The Competitive Environment: Assessing Industry Attractiveness

CASE The Personal Computer Industry in 1998 Introduction The Macroenvironment The Demographic Environment The Political Environment The Social/Cultural Environment Technological Developments The Global Environment Assessing the Impact of the General Environment The Competitive Environment The Five Forces Model of Industry Attractiveness Threat of New Entrants Bargaining Power of Buyers Bargaining Power of Suppliers The Nature of Rivalry in the Industry Threat of Substitutes Strategic Groups and the Industry Environment Defining the Strategic Group Strategic Groups in the Personal Computer Industry Implications of Strategic Groups Analysis Application of Five Forces Analysis to Windows/DOS PC Operating Systems Techniques to Monitor the Environment...
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The Competitive Environment: Assessing Industry Attractiveness The Competitive Environment: Assessing IndustryCHAPTER OUTLINE AttractivenessCASE The Personal Computer Industry in 1998IntroductionThe Macroenvironment The Demographic Environment WHAT YOU WILL LEARN The Political Environment The Social/Cultural Environment • The nature of the general Technological Developments environment, also known as the The Global Environment macroenvironment Assessing the Impact of the General Environment • Macroenvironment influences overThe Competitive Environment competition between firms and The Five Forces Model of Industry organizations Attractiveness Threat of New Entrants Bargaining Power of Buyers • The nature of the industry Bargaining Power of Suppliers environment, also known as the The Nature of Rivalry in the Industry competitive environment Threat of SubstitutesStrategic Groups and the Industry • The five forces that make up the Environment industry environment: barriers to Defining the Strategic Group entry, supplier power, buyer power, Strategic Groups in the Personal the availability of substitutes, and Computer Industry rivalry among firms Implications of Strategic Groups AnalysisApplication of Five Forces Analysis • The concept of strategic groups to Windows/DOS PC Operating Systems • Techniques companies use toTechniques to Monitor the Environment monitor changes in the environmentEthical Dimensions Legal Requirements Long-Run ConsequencesSummary 2526 PART 1 Building Competitive Advantage(Case) The Personal Computer Industry in 19981Ever since its mass production and distribution began in the stereo speakers, and numerous “ports” to hook-up a variety ofearly 1980s, the personal computer (PC) has become a mainstay different computer peripherals, such as scanners, printers, digi-in the office, laboratory, factory floor, home, our briefcases, and tal cameras, and other novel items.now, even in our cars. The omnipresence of the PC in many The growing power and popularity of PCs, however, is tes-ways symbolizes our full arrival in the information or cyber- tament to how fast an industry can develop and change overspace age, where the convenience, low cost, versatility, ease, ever shorter periods of time. The first “true” personal computer,power, speed, and infinitely growing applications of computing according to most analysts, was conceived by Xerox Corpora-power are taken for granted. PCs are available for sale in almost tion during the mid-1960s. It was hard to use, designed for sci-every mass merchandising outlet, not only in such electronics- entific applications, and certainly not as user friendly or versa-driven retailing outlets as Best Buy, Circuit City, and Radio tile as we expect today. However, not until companies such asShack, but also on-line from manufacturers and providers over Apple Computer, IBM, Compaq Computer, and others enteredthe Internet, a phenomenon that itself can be traced directly to the market did the PC become the taken-for-granted productthe massive growth and proliferation of PCs everywhere. that it is today. The arrival of the Intel microprocessor—the Current PCs are more versatile than even the ones produced “brains” of the PC—and powerful operating system softwarejust a few months ago. They can be found in almost every con- (from Apple Computer and Microsoft) triggered the PC explo-figuration and size, with the latest PCs now designed to fit in the sion that began about 1980. Since then, PCs have become everpalm of your hand. Each new generation of PC, with substan- more powerful, smaller, and easier to use. Let us examine sometially more power, speed, and versatility than its predecessor, of the factors that have dramatically shaped the PC industryhits the store shelves approximately every twelve to eighteen over the past ten years and continue to do so.months. The growing versatility of PCs to perform a wide arrayof functi ...