A Large Number of Firms in the Computer Industry: Market Management - Essay Example

Computer industry is a combined term used to explain the whole variety of businesses concerned in increasing computer software, scheming computer hardware and computer networking infrastructures, the manufacture of computer mechanism and the stipulation of information technology services. So, we have a computer industry and we want to penetrate the industry in our Global Ventures. The computer industry encloses different desktop computers, different laptops. But we will be focusing more on the laptops as compared to the desktop computers. The laptop became more and more fashionable just as the entry-level net book (mini-notebook) sold well through the year, analysts said. Study also showed the occurrence of multi-PCs-per-user and a rolling command for second and third computers in families. Laptop computer, also recognized as a note pad computer, is a little personal computer intended for mobile use. A laptop incorporates all of the characteristic components of a desktop computer, including a display, a keyboard, a pointing device (a touchpad, also known as a track pad, or a pointing stick) and a battery into a single moveable component. Moving a laptop means having immediate contact to different information, personal and work files. Closeness permits better teamwork between coworkers or students, as a laptop can be flipped open to present a difficulty or a solution anytime, anyplace. The laptops are minor than standard PCs. This is helpful when space is at a best, for example in little apartments and scholar dorms. When not in use, a laptop can be stopped up and set away. The first country which we have chosen for the market to enter is India. According to IDC India, a premier global market aptitude firm, the laptop market has recorded 79% Year-on-Year (YoY) enlargement during 2006. The laptop sales are rising at much earlier rate than predictable. India's personal computer market is experiencing a major change. Though, laptop computers cannot totally clean out desktop computers, because both are planned to congregate dissimilar requirements or different consumer sections. According to a top officer of HCL Info Systems, market share of laptops would be 35-40% in the subsequently two years. The major players in the laptop category are: Hewlett Packard (HP) IBM Toshiba Compaq Dell Computers Sony India is a good option to enter with new product line, because of the following reasons: Indian Laptop market is at the present in sync with global market. It was in 2005 that deals of laptops exceeded the sales of desktop computers for the primary time in India. The Laptop market is rising at a fast rate because of variation in work life of consumers. As the need for "anytime wherever" contact to information is growing, the sales of Laptops are also rising. Other factors that are accountable for the tramp in sales figure are decrease in prices and affordability. Laptops are at the moment sold at around half the price at which they were sold two years ago. Laptops costs are at the present almost at par with the desktop computer prices. The last most important factor is responsibility free import of Laptops as personal suitcases that has helped a lot in raising the infiltration level of the manufactured goods among the consumer people. Consciousness about laptops has also enlarged over the years. The significant benefits that have been realized through work with an Indian IT services company that would prompt us to do again are represented in the following graph. Fig 1 India is flourishing in technology industries these days. A report stated that the laptop computer market has practiced a major enlargement of precisely 84.8 percent in theQ3 of this year, in India. As compared to the equivalent quarter of last year, the overall PC market has attained an enlargement 25.1 per cent. Fig 2 The other country which we have chosen is China. Analysts expect China's laptop PC market will preserve a yearly increase rate of 30 per cent until 2006, while the desktop PC market will grow 10 per cent in 2004, slightly superior to last year. We have selected this country because of the following reasons. Desktop and laptop sales in China stay strong. BDA forecasts total sales of desktop and laptop to carry on to increase, striking 16-18 mn per year by 2011, up from 12.5 mn in 2004 and 14.9 mn in 2006. BDA approximates 75% of the new PCs, acquired between 2003 and 2005, to have been associated to the Internet, and we suppose this will amplify to 94% by 2011 The broadband market will also see sustained growth in the next 5 years, driven by rolling Internet growth and carriers' promotions. BDA considers broadband subscribers will reach 128.3 mn by 2011, with a 5-year CAGR of 19%. In 2006, there were 14.5 mn new broadband subscribers in China, a proof high since 2003. Broadband has become the normal Internet access machinery in China, accounting for 68% of the user base in 2006. Carriers are also cutting cost and promoting network infrastructure, as well as initiating time-based charging schemes for low-usage subscribers. Fig 3 31% of IT pros say "Understanding our business and industry" has considerably enhanced the last two years among India-based IT outsourcers. This is the most-often cited area of development, and it's serious for outsourcers looking to move up the value chain. Rajesh Rao, head of Infosys' SAP practice, places it this way in their "What's next" package: Gone are the days when we could say our main quality was our global delivery model and our knowledge of SAP. Those things won't even get us requested. India's talent pool is the industry's main concern (though the dollar-rupee exchange rate's high on the list), but also its main selling point. What other country, asks Infosys CEO S. Gopalakrishnan, can slope up the tens of thousands of extremely technological staffers who'll be desirable to meet the rising market for remote infrastructure 43% of companies using Indian IT services companies will amplify their use over the next two years (26% will decrease, 31% the same). In related data, companies setting up to cut back IT costs because of economic conditions, about a fourth expect new outsourcing bonds to be cut. Other categories such as employing and request extension face much bigger hits. 45% are "less of a believer" in the value of working with Indian IT service companies than two years ago. (31% are more believers, the rest about the equal.) Attention in offshore outsourcing ruins deep seven out of 10 say they got the type of cost savings that would punctual them to contract out again. But the data propose India's IT outsourcers face barriers as they go up the worth chain. The biggest problems which we will countenance are represented in the graph below. Fig 4 At our company the most influential in driving the use of Indian IT outsourcing companies is represented in the following chart. Fig 5 The competitors from India include the following companies. Computer Manufacturers Hardware Distributes Consulting Services E-Commerce Internet Service Providers Multimedia China is “the world’s factory floor and…the world’s greatest market opportunity,” according to Ted C. Fishman, author of the New York Times bestseller, China Inc. From my viewpoint as president of a 70-year-old U.S. manufacturer and dealer to the promotional products industry, China clearly offers significant threats and substantial chances as a factory floor and a market opportunity to both distributors and suppliers in the promotional crop industry. Before exploring the threats and opportunities, let’s set up a baseline for what’s occurring in China. Following are some applicable facts from China Inc.: China has between 100 and 160 cities with populations extra than one million as compared to nine in the U.S. and 36 in all of Europe. Today, a single region in China is home to nearly 6,000 foreign-funded businesses, counting virtually 300 of the Global Fortune 500 companies, with an additional 100 across the river. Until 1980, Shenzhen, a city near Hong Kong, was a little fishing town of 70,000 people bounded by rice fields. It had no bus service, and visitors from exterior had to work their way into town by walking or renting bicycles at the train stations on its outer edge, according to Constance Clark’s “The Politics of Place Making in Shenzhen, China,” in the Berkeley Planning Journal 12 (1998). A mere 25 years later, Shenzhen is a city of seven million people and the fourth largest economy in China (www.cnn.com/2002/business/asia). The regular workweek is 70 hours, and half of Shenzhen’s workers are on seven days a week. Shenzhen is now the world’s sixth biggest haven. In Beijing, “2,000 high-rise buildings are in progress, in one form or another, in and under creation,” says Tim Johnson in his Detroit Free Press article (October 28, 2003), “Chinese Cities Building Skyward.” Every month, five million new subscribers’ sign up for mobile phone examine in China, and young urban consumers amend phones on standard after only eight months. China will create 325,000 engineers this year. That’s five times as several as United States, where the number of engineering graduates has been declining since the early 1980s. This data presents some amazing facts about China’s growth. The number of high-rise residence buildings under creation or standing ready to soak up the flow of people moving in from rural areas to work at factories is, quite simply, astonishing. The size of some of the factories was one of which manufactures furniture and was more than a million square meters. Another factory had a lot of thousands of workers, and the foundation contained a zoo. China has appeared to be a world fiscal giant, standing second next to the United States in terms of gross domestic product (GDP) in 2005. China`s economic bound has noticeably fashioned the whole Southeast Asian economy including the Philippines. Economic expert and Philippine Institute for Development Studies (PIDS) President Dr. Josef T. Yap stresses that China`s economic growth has unfavorable effects to be mitigated, and at the same time, repayment to be maximized by the Philippines. Basically, there are three main reasons why China maybe a threat to our computer industry is that they are the strong inflow of cheap Chinese products in the different markets, ensuing in the weakening of restricted firms and defeat of employment opportunities; straight competition of lower-priced Chinese commodities with manufactured goods in the international market; and China being a favored destination among developing economies of foreign direct investments (FDIs). On the other hand, such threats can be looked into quite as opportunities to be exploiting by our region to improve its economy, most particularly, in the opposition between Chinese products and our industry’s exports. This is the industrial area wherein our Industry could take advantage and develop more since China has yet to expand a more sophisticated industrial structure. In adding, the literature points to the subsequent factors as some of the most important determinants of FDI—market and political factors like market size and height of real income, worker skill levels, accessibility of infrastructure and other possessions that make possible efficient occupation of production, trade policies, and political and macroeconomic steadiness. Our industry needs to strictly monitor the above determinants. The economic threat of China could in reality be a help to enlarge ASEAN countries. Two-way trade in manufactures, enlargement of global product sharing and the development in product range, superiority and markets by the increasing countries are the three recent developments in near trading. Aside from trade, ASEAN countries could also advantage from the region of investment. In traditional economic model competition among the rival firms forces the profits to zero. The five forces model is represented the following figure. Fig 6 The intensity of the rivalry is influenced by the following industry characters which are The large number of firms of the computer industry increases the rivalry because more number of firms competes for the same customers and resources. If the firms have similar market share, chief to a struggle for market management then it also increases the rivalry Slow market growth roots firms to fight for the market share. In a rising market, firms are able to improve revenues simply because of the expanding market High fixed costs outcomes in an economy of scale effect that increases rivalry. When total costs are mostly permanent costs, the firm must create near capacity to reach the lower unit costs. Since the firm must sell this large quantity of product, high levels of construction lead to a fight for market share and results in increased rivalry. High storage costs are extremely consumable products cause a creator to sell goods as soon as possible. If other creators are attempting to unpack at the same time, competition for customers intensifies. Low switching costs increases rivalry. References 1. www.vitisphere.com/elettre/pdf_fichiers/China_report_2004.pdf 2. www.ppbmag.com/Article.aspx?id=3863 - 49k 3. www.researchandmarkets.com/reports 4. www.bioversityinternational.org/news_and_events/news/article/article/sesame-threats-and-opportunities 5. news.alibaba.com/article/detail/laptops/100032974-1-laptops-surge-computer-market.html - Bibliography 1. Carroll, Paul, Big Blues: The Unmaking of IBM, Crown: New York, 1993. 2. Chposky, James and Ted Leonsis, Blue Magic: The People, Power and Politics Behind the IBM Personal Computer, Facts on File: Oxford, 1988. 3. Ferguson, Charles H. and Charles R. Morris, Computer Wars, New York: Random House, 1993. 4. Rose, Frank, West of Eden: The end of innocence at Apple Computer, New York: Viking, 1989. 5. Sculley, John, Odyssey: Pepsi to Apple... Journey of adventure, ideas, and the future, New York: Harper & Row, 1987. 6. Smith, Douglas K. and Robert C. Alexander, Fumbling the Future: How Xerox invented, and then ignored, the first personal computer, New York: William Morrow, 1988. 7. Young, Jeffrey S., Steve Jobs: The journey is the reward, London: Scott, Foresman and Co., 1988. Read More