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PC Industry versus Apple Analysis

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Apple Case Analysis In today’s society, there is an ongoing interest in the study of the forces that can provide competitive advantage to organizations. In 2008, Michael Porter wrote an article called “The five competitive forces that shape strategy.” In this article, he wrote about the five different forces that deal with the attractiveness of an industry. All of these forces shaped every single industry’s behavior in the competitive market in today’s society. In order to better understand the PC industry structure, using this Five Force Analysis would be very beneficial. First in the new entrants force, one of the main barriers to enter this industry is the scale economy. In the PC industry, many companies need to start investing in very large capitals in the beginning. All the capital will gain towards the scale economies, such as financial economy, marketing economy, technology economy, and many other economies. In addition, this industry will also involve patents and rights in order to protect their own innovations. Patents and rights are very important due to setup another barrier for other competitors to enter this industry. Hence, barriers to entry are so high in this industry that the threat of new entrants entering the PC industry is very low. The second force is the substitute products force. Basically, anything that can replace a personal computer counts as a substitute. There are also many other PC companies that are treated as substitutes for Apple’s computer and it is also goes the other way around. Although the substitutes are threats to the industry, it can be beneficial because these substitutes might not have as many functions as a PC. Therefore, there are many substitutes which have a big impact on each of the company’s sales. Now the third force is the supplier force and there are different types of suppliers for the PC industry. The suppliers that provide the hardware components, which consist of memory chips, disk drives, and keyboards, have a low bargaining power. This is due to the product being is widely available at highly competitive prices. However, the microprocessors and operating systems suppliers have more power to bargain. There are only two main competitors existing, which is Intel and Microsoft, which is why these suppliers have more power to bargain. Fourth force would be the buyers’ force. There are five different categories that PC buyers would fall into; home, small and medium sized business, corporate, education, and government.
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