Driving Forces of the Software Industry

Technological change and manufacturing process innovation

In the software industry, the level of technological change is extraordinary. According to IBIS World (2010), chip manufactures for instance AMD, Nvidia, and Intel produces new computer components every six month range. The retail value of these components decreases in value rapidly due to the short cycle of the product. Because of this, the manufactures keep the inventory slim and plan for rapid inventory returns. This makes it feasible to produce better and new parts at a reduced cost. As a result of advancements and technological changes, consumers have welcomed enhancements and computers in communications and entertainments they offer. Companies have also been more passionate in relation to the technological change in software and computers which they use to improve productivity and design new products.

Increasing globalization

The competition in software industry has changed from national to international focus. The software industry is greatly influenced by globalization. In the software industry, the biggest firms have shifted their production facilities to low wage countries. This shift allows manufactures to provide reduced prices on their good so as to compete internationally. Worldwide competition additionally decreases the price of computers also due to labor cost. According to IBIS World (2010), computer imports corresponds to 46.5% of domestic demand and by itself, it can be a great danger for local firms competing with oversea companies.

Additionally, there is an increase in globalization in the wholesaler distributing agent. For instance, Ingram Micro acquired one of the biggest technology distributors in the Pacific region in 2004. As a result, this...

... middle of paper ...

...o and Apple launched iPad in 2011. Therefore, to stay on top of the competition, it’s important to be the first to make invent a new product.

Talented Workforce

It is very vital for a firm to possess talented labor force owing to the competitive nature of the PC industry. As a result of constant technological innovations, a firm without brilliant employees will be left behind which might be catastrophic to the business. Excellent gifted employees are the individuals behind the triumph of a company.

23. Does your overall assessment of the industry suggest that industry rivals have sufficiently attractive opportunities for growth and profitability? Explain.

In my opinion, industry rivals have sufficiently attractive opportunities for growth and profitability due to that fact that intensity of rivalry is very since there are many computer software manufactures.