Use Porters FiveForces Model to evaluate the competitiveness

Use Porter’s Five-Forces Model to evaluate the competitiveness within the U.S. laptop computer market. Which of the Five-Forces is the strongest and most significant in this market? Why is it the most significant and would it be consistant in other markets? Looking at the industry\'s competitive forces, what are the industry\'s key success factors (KSF)? If you were evaluating this market as a new entrant, what moves would the rivals mostly likely make to your entry?

Solution

Porter\'s five forces model for US laptop market is as below:

Buyer Power: Buyer power is high as many companies such as Lenovo, Dell, HP, Sony, Samsung, and Toshiba compete to offer their laptops at a more affordable price to consumers.

Supplier Power: Supplier power is low, laptop manufacturers are forced to manufacture their product at a competitive price in order to stay in the market.  Suppliers also face the fact that their laptop may contain the same processor or hard drive as the competitors so they must offer the Laptop at a comparable price.

Threat of Substitute Products or Services:   The threat of substitute products is quickly on the rise as Tablets have begun to sweep the market.  Tablets such as the iPad were not previously a large threat to Laptop Computers, but now as manufacturers have begun competing to build powerful tablets this has changed.  The move towards web based cloud applications which previously had to be loaded on the hard drives of Laptops, also allow tablets to have a strong hand in the market.

Threat of New Entrants:  The threat of new entrants is low as most laptop manufacturers have made their name in the market and will hold their ground.  Companies looking to enter the market at this time will be focusing their sites on newer and more upcoming technologies such as Tablets.

Rivalry among Existing Competitors: The rivalry among existing competitors is very high as there is a need for laptop computers in most all businesses, institutions, and homes.  The fact that there are several great laptop manufactures competing for the same business, makes this rivalry very large.

A key success factors in laptop industry are : Brand name, quality and economic life of laptops.Another important KSF is the relationship netween B2B buyer group, innovation and improve laptop technologies of laptop.

Since for laptop industry, threat of new entry is low, being a new entrant in the market, already established market players doesn\'t care much since they have established brand name and quality products offered at competitive prices. Porter\'s five force model analysis also justifies the scenario.