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This continues the cycle of relying on production efficiencies and build-to-order strategies as an attempt to break the cycle of disruptive innovations (Ervolina, Ettl, Lee, Peters, 2009).
All of these factors lead to a task-based analysis of the computer peripherals market that continue to illustrate how fragmented and highly cost-driven it has become. Figure 1 shows the market share of the computer peripherals industry from a product standpoint. Computer monitors and hard drives, comprise together 50% of the total computer peripheral market, are going through a series of disruptive innovations mentioned earlier in this analysis. The fact that these two categories generate a high percentage of total revenue in the computer peripherals industry illustrate how dependent channel partners, suppliers and channel partners on continued innovation to stay in business (Thormahlen, 2011). Figure 1, Distribution of Sales by Computer Peripheral Type, illustrates this point.
Figure 1: Distribution of Sales by Computer Peripheral Type
source: (Thormahlen, 2011)
Comparable competitive dynamics are at work in the computer manufacturing industry, with the innovations and pricing structures favoring SSD-based technologies and the use of advanced screen technologies are driving down the costs of portables and tablet PCs faster than any other segment (Thormahlen, 2011). Figure 2, Distribution of Sales by System Type. With 48% of a $46.3B market attributable to laptops and tablet PCs, the trend towards thinner, lighter, more fully defined tablets is now here. The growth of the Android operating system for tablets and mobile devices developed by Google is also acting as a massive price deflator in this market (Vickers, Frey, 2010). No longer will these hardware vendors need to pay loyalties to Microsoft, which had been known to boost the price of a system by $100 or more. All of these...
Now competing on product lifecycle speed and accuracy, in addition to using pricing as a primary differentiator, manufacturers in these industries can't afford to miss a product generation and its core requirements. As a result, there is a higher level of reliance on real-time systems and the use of enterprise applications, business intelligence, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems that provide greater insight into how best to manage their businesses than relying on manual methods. For many of these manufacturers, their supply chains are the most critical part of their business models and the need for continually driving down purchasing costs consumes much of their time. Creating a more collaborative approach to planning, forecasting and manufacturing is the key for many of them staying profitable over the long-term.
References
Ervolina, T., Ettl, M., Lee, Y., & Peters, D.. (2009). Managing product availability in an assemble-to-order supply chain with multiple customer segments. OR Spectrum, 31(1), 257-280.
Jones, G, & George, J. (2007). Essentials of contemporary management . Upper Saddle River, NJ: McGraw-Hill Companies, Inc.
Thormahlen, Casey (2011). Computer Manufacturing in the U.S. IBIS Research Series. New York, NY: IBIS Research. Pp. 1 -- 31.
Vickers, G., & Frey, K.. (2010). When Android Calls Open Source Frontiers in Smartphones. Scitech Lawyer, 7(2), 20-22.
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