Competitive Strategies in the Computer Industry

Competitive Strategies in the Computer Industry

Shameem Akhter (Western Oregon University, Monmouth, OR, USA), Nayem Rahman (Portland State University, Portland, OR, USA) and Mohammad Nirjhar Rahman (University of Rajshahi, Rajshahi, Bangladesh)
Copyright: © 2014 |Pages: 16
DOI: 10.4018/ijtd.2014010106

Abstract

A firm's competitive behavior is very important for its survival. Relevant stakeholders in an industry are interested in a firm's operational as well as financial performance. In order to gain competitive advantage, a firm must remain steadfast during changes it goes through over time. This is true for the computer industry as well. The computer industry has been advancing very fast and firms in the industry are experiencing fierce competition for many reasons. This study examines the computer industry in terms of Michael Porter's framework for analyzing the profitability. The authors conduct a critical analysis of the threat of new entrants into the computer industry segment, the bargaining power of suppliers in the industry, the bargaining power of buyers in the industry, the threat of substitute products or services, and rivalry among competitors in the industry. This study has implications for incumbent firms and new entrants into the computer manufacturing industry that evaluate competitive strategies in the industry.
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2. Theoretical-Framework And Research Approach

Competitive strategy of a firm is thought to be of major importance in its success in the industry (Gatignon & Robertson, 1989; Goolsbee, 2001; Kumar et al., 2011; Lawless & Fisher, 1990; Mathews, 2002; Porter, 2008; Prahalad & Hamel, 1990; Tambe & Hitt, 2012). These studies reinforce the importance of understanding different forces of competition. This is true for both incumbent and the new entrants. Bush (2012) asserts that developing an organization's competitive strategies is instrumental in staying ahead of the competition. Research has shown that competitive strategies need to be assessed from the standpoint of the threat of new entrants (which matters to incumbents), the bargaining power of suppliers (true for both incumbents and new comers), the bargaining powers of buyers, the threat of substitute products (matter of concern for incumbents), and rivalry among competitors (Porter, 2008).

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