Government Policy:.
There is no direct government regulation of the PC Industry. .
Competitive Force: Power of Suppliers.
Only 2 suppliers make the Central Processing Unit (CPU) of the computers. This alone provides the knowledge that this is a high level of power. The CPU market is dominated by two current companies: Intel, who supply the all-new Intel Pentium4, and AMD who has the new Athlon-XP-M. A company who wish to produce a product in the PC Industry must contract with either or both companies.
Since the PC industry is an important customer of the supplier group, the CPU companies state the pricing and level of quality for the computers that go on the market with no intent to uphold information. Nevertheless, they market their items with a fixed rate, only to be tampered with on the basis of quantity. For these items, the barrier is high.
Most consumers have a branding preference to either Intel or AMD. Most companies contract with both companies to provide a broader option to their products.
The other items within the computer are Power Supplies, DVD's, Hard Drives, and CD Burners, which have a wide range of suppliers. For these items, the barrier is low.
Overall, the barriers in Power of Suppliers are medium-high, and therefore the threat is categorized as a medium-high risk in the industry.
Competitive Force: Power of Buyers.
The buying power of retailers/private consumers is determined by the following rules. Purchases in large volumes. This must be considered in the production and economies of scale, particularly if heavy fixed costs characterize the industry. In the PC industry, it relates to the hardware (CPU).
The buyers will value new products in the PC industry, but will require meeting criteria and specifications that are on the market today. The products/computers must have the right hardware to deal with the current software in the market today. In fact, the software is becoming constantly complex, and therefore the hardware & the PC industry must raise the bar for their potential market.