Industry Analysis: Apple Computer
1.
Analyzing the computer industry from 1995 to 2005 seemed to be like analyzing a game of
chest between the major competitors. The development is noticeable and the shaping of
different corporate strategies could be sensed easily thanks to the different approaches
toward the movement of the industry that the companies had; some of them shaped it,
some followed it and some helped it grow. In order for us to analyze the computer industry
during the up said time period, we will consider porters five forces analysis, though static,
it helps improve ones understanding of the setting and the conditions of such. Portes five
forces constituted the analysis of the new entrants to the industry as the barriers that can
occur and the rivalry that represents it, the suppliers and buyers power and the threats from
substitute products. With this in mind, in order to determine if the industry is attractive or
not we need to understand the pulling of these forces and therefore the profit potential of
such industry. Since we are mainly concerned with Apple computers, we will alternate also
with the position of the company and its defense against these forces giving a setting for
recognizing the companys corporate strategy.
By 1995 the computer industry was a relatively new industry with a history of around 20
years only, a considerable time for a technology based industry, but still not a mature
industry. On the other hand, by 2002 the industry was all ready a “$220 billion global
industry” showing how “from its earliest days in the mid 1970s, the industry had
experienced explosive growth” and presenting the industry as a very attractive industry
with capability of even more growth. Even with this growing strength, there was a great
presence of economies of scale, if a new company were to enter this industry it would have
to face the cost disadvantage of not coming in with a large scale, since competing against
IBM and Microsoft, and even Apple in a large scale would be suicide. Following, the
industry was characterized also for been very capital intensive, for developing new
products and new technologies required and investment on R&D of around $500 to $700
million, representing in Apples case some what of a 4% to 6% of revenue investment
fluctuating through out the years. On the other hand, by 2005 this capital intensive industry
changed as manufacturers and more competitors a raised, IBM lower its R&D investments
