Computer Manufacturing Industry Analysis

1. environmental ANALYSIS a. Definition of the Industry The following study presents a brief analysis of the computing machine and Electronic Manufacturing Industry in the USA (NAICS 334 north around Ameri fuck Industry Classification System) with special focus on the private Computers sub- field. I made the decision to focus on just one of the sub-sectors due to the large scope of the general diligence. Industries in the Computer and Electronic Product Manufacturing subsector group establishments that manufacture computers, computer encircling(prenominal)s, communications equipment, and similar electronic products, and establishments that manufacture components for such products. (Bureau of assiduity Statistics) Given the former description of the general Industry, I can now go foster in the definition of the real point of study for this paper, which is the Computer Manufacturing, assemble in laptops, PCs and servers. This industry manufactures and/or assembles indiv idual(prenominal) computers (PCs), laptops and servers.Operators typic completelyy purchase computer components (e. g. mother display boards and graphics cards) from dedicated manufacturers in other industries (IBIS earthly concern report 33441a, Semiconductor and Circuit Manufacturing). This industry does not include pill computers, nor does it include manufacturers of computer monitors, mice, keyboards and printers (IBIS World report 33411b, Computer Peripheral Manufacturing). When back the carry throughing industry, The US computer manufacturing industry includes most 1,200 companies with combined one-year taxation of about $75 billion.Major companies include dingle, Hewlett-Packard, and IBM. (Hoovers 2012) The computer manufacturing industrys tax income is divided and measured according to each of the sub sectors that line up it. Personal computers account for about 40 percent of industry tax income mainframes and servers, 13 percent and storage devices, about 10 per cent. (HOOVERS) While respecting to the sub-industry in which this paper is cogitate (PCs, laptops and servers), and considering just the United States, it is conformed by 355 clientelees generating annual tax up to US$37 billion.Being the leading companies Hewlett-Packard, dingle and orchard apple tree. The total summation of units sold for the industry must be taken in status from the quantity of units shipped in the belong year Preliminary United States PC V leftoveror Unit Shipment Estimates for 4Q11 (Units) Company 4Q11 Shipments 4Q11 commercialize Sh argon (%) 4Q10 Shipments 4Q10 grocery Sh be (%) 4Q11-4Q10 Growth (%) HP 4,137,833 23. 1 5,598,619 29. 4 -26. 1 dell 4,020,549 22. 4 4,210,000 22. 1 -4. 5 apple 2,074,800 11. 6 1,718,400 9. 0 20. 7 Toshiba 1,925,100 10. 7 1,968,091 10. 3 -2. 2 Acer sort out 1,756,838 . 8 1,982,477 10. 4 -11. 4 Others 4,014,644 22. 4 3,583,418 18. 8 12. 0 Total 17,929,764 100. 0 19,061,005 100. 0 -5. 9 Note Data includes desk- musical th emed PCs, mobile PCs, including mini-notebooks but not media tablets such as the iPad.? Source Gartner (January 2012) Comparing the studied sub-industry results with previous years, cabbage and revenue have been constantly decreasing and the annual produce in the last 5 years have been negative for the industry in about 5. 1%. Analysts from IBIS project that this entrust continue falling for the future 5 more than years.Nonetheless, The industry is capital-intensive annual revenue per employee is about $460,000 (HOOVERS), while the whole Computer Manufacturing Industry in the US counts with approximately (in thousands) 1,099. 9 employees. b. innate and External epitome OPORTUNITIES -There is a growing consumer demand for PCs and tablets. -Their rapid growth (of the grocery) suggests that they leave become even more important to the economies of all cardinal North American countries in the future (Bureau of Labor Statistics 2012) -The proliferation of cloud execution out leave prompt companies to increase their server investments (IBIS 2012)THREATS -Industry profit will continue to fall because of intense price competition (IBIS World 2012) -TheComputer Manufacturing industryis being rapidly supplanted by imports, constituenticularly from China. (PR tissue 2012) -Imports atomic number 18 a threat for local manufacturing revenue. While import penetration in this industry stood at 50. 7% in 2007, imports be expected to satisfy an estimated 68. 6% of domestic demand in 2012, (IBIS World 2012) -While the outcome of new products and services will boost industry performance, US manufacturers be not expected to produce the required hardware (locally). (PR Web 2012) -() Tablets will cut into industry revenue since they are manufactured abroad and are a competing force to domestic computer manufacturing. (PR Web 2012) -Computer and peripheral equipment prices fell from 2007 to 2012, and as a result, ad hominem computer (PC) gross revenue are estimat ed to generate razor-thin margins of 1. 0% in 2012. (PR Web 2012) STRENGTHS -The Computer Manufacturing industry operates in a exceedingly globalized market, bringing together components that are manufactured ecumenic for assembly in a single location.The concentration of computer manufacturing facilities contiguous major ports comes as no surprise. With the widespread use of lean-manufacturing protocols, computer manufacturers heavy favor locations that minimize delays in getting products to market, not to mention transport expenses. (IBIS World 2012) -Fortunately, PCs are not the only products in this industry, and industry profit, which includes computers and more profitable products, is expected to account for 3. 8% of revenue in 2012. (PR Web 2012) WEAKNESSES The profitability of individual computer companies depends on purchasing and production efficiencies, and on technological expertise. (HOOVERS 2012) -Computer manufacturing and design also require highly-educated e mployees (IBIS World 2012), these are very hard to find, especially in the same area of the business offices. -As a result of offshoring by US-based companies and increased competition from global firms, domestic manufacturing activity has declined. (PR Web 2012) -The demand for the Computer Industry is buttoned to consumer and business income, so its very sensitive and variable. . Customer Analysis The total domestic (US) annual demand for the industry by the end of 2011 was US$62. 2 billion. The industrys woes cannot be blamed on a privation of demand. In fact, the share of US households that owns at least one computer increased by 7. 5 percentage points from 2007 to 2012. While demand has expectant, uncut competition and widespread product homogeneity (the result of computers being assembled from govern components) have led to falling prices and profit margins (PR Web 2012)The identified place markets/ fragments for the Computer Manufacturing Industry are the following 1. Large corporal customers (B2B) commodious companies 2. Small and culture medium size businesses (B2B) Who represent about 20% of U. S. gross revenue 3. Individual Customers and Consumers (B2C) Who represent about 10% of U. S. gross sales 4. Public sector (government and educational) customers. 3. Competitors Analysis The computer manufacturing industry is highly concentrated within its most revenue-significant businesses due to the top 50 companies are responsible of about 90 percent of the total industrys revenue. Competition from abroad has tightened profit margins and prices on mass-market computer systems. Consequently, most of the industrys largest players operate in several cogitate industries to diversify their revenue sources, with a particular emphasis on the highly profitable enterprise discussion section and Information Technology (IT) services. Currently, Hewlett-Packard (HP) and Dell are the largest US-based computer manufacturers, followed by apple. The tot al revenue and market share of personal computers for the last year, regarding the top 3 companies in the industry is . Hewlett Packard PC market Share 23. 1% Total Company tax (Jul 2011-Jul2012) $122. 52B 2. Dell PC Market Share 22. 4% Total Company Revenue (Aug 2011-Aug 2012) $60. 30B 3. apple PC Market Share 11. 6% Total Company Revenue (Jun 2011-Jun2012) $148. 81B Brands Description Hewlett Packard Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers and slim- and medium-sized businesses (SMBs), as wellhead as to the government, health, and education sectors worldwide.It divides in several segments according to their offerings Personal Systems Group segment (commercial personal computers, software and services for the commercial and consumer markets), Services segment (consulting and outsourcing to businesses), Imaging and Printing Group segment (consumer and commercial), Enterprise Servers, S torage, and Networking segment (industry ensample and business servers), Software segment (IT software and solutions), Financial Services segment (leasing, financing and utility programs for enterprise customers, SMBs, and other entities) and Business Intelligence Solutions.The caller-up was founded in 1939 and is headquartered in Palo Alto, California. They serve more than 1 billion customers in more than 170 countries and have approximately 349,600 employees worldwide. HP defines its function in society like this We explore how technology and services can swear out people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams. We apply new thinking and ideas to manufacture more simple, valuable and trusted experiences with technology, continuously improving the way our customers hold up and work. Hewlett-Packard HP come upon Positioning You + HP support it matter. At HP we dont just hope in the power of technology. We believe in the power of people when technology works for them. To help you create. To make the digital tangible. To harness the power of human information. At HP we work to make what you do matter even more. (Hewlett-Packard) Dell Dell Inc. provides corporate technology solutions in the information technology (IT) industry worldwide. It designs, develops, manufactures, markets, sells, and supports mobility and scope products, including notebooks, workstations, tablets, smartphones, and backdrop PCs, as well as servers and networking products.The friendship also offers several technology solutions, systems, software and specialized services. The company sells its products and services directly through its sales representatives, telephone-based sales, and online sales and through retailers, third-party solution providers, system integrators, and third-party resellers. It serves corporate businesses, law enforcement agencies, small and medium businesses, consumers, and public ins titutions that include government, education, and healthcare organizations. Dell Inc. was founded in 1984 and is headquartered in Round Rock, Texas.Dell describes its function in society like this In all we do, were focused on delivering solutions to enable smarter decisions and more effective outcomes so our customers can overcome obstacles, achieve their ideas and pursue their dreams. Above all, we are committed to the superior long-term value they need to grow and thrive. Dell Key Positioning Simple and affordable information technology for everyone They are focused on making information technology affordable for millions of customers around the world. As a result of direct relationships with customers.They are best positioned to simplify how customers mechanism and maintain information technology and deliver hardware, services, and software solutions tailored for their businesses and homes. (MBA association Base 2012) Apple Apple Inc. , together with subsidiaries, designs, m anufactures, and markets mobile communication and media devices, personal computers, and portable digital music players and sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide.The company sells its products and services to consumers, small and mid-sized business, education, enterprise, and government customers through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. As of September 24, 2011, the company had 357 retail stores, including 245 stores in the United States and 112 stores internationally. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California. Apple defines its function in society like this Apple is committed to bringing the best personal computing experience to students, educators, inventive professionals and consumers around the world through its innovative hardware, software and Internet offerings. (Apple) Apple Key Positioning Innovation leaders Competitive Advantage and scheme of each Apples Post PC Strategy They compulsion to be the dominant operational system through your life at home and on the move. That sounds a little geeky but it means that they command you to be so delighted with your experience on the iPhones operating system that you want that same experience on your tablet.After you are cheerful with that experience, you start to wonder why you are still using a PC versus a Mac or MacBook Air as your desktop computer. And then that will extend to your television. (Forbes 2012) Apple wants to own a times of post-PC world users and block out their competitors until such time as they can present a higher-quality user experience than Apple. That might be a long time. (Forbes 2012) The accelerating popularity of mobile computing devices such as Apple Incs iPadhas been wear away PC sales for years.To combat the erosi on in sales to consumers, as well as dwindling margins as companies compete on price, Dell and HP have been gradually focusing more on sales to large enterprises. (Reuters 2012) Dells Strategy Dell has been diversifying its revenue base in the face of weakened consumer demand, giving up low-margin sales to consumers and pitiful into higher-margin areas, such as catering to the technology needs of small and medium businesses in the public sector and the healthcare industry.The company now finds itself follow larger rivals like HP and IBM in the race to become one-stop shops for corporate IT needs. (Reuters 2012) HPs Strategy HP today announced that it has entire its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company. () PSG is a key component of HPs strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers.The HP board of direct ors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HPs business. 4. administrator Summary After this industry analysis, we can see that the computer manufacturing industry in the US is constantly loosing revenue and market share in the world. Almost every business in this Industry (top ranked) are loosing revenue and decreasing profitability. The only company that has increased revenue and has actually grown in the last five years is Apple.For this, I would press Apples executives to maintain their actual Post-PC strategy because it is known that demand for PCs is decreasing while demand for other similar electronics such tablets is increasing and will continue doing so in the future. I would recommend Apple, as well, to focus a little bit also in extending their portfolio of offerings by including special services and solutions in order to attend the B2B market and gain some of their competitors share i n this segment too. SOURCES 1. Bureau of Labor Statistics (http//www. bls. gov/iag/tgs/iag334. htmabout) 2.NAICS CODES (http//naicscode. com/search/MoreNAICSDetail. asp? N=33411) 3. IBIS World (http//www. ibisworld. com/industry/default. aspx? indid=740) 4. Hoovers (http//www. hoovers. com/industry-facts. computer-manufacturing. 1843. htmlmegamenu_0. html) 5. Gartner Newsroom (http//www. gartner. com/it/page. jsp? id=1893523) 6. PR Web Article Computer Manufacturing in the US Industry Market explore Report Now Available from IBISWorld. August 14, 2012 (http//www. prweb. com/releases/2012/8/prweb9797684. htm) 7. Research and Markets (http//www. researchandmarkets. com/reportinfo. asp? eport_id=451844=e) 8. Fox Business (http//www. foxbusiness. com/technology/2012/01/12/apple-remains-in-third-place-with-116-us-computer-market/) 9. Yahoo finance HP (http//finance. yahoo. com/q/ks? s=HPQ) 10. Yahoo Finance Dell (http//finance. yahoo. com/q/pr? s=dell) 11. Yahoo Finance Apple (http //finance. yahoo. com/q/pr? s=aapl) 12. The Wall path Journal (http//online. wsj. com/article/SB10000872396390443862604578030391796799174. html) 13. HP Official Web knave (www. hp. com) 14. Dell Official Web Page (www. dell. com) 15. Apple Official Web Page (www. apple. com) 16. Reuters