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

In this paper I result discuss the diligence structure and the behavior of firms in the Personal computing device Industry. The personal computer application has five leadershiphip Compaq electronic computer batch ( 300), dell Computer Corporation, international Business Machines (IBM), Hewlett-Packard, and Gateway, (Industry Survey, Apr. 2000). The PC constancy, as discussed in the paper, is comprised only(prenominal) of home/business use machines, non mainframes, databases, or any kind of servers or super-computers. The PC industry is a fast-growing, consumer-based oligopoly.I will prove the last menti adeptd through the use of industry characteristics and firm behaviors by giving an overview of each leading firm and their behaviors, accordingly by combining them into an industry analysis. The companies will be addressed from top leader to screw. Compaq Computer Corporation,(CCC) is the latest industry leader. CCC boasts a 1999 grocery constituent of 12. 8%. Howev er, this figure has declined slightly from its 1998 share of 13. 4%. The dip is due to dell Computer Corp. s heavy presence in the sm any PC commercialise, (Industry Survey, Apr. 2000).Compaq has a wide range of PC products from smaller, less(prenominal) expensive machines to more costly, high-tech systems. CCC has been or so successful with their smaller machines, targeted to the home/family segment, because they are suitable-bodied to sell large quantities. However, Compaq has been unsuccessful in retaining customers because more or less of them were pleased with their smaller machines and did not upgrade to CCCs more expensive, high-tech systems,(Hamblen 1-2). Customer belongings has been a problem for the forty billion-dollar company, (Hamblen 1-2).It is my assessment that Compaq does calm down remain the leader because their products are genuinely short to buy for the uneducated consumer. You may simply walk of life into the WIZ or BEST BUY and in that respect are f ive or so Compaq machines all competitively priced with a good range of attributes, normally not the best that a veteran drug user would require. For instance CCCs unsandedest product, the iPac, is a genuinely simple-to-use, inexpensive machine. It is supposed to sit downisfy business workers involve for a useful computer at small(a) cost,(Wildstrom 1-2).Another problem in CCCs not-to-distant future is their dispersal costs. With the use of the Internet, competitors have been able to reduce and even eliminate distribution costs. To take place suit Compaq plans to increase direct sales in the future, according to Micheal Capellas, CEO (Hamblen 4). The future for CCC is sort of hazy. Despite the sales numbers and the heavy female genitalia line, CCCs stock price has sat down in the low $30s,(Hamblen 1). contest is increasing daily and Compaq needs to distinguish itself in the marketplace.Theyve already experienced a decline in markets share, only they can change their fate. dingle Computer Corporation, the second leading computer manufacturer, began by exchange PCs directly to consumers. Their first customers reproducible over the phone and Wold Wide Web. To this day Dell still has no brick and mortar retailers and does not pass on its product to resellers. In the business to business market Dell has excelled, but until recently, the simoleonsable company was not so profitable in the home-user segment,(Industry Survey, Apr. 2000).The companys new strategy, to deliver the goods market share, has proven very sound. Dell now posts a 62% gain in world wide PC shipments and a 2. 6 share-point gain from 8. 2% in 98 to 10. 8% in 99,(Industry Survey, Apr. 2000). late Dells presence has been felt in the growing PC market. This has forced competitors to be very careful close pricing in this highly elastic industry. Dells profitability is also notable, since it has minimal distribution costs and does very little advertising Dell is natively profitable. However, rough times may be on the horizon for Dell.Analysts are worried because profit gain projections were cut at least 10% by CFO Thomas Meredith, who declared he is only trying to set more living goals and that the company will still post growth, (Burrows 1-2). Recently Dell has made some key moves that should pass on revenues including beefing-up its web site and a joint ship with Internet giant AOL, (Money 1-2). Dell Computer Corporation is still a major player in the PC industry and will continue 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 consequential device and that only a small package of the population would ever own a PC. Obviously, they were very wrong. IBM has not done a bad dividing line catching 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 by and by i ts low ranking in the PC market. This new strategy is to end all retail merchandising and go completely direct, IBM plans to sell its Aptiva system only if over the Internet in the near future, (Industry Survey, Apr. 000).This will lower costs and possibly increase the bottom line for the computer giant. Like IBM, Hewlett-Packard made one mistake and cost itself billions of dollars in revenues. HP is a large electronics conglomerate. HP manufactures everything from calculators to top-secret government appliances. For HP the PC market is one of many. Originally Hewlett-Packard was the criterion in computer electronics however, this is not reality today. HPs reputation declined through the 80s and early 90s because of scurvy musical note management.To regain the respect they had lost the merchandising and engineering departments at HP worked their fingers to the bone to stool a new image for the company. This was very effective today HP owns a modest 6. 2% of the PC market and a very hearty reputation for quality PCs and peripherals, (Industry Survey, Apr. 2000). HP has had some growth in the past a few(prenominal) years but has failed to match the industry growth rates. The companys years of poor quality put a considerable hurt on their future growth while HP was take filling in the hole it dug for itself, industry leaders like Compaq and Dell were basking in their success.