Dell

The personal computer industry in 1998 was attractive. Using Porter's five forces analysis, the reasons for this attractiveness can be determined (QuickMBA, 2010). Most computer makers have a moderate amount of bargaining power over suppliers. The handful of major computer makers have high volume and the inputs are not sufficiently differentiated, both factors that give some power to the computer maker. There are also low switching costs within the industry. The exceptions are in the two main components of a computer. There are only two major chip companies -- AMD and Intel, and only one major operating system (Windows). This gives these companies much higher bargaining power over computer makers than other suppliers enjoy. As a result, the bargaining power over suppliers is only moderate, implying that for the most part the bargaining power of suppliers is slightly weak.

While the bargaining power of suppliers is weak, the bargaining...
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