Managerial control case study - Essay Example

The specific sector of the PC industry analyzed relates to the product lines offered by Apple Inc. in this industry, and thus includes Desktops and Notebooks together with allied peripherals and Software services. A schematic diagram of the framework used is shown in Appendix-A. One of the most important forces that govern the strategy adopted by a firm within any industry relates to the threat of new entrants. The PC industry is a high-technology industry characterized by constant innovation and technology obsolescence.

Hence the most significant threat from the point of view of entry barriers figures in the form of high capital requirements, primarily for investment in research and development for coming up with innovative products in line with the dynamically changing requirements of the marketplace. This is therefore a major deterrent for new entrants. Secondly, since the industry has been growing very rapidly with large demand volumes in the global market, the economies of scale enjoyed by the established players cannot be matched by the new entrants and thus, this is another significant deterrent to new entrants.

All other factors under Entry barriers are favorable to new entrants desirous of entering this industry. The level of product differentiation in this industry is not very high, with only a few innovative features offered by different competitors making for some minimal differentiation. Similarly the switching cost to buyers is not very high in the industry as a whole, considering substantial standardization. Although Apple Computers has been known for closely guarding the secrets of its proprietary technology so far, now with the alliance with Microsoft and availability of Windows 98 for Mac users since 1998, the switching cost for Mac users trying to switch to Wintel platforms has also been low.

The distribution channels again, are no longer brand channels. Thus on the whole most of these