day dell still has no brick and mortar retailers and does not distribute its product to resellers. In the business to business market dingle has excelled, but until recently, the net profitable company was not so profitable in the home-user segment,(Industry Survey, Apr. 2000).The companys youthful strategy, to gain market share, has proven very effective. dell now posts a 62% gain in globe wide PC shipments and a 2. 6 share-point gain from 8. 2% in 98 to 10. 8% in 99,(Industry Survey, Apr. 2000). latterly Dells presence has been felt in the growing PC market. This has forced competitors to be very careful about set in this highly elastic industry. Dells profitability is also notable, since it has minimum distribution costs and does very little advertising Dell is ex tremely profitable. However, rough times may be on the horizon for Dell.Analysts are worried because profit proceeds projections were cut at to the lowest degree 10% by CFO doubting Thomas Meredith, who declared he is only trying to set more realistic goals and that the company will still post gain, (Burrows 1-2). Recently Dell has made some advert moves that should boost revenues including beefing-up its web site and a joint venture with Internet monster AOL, (Money 1-2). Dell Computer Corporation is still a major player in the PC industry and will last out to be in the future. Unlike Dell and Compaq, IBM has not had extreme success in the PC market.It is known that leaders at IBM never believed that the PC would be an important device and that only a small portion of the population would ever own a PC. Obviously, they were very wrong. IBM has not make a bad job contagious up to the pack, though it now has the number-three market share of 7. 6%, (Industry Survey, Apr. 2000 ). IBM plans some new strategies after its low ranking in the PC market. This new strategy is to end all retail selling and go completely direct, IBM plans to sell its Aptiva system exclusively over the Internet in the secure future, (Industry Survey, Apr. 000).This will lower costs and by chance increase the bottom line for the computer giant. Like IBM, Hewlett-Packard made one stray and cost itself billions of dollars in revenues. HP is a large electronics conglomerate. HP manufactures everything from calculators to top-secret regime appliances. For HP the PC market is one of many. Originally Hewlett-Packard was the standard in computer electronics however, this is not reality today. HPs reputation declined through the 80s and early 90s because of piteous quality management.To regain the respect they had bemused the marketing and engineering departments at HP worked their fingers to the bone to create a new image for the company. This was very effective today HP owns a mod est 6. 2% of the PC market and a very healthy reputation for quality PCs and peripherals, (Industry Survey, Apr. 2000). HP has had some festering in the past few historic period but has failed to match the industry growth rates. The companys years of unworthy quality put a ample hurt on their future growth while HP was busy alter in the hole it dug for itself, industry leaders like Compaq and Dell were basking in their success.