Bargaining power of suppliers: LOW

The bargaining power of suppliers in the Personal Computing industry is low because of their

smaller size and large numbers. Suppliers in the personal computer industry can be categorized

into three groups, including hardware suppliers, software suppliers and service suppliers. The

core of their products is generally standardized, and they compete by focusing on creating

better, more advanced products at a better price and not through their attempts to differentiate

them. While the number of suppliers is high and every brand has several options in terms of raw

material suppliers, none of them is large enough and therefore does not hold any significant

clout. As a result, firms within the industry can switch between their suppliers relatively easily. It

is really in the hands of the firm and which strategy they are committed to that will determine

whether or not they will utilize a high or low-end supplier. With the quality of a computer is

largely determined by their microprocessors and application system installed within them,

suppliers of hardware and software within the industry play a critical role in the pricing of

products. If a firm is following a high-quality strategy, then it can be expected that their prices

will generally be higher to reflect the higher prices they are paying their suppliers. For example,

the operating system in Apple’s MacBook Pro, known as the OS X, is considered to be one of

the best in the industry and their prices reflect this.

Bargaining power of buyers: MODERATE

The bargaining power of suppliers in the Personal Computing industry is moderate. The

personal computer industry is somewhat vulnerable to the bargaining power of buyers. While

the bargaining power of the individual buyers is insignificant, as a group they hold somewhat

significant clout. The factors moderating the bargaining power of buyers include a limited

number of famous brands, quality of technology and service as well as several other factors

including marketing and advertising. Still, as a group the bargaining power of buyers increases

which is because the balance is tilted in the favor of the consumer in the 21st century. The
consumer in the 21st century is well informed and empowered. He searches for information and

makes his shopping decisions after careful consideration based on feedback from several

sources. Apart from it, the buyers also have more and more alternative options when they want

to make a purchase. And because of the availability, sleekness, and trendiness of these

alternatives, they have become increasingly popular making personal computers more and

more obsolete. Every brand is pushing very hard in terms of quality and prices to attract the

customer.

Threats of substitutes: HIGH

The threat of substitute products for the Personal Computing industry has grown. The growth in

mobile technology has led to a decline in the demand for PCs as the consumers have great

options before them in the form of portable devices like large screen smartphones and tablets

that can provide same features but without the need to carry a large laptop. Users that were

interested in gaming or internet surfing can avail of all these features without having to purchase

a large screen laptop. There are several more features that are common about smartphones,

tablets and laptops. Apart from it, several brands are fighting for market share and work as each

other’s substitutes.