Apply Porter 5 forces to IBM

10304 Words Dec 30th, 2008 42 Pages
With Porter five forces framework, we identify the sources of competition facing IBM:-1.Threat of new entrantsHigh capital requirement needed to fund R&D and assets make the threat of new entrants relatively low. IBM spends large amount of funds annually for R&D, in order to constantly introduce new high-technology and innovative products and solutions to market to maintain its' competitiveness,Tougher for new entrants to achieve economies of scale due to experience curve effect. In addition, Consumers' preference over established brands, long-term relationship and broad product portfolio make IBM the preferred brand.

2.Threat of SubstitutesPropensity to substitute is low for buyers. Threat varies from low to medium with high switching
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For its core data network, Maxis deploys Internet Protocol based technology use of DSL technology. The advanced technology which required in the telecommunication industry incurred high capital investment and also needed professional knowledge in relevant sector to success in the industry. It was not easy copy or imitate by competitor.

c) Regulatory PoliciesTelecommunication operating landscape is largely shaped by the country's regulatory environment. Often, the regulatory policies, the number and type of licences awarded by the Government are view as the entry barrier for the development of the industry. The existences of various regulatory such as interconnection fees between operators, call tariffs and the degree of foreign participation. Meanwhile, it is not so easy for a company to apply for a new licence to operate legally in this industry. The process is complex and high cost.

Bargaining Power of SupplierGenerally, the telecommunications industry in Malaysia is dependent on imports for the majority of its network components as most of the network equipment cannot be sourced locally. Maxis' networks utilise standard equipment which is available from a limited number of suppliers. Most of the GSM equipment for Maxis' mobile network operations is purchased from Motorola, Siemens and Trisilco Folec, and Maxis maintains close working relationships with its key network equipment suppliers.

Maxis has been purchasing from these suppliers for

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