The Structure of the Personal Computing Industry - Essay Example

The structure of the personal computing industry over the past 30 years and changes in the industry Over the last30 years, the personal computing industry has grown tremendously from a small market to a large market. From the period that Apple launched its first personal computer, there has been a considerable growth in the number of people owning personal computers across the world. In the 1980s when Apple launched its first personal computer, few people showed the desire to own them. The company only focused on creating personal computers for the high-end market customers who could afford them. During the initial stages of the launch of personal computers, only IBM staged competition to Apple as a manufacturer for the personal computers. With the low sales volume of personal computers, there were low levels of activity in the personal computer business. However, with time there has been an increase in the number of people owning personal computers. This growth has led to an increase in the number of personal computers produced. Subsequently, more companies have joined in the business, increasing the number of personal computers produced over time. As the increase in the number of personal computers grew, Apple lost its market share in the business. As people increasingly embraced the ownership of the personal computers, more companies joined in the business. Although there was a decrease in the market share, there was an increase for revenues accrued by companies in the business. Companies developed new ways of reducing the manufacturing costs of personal computers. Among these methods, include partnerships that contribute to the low amount of money spent by a company developing its own software, the reduced R & D costs. Finally, personal computer manufacturing companies started procuring parts and materials for their computers from different countries with low pro9ducyion costs, subsequently increasing their revenues and profits. With the current trends in the personal computer business, more companies find it more profitable to engage in the business than ever. Increasingly, more companies have started manufacturing personal computers due to the increase in the profitability of the business. Apple for instance in 1997 reduced the number of products produced from 15 to three allowing the company to concentrate on the manufacture of personal computers. This came with the realization of the potential of the personal computers in the society. if there were no profits made from the business, then Steve Jobs could have decided to remain manufacturing the wide variety of products it did before the boom of the personal computers. According to Yoffie & Slind (2008, p. 4), Microsoft in the year 1997 invested approximately $150 million in Apple as a company to develop a Microsoft operating system for the Mackintosh. Although Apple was still profiting from the sale of personal computers during this time, many people who owned Windows operated personal computers preferred that they would not buy a Mackintosh due to its operating system. In order to revamp its market ownership in the personal computer business, the company got into partnership with Microsoft to develop a Windows operating system for the personal computer. Increased investment in the personal computers by person al computers, in 1998, there were total sales of approximately 300 million units. Over time, the personal computers have become more important among the people. This has increased the number of people owning personal computers, subsequently making the business more profitable. Factors contributing to Apple’s competitive advantage Throughout its history, Apple has experienced varied growth over time. As the industry transformed, so did the company. Despite the current success and profitability of the company, it has gone through rough times in past. From a struggling computer manufacturing company to a successful incorporated organization with high quality products, Apple has changed its operations and organizational structure to suit the business. However, this did not happen automatically, as the company has gone through tremendous changes in an effort to achieve its profitability. In its struggle to achieve success in the business, Apple Company changed its internal structures and management, operations and product specialization. While some of these changes had positive impact on the success of the company, others were a source of the company’s failures. The ability of an organization to transform its internal strengths and manage its weaknesses determines its level of competition. Internally, the company’s capability and capacity in transforming resources into high quality products is the main reason for success of the company. One of the internal strengths of the company is its labor force and experienced workers. The company considerably invests in highly experienced people who work in the organization. After Steve Jobs left the country, the company hired John Sculley, a former CEO of the Pepsi-Cola company who had successfully propelled the company to success. Although the investment in the highly qualified and experienced CEOs did not turnaround the profitability of the company, their expertise helped in laying the structures for the eventual growth and success in its subsequent years. Despite college dropouts being the founders of the Apple Company, the match of the two entrepreneurs gave the company a competitive advantage over other companies. The ability of Apple to combine superior software such as Aldus, PageMaker and peripherals such as laser printers gave Mackintosh unmatched capabilities in the desktop publishing business. Apple has never shied from investing in research and development of its products. The company started developing computers, but later diversified into other products. Having developed the first personal computer, the company had an opportunity to transform itself into a successful company. However, other firms such as IBM joined in the industry, giving the company increased competition. As the industry progressed, IBM developed low cost products that served the same purpose as Apple’s personal computer. This contributed to a decrease in the sales volume and subsequent revenues of the company. However, the company through research and ability to get into partnerships with companies such as Microsoft has given it a competitive advantage over other firms in the business. Finally, the ability of Apple to transform its operations into different businesses over time has been a major contributing factor to its success. The company’s flexibility in changing its operations with minimal struggle significantly helped in transforming its success. As the personal computer business developed, the company faced increased competition from companies in the business. In its struggle to achieve growth and success, the company severally changed its operations such as reducing R& D costs that would save the company’s operational costs. Later, after the company regained full operation and started gaining in the personal computer business, the management, led by Steve Jobs increased the R & D costs for the company in an attempt to increase quality of its products. Moreover, there is little management and leadership issues affecting the company, if the organizational structure is anything to go by. The ability of the company to manage its operations in an effective manner without leadership issues has contributed to the growth of the company’s competitive advantage in personal computers. Read More