Ibm Switches Strtegies part 2 Essay - 3,336 words

... perform calculations, display documents in multiple on-screen windows, and also enable users to record macros that simplify difficult operations (www.msn.encarta.com). One major manufacturer of typewriters and word processors is Brother. The Personal Computer (PC) or desktop is a machine capable of repetitively and quickly performing calculations and instructions. Its Design is to be used by a single person; a PC is smaller, less expensive and easier to use than other classes of computers, such as supercomputers, mainframe computers, or workstations. However, it usually has less computational power (www.msn.encarta.com).


PC's can most likely be found within office environments, schools, and homes. Along with typewriters and word processors, their prices are far less than laptops as well. As stated earlier, these products can be considered substitutes for laptop computers if a consumer is no longer striving for the portable qualities of laptops. The word processor, typewriter, and PC can all perform similar functions of a laptop, but for traveling, they are surely not recommended. Buyer Power The fourth force of Porter's model is bargaining power of buyers. There are many different levels of buyers. Two different levels would be the store that you sell your product to and the other level would be the ultimate consumer.


When a buyer can demand certain things from the company then that would give them power. This is a threat to the company's profits when they have achieved a great amount of power. IBM has limited the buyers' power by reducing the amount of levels of buyers. IBM sells a majority of their notebook computers off their corporate website. The buyers of notebook computers are becoming more empowered because of the use of the Internet. There have been several companies that have entered the notebook computer business by offering custom-built computers over the Internet. These companies offer that they will make a custom computer to the specifics that you need. IBM did not choose to pursue this route.


Instead of making their notebook computer custom built to the customer order IBM has chosen to just make a wide variety of computers. IBM has about 190 different notebook computers and one of them has to fit the customers' requirements. Therefore this shows that IBM does not have as much influence by the buyer as does many of its competitors. This reduces the cost for IBM because they do not need someone always figuring out the specific needs of a customer and putting a computer together at that point in time that will fit those needs. IBM only has to ship the notebook computer that the customer ordered. Nobody knows the customer better then the customer and he is the one that picks out the computer he wants.


Competitors The last of the forces in Porter's model is the intensity of competition. If the competition is low then the dominant company will be able to raise prices and earn greater profits. But when the competition is high like it is in the computer market then there is a price war where prices have to be competitive to your competitors or you will have low market share and smaller profits. (Hill & Jones 84) Computers are the world's most innovative product. Whether you're having your groceries scanned at the local supermarket, reading your e-mail messages through a portable phone, or traveling through E-Z pass toll booths, computers are an every and all day occurrence in everyone's life. From the beginning of the computer industry, IBM has led the way and set standards in the computer market today. From computer mainframes to 3lb. laptops, IBM next to Apple has maintained its supremacy. Aside from Apple, other competitors have emerged into the computer market.


Hewlett Packard and Compaq are two primary competitors in IBM's market sector dealing with laptops today. Since the dawn of the computer era IBM has held its position at the top of the computer industry. Being that IBM has maintained its credibility, it has held its position in the computer world with a lot of market power. This was the case up until about ten years ago. That was when its suppliers broadened their distribution lines and created a larger market for computers. This is a time when IBM needed to implement new computer strategies. The early 80 is when it took hold of the laptop industry. Realizing that what it's strategy needed was to be very competitive with its competitors, IBM increased its research and development strategies to achieve its superb Laptop technology. (Research Insight) This was a dawn of a new era for portable computers.


Apple computer industry was already competing in the market of computers, so along with Compaq and Hewlett-Packard these three companies posed threat and competition to IBM. After going through and analyzing the income statements between these three companies. You can notice a decline in Apple and IBM's revenues over the past ten years. For Apple computer industry it's gross profit has declined form 3.3 billion dollars in 1991 to 1.7 billion in 1999 a 34%decline in revenue for Apple and IBM went from 42 billion in 1991 to 38 billion in 1999 a 4% ...................................................................................................................................................................................................................................................................................................................................................................

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Essay Tags: computer, hewlett packard, laptop, world wide, apple

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