Matching Dell
The history of personal computer is discussed in the paper. analyze the industrys competitive environment we use Porters five forces model. According to Porter the competitive environment includes rivalry among current competitors, threat of new entrants, threat of substitutes, power of suppliers, and power of customers.
Of the various components of the competitive environment, rivalry among competitors is the strongest one. Rival sellers are prone to employ whatever weapons they have in their business arsenal to improve their market position, strengthen their position with buyers and good profits.
Competitors like IBM used tactics like “discounts” that encourage large firms to centralize PC purchases through MIS department.
IBM launched its first PC in 1981 and as demand for IBMs PCs exploded, other firms began to offer “IBM clones”
Rivalry is usually stronger in slow-growing markets and weaker in fast-growing markets.
The threat of new competitors lowers the profitability f the market
Company Value chain
Every companys business consists of a collection of activities undertaken in the course of designing, producing, and marketing, delivering, and supporting its product or service. All of the various activities that a company performs internally combine to form a value chain—so-called because the underlying intent of a companys activities is to do things that ultimately create value for buyers. A companys value chain also includes an allowance for profit because it is customarily part of the price (or total cost) borne by buyers.
A companys value chain consists of two broad categories of activities: the primary activity that are foremost in creating value for customers