Softcat LTD - Research Paper Example

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Taken from Softcat Ltd. website, details of the company are presented. Softcat Ltd. is a privately held company founded by Peter Kelly in 1993 specializing on software licensing, hardware, security and related IT services. …
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Softcat LTD
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"Softcat LTD"

It also offers a wide range of services that includes advice, guidance, technical design, product sourcing, implementation, support and project management. At present, company has long time business dealings with over 1,500 customers of different types and sizes.
Supplier Power: Softcat is a reseller and relies on its suppliers for input. Softcat has 57 suppliers that supply unique product of its own and as such has some degree of strength and control over the company.(“What we do”) Softcat cannot just switch from one to another like switching from IBM to HP because of customer’s needs. Supplier power is dealt with much difficulty because it is easy for suppliers to drive prices up.
Bargaining power of Buyers. Buyer power is high because of the importance of each individual buyer to the business such that it is easy for them to drive prices down. Buyer can easily switch from Softcat’s products and services to someone else, so they are able to dictate terms.
Competitive Rivalry. The IT industry has many competitors that offer equally attractive products and services. Most likely they also get their inputs from the same suppliers of Softcat because there is no exclusive contract with suppliers. Softcat have little power in the situation because suppliers can go to other resellers if they don’t get a good deal from the company.
Threat of Substitution: Softcat is affected by the ability of customers to find a different way of doing things from what company offers. For example, they may use their own IT solutions and this can weaken Softcat power on the company because substitution is easy.
Threat of New Entry: Softcat’s power is affected by the new entrants to the market. Because of non-exclusivity of IT suppliers, and it costs little time and money to enter the market and compete, Softcat’s power is low. STRATEGY USED: Softcat Ltd. use reselling in the course of their business. The company sells and supports software, hardware and security products which they secure from main technology vendors. They also get their products from other suppliers Read More
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