Analysis of the intensity of competition in the IT industry using Porter's Five Forces Model

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Analysis of the intensity of competition in the IT industry using Porter's Five Forces Model (1)

The IT industry is diverse as it is evolving. It is almost every day we are hearing about new technological advances in the IT industry, whether it is a new super slim laptop(2) or a roll-out of new computer software(3). In order to achieve such advances in technology, large amounts of money have to be spent on R&D, with Samsung Electronics and Hynix Semiconductor pledging to spend around 52.58 billion won(4) on new computer semiconductors by 2011, being a good example of firms trying to gain competitive advantage over their rivals.

According to the latest Garner statistics(5) HP holds 17.4% of the computer market share, with Dell accounting for 13.9%, Lenovo having 7.1%, with 6.8% for Acer and 3.8% for Toshiba.

With such a broad range of definitions coming down under the umbrella-term 'IT industry' it would be more interesting to focus on the firms involved in the manufacture and sale of consumer-orientated hardware, i.e. HP, Sony, Toshiba computers and laptops consumers could buy at PC World, Comets, Curry's, etc.

Threat of suppliers

This force is