Personal Computer Market Research Articles

The influence of demand factors on dynamic competitive pricing strategy: An empirical study

This empirical paper investigates the relationship between the dynamic strategic interactions among competitors in a component market and demand factors in the market for the end product. The structure of competition in the US microprocessor (MPU) industry is analyzed using data on prices and sales in both the MPU market as well as the market for personal computers. The pattern of dynamic strategic interaction between competing firms in this market on a key decision variable, price is studied. Non-nested model comparison tests based on equilibrium solutions derived for specific differential games are applied to identify the mode of competitive strategy between pairs of competing brands. The empirical fit to the longitudinal and cross-sectional data, of alternative models of competition, independent (Bertrand–Nash), Stackelberg leader–follower, and Collusion, is used to determine which dynamic model best describes actual competitive behavior over the life of each MPU. Demand for the product market which is downstream from microprocessors, that for personal computers, is estimated using a generalized diffusion model with price effects. Data from the markets for desktop and laptop computers are analyzed at the level of computer vendor and internal microprocessor. Patterns are uncovered, linking downstream demand parameters with upstream competitive strategy. There is evidence to suggest that when there are strong diffusion effects driving sales of both the competing computer brands, there is a higher likelihood of Bertrand–Nash competition among MPU firms. However, when there are higher cross-price effects (substitutability) among personal computer brands there is a greater chance of Stackelberg leader–follower price competition. When self-price effects are relatively high, the likelihood of Bertrand–Nash competition among MPU firms increases. Furthermore, when the potential demand for the computer product category is high, there is a higher likelihood of Bertrand–Nash pricing in the MPU market.

Measuring consumption efficiency with utility theory and stochastic frontier analysis

The concept of production efficiency has been studied since the 1960s, but consumption activity as well may be inefficient for various reasons, such as product complexity, lack of information, the bounded rationality of the consumer and imperfect markets, to name a few. This study proposes a conceptual framework for measuring the consumption efficiency of differentiated products, based on traditional utility theory. It employs stochastic frontier analysis (SFA) in an empirical analysis. It makes use of hedonic price theory to link traditional utility theory and the SFA framework. When the developed model is applied to the Korean personal computer market, empirical results indicate the levels and distribution of consumption efficiency in that market. The findings afford us a better understanding of the characteristics of the innovation process in that market.

Limited Information and Advertising in the U.S. Personal Computer Industry

Traditional discrete-choice models assume buyers are aware of all products for sale. In markets where products change rapidly, the full information assumption is untenable. I present a discrete-choice model of limited consumer information, where advertising influences the set of products from which consumers choose to purchase. I apply the model to the U.S. personal computer market where top firms spend over $2 billion annually on advertising. I find estimated markups of 19% over production costs, where top firms advertise more than average and earn higher than average markups. High markups are explained to a large extent by informational asymmetries across consumers, where full information models predict markups of one-fourth the magnitude. I find that estimated product demand curves are biased toward being too elastic under traditional models. I show how to use data on media exposure to improve estimated price elasticities in the absence of micro ad data.

The role of techno-countervailing power in inducing the development and dissemination of new functionality – an analysis of Canon printers and Japan's personal computers

Industrial economics suggests that a competitive environment induces firms to undertake vigorous R&D, while a monopoly enables firms to efficiently acquire R&D resources. Therefore, optimal co-evolution between competition and monopoly is indispensable for significant technological innovation. This paper attempts to demonstrate this postulate by analysing the interacting dynamism between technological development and production in the printers market as well as subsequent demand for the expansion of the personal computer market driven by new functionality development of printers. On the basis of an empirical analysis of Canon printers and Japan's personal computers, the significant role of techno-countervailing power between supply and demand in inducing and disseminating new functionality is demonstrated.

Research Issues in Building Brand Equity and Global Brands in the PC Market

Global brands and the building of brand equity in one of the most innovative business sectors, for the personal computer market, are examined within the context of the phenomenal growth of the IT industry. Research issues concerning data collection, timing and measures of brand performance for the pc market are discussed. These are important because the gathering and diagnosis of information about customer commitment to personal computer firms or their loyalty to brands give early warning signals to marketers about customer disaffections and defections. Account is taken of marketing communications for global brands by pc manufacturers to support their brands. The review of the literature showed problems in the assessment of a brand's strength, value and potential given the increased volume and diversity of market data and differences in interpretations. Qualitative and quantitative approaches are presented with examples of brand equity models and conclusions derived for managers researching and developing brands.

Assessing the Economic Value of Distribution Channels: An Application to the Personal Computer Industry

Abstract Evaluating proposed changes in channels of distribution and matching products to channels in multichannel product markets are difficult tasks for the management of any company. Such policy-oriented issues cannot be addressed easily by methods such as controlled experiments in test markets, which are feasible methods for evaluating pricing and advertising decisions, or by using historical sales/profits data. In this article, the authors show how the framework of structural modeling and policy simulations can be used to evaluate such policy changes. They also show how to assess the economic value of each channel to each firm and to its customers. They apply such policy simulations to the personal computer market, which is characterized by multiple firms competing through various channels using multiple products. The analysis quantifies the profit impact on firms and the welfare impact on consumers of many proposed channel actions and provides an economic rationale for different actions observed in ...

The Media are the Message: 'The Influencers'

The author reflects on the impact of media and other opinion leaders in the 1970s and early 1980s on the emerging software industry: The fortunes of companies in the nascent personal computer market rose or fell, depending on what these opinion magnates said, wrote, or did (or did not)

Xenitis Group of Companies

The Xenitis Group of Companies emerged as a significant player in the personal computer (PC) market in the Indian subcontinent after the introduction of its Aamar PC, priced below Rs 10,000. Starting as a trading company and then launching its own desktop, Xenitis had seen its annual turnover grow from Rs 20 million to excess of Rs 1,780 million. Buoyed by its success in the Indian market, Xenitis planned to expand in international markets, targeting an annual turnover of Rs 50,000 million by year 2010. The entry of new players, offering low-priced PCs with similar configurations, in both Indian and international markets posed a serious challenge to Xenitis. The launch of sub-Rs 15,000 PCs with credit facility offered by financing companies also posed a threat to Xenitis, as consumers could now opt for higher-end PCs from better-known manufacturers.

Consumer confusion in the Chinese personal computer market

PurposeThe paper seeks to identify the sources of confusion in the Chinese personal computer market and the confusion reduction strategies used.Design/methodology/approachA self‐completion questionnaire with a sample of 140 respondents was used.FindingsTechnological complexity is the major source of confusion. Word of mouth is the most common source of information used to reduce confusion due to its credibility and reliability.Practical implicationsTechnical confusion leads to similarity confusion and overchoice confusion. Manufacturers and retailers need to address technical confusion to reduce the overall level of confusion in the PC market.Originality/valueThe paper examines confusion in an Eastern culture, whereas previously it has been predominantly investigated in Western cultures.

Intertemporal pricing and price discrimination: a semiparametric hedonic analysis of the personal computer market

AbstractWe apply a smooth coefficient semiparametric model to a unique high‐frequency data set to examine the intertemporal pricing of personal computers. Furthermore, we test whether firms charge differential component prices for their top performance personal computers and whether premium firms charge both a premium for all their computers and a premium for their top performance ones. We find nonlinear effects in the pricing of personal computer components. We also find that firms in general do not charge differential prices for the components of their top performance computers. In addition, high‐quality firms charge higher premia only for their most advanced products. Copyright © 2006 John Wiley & Sons, Ltd.

Strategy as Vector and the Inertia of Coevolutionary Lock-in

To examine the consequences of a period of extraordinary success for the long-term adaptive capability of a firm's strategy-making process, this comparative longitudinal study of Andy Grove's tenure as Intel Corporation's chief executive officer (CEO) documents how he moved Intel's strategy-making process from an internal-ecology model to the classical rational-actor model during 1987-1998. His creation of a highly successful strategy vector pursued through an extremely focused induced-strategy process led to coevolutionary lock-in with the personal computer market segment, in which Intel's strategy making became increasingly tied to its existing product market. Intracompany analysis of four new business development cases highlights the inertial consequences of coevolutionary lock-in. The paper examines implications of coevolutionary lock-in in terms of its effect on balancing induced and autonomous strategy processes and exploitation and exploration in organizational learning.

Patent litigation as a leading market indicator

The purpose of this paper is to introduce patent litigation as a leading indicator of market growth. We model the intensity of patent litigation and the market growth for the personal computer and cellular phone market in the USA. By means of these analytic models, we show that patent litigation is a leading indicator of market growth. We are also able very precisely to delineate discrete stages of the product's market life cycle and demarcate the time when life-cycle transitions are about to take place. We close this paper with a discussion on new lines of patent research that are potentially useful for managerial practice and for investment decisions.

Evolution of the high-end computing market in the USA

This paper focuses on the technological change in the high-end computing market. The discussion combines historical analysis with strategic analysis to provide a framework to analyse a key component of the computer industry. This analysis begins from the perspective of government research and development spending; then examines the confusion around the evolution of the high-end computing market in the context of standard theories of technology strategy and new product innovation. Rather than the high-end market being "dead", one should view the market as changing due to increased capability and competition from the low-end personal computer market. The high-end market is also responding to new product innovation from the introduction of new parallel computing architectures. In the conclusion, key leverage points in the market are identified and the trends in high-end computing are highlighted with implications

An introduction to the industrial applications of microcontrollers

A microcontroller is sometimes described as a “computer on a chip” because it contains all the features of a full computer including central processor, in-built clock circuitry, ROM, RAM, input and output ports with special features such as serial communication, analogue-to-digital conversion and, more recently, signal processing. The smallest microcontroller has only eight pins but some having 68 pins are also being marketed. In the last five years, the prices of microcontrollers have dropped by 80% and are now one of the most cost-effective components in industry. Being software-driven, microcontrollers greatly simplify the design of sophisticated instrumentation and control circuitry. They are able to effect precise calculations sometimes needed for feedback in control systems and now form the basis of all intelligent embedded systems such as those required in television and VCR remote controls, microwave ovens, washing machines, etc. More than ten times as many microcontrollers than microprocessors are manufactured and sold in the world in spite of the high profile that the latter enjoys because of the personal computer market. In Zimbabwe, extensive research is being carried out to use microcontrollers to aid the cost recovery of domestic and commercial solar installations as part of the rural electrification programme.

Information technology and personal computers: the relational life cycle

This paper aims to identify the characteristics of the spread of information technology. Our hypothesis is that this process is intimately linked to the nature of technological innovation in the personal computer sector. According to this hypothesis, this paper highlights the technological trend in the personal computer industry and shows how it has encouraged the spread of information technology, broadening its field of application from computer science professionals to mass users. To this end, around 840 models on the personal computer market between 1988 and 1997 were considered. The paper shows that the impact of technological innovation on the personal computer sector consists of a rotation effect and a lengthening effect of the price–performance curve. These two effects together have given information technology that all-pervading character which has allowed it to branch into all sectors of society. Moreover, the paper highlights the existence of a relational life cycle between the personal computer and information technology. This relational life cycle is characterised by four phases: introduction, up to the early 1990s; development, from the early 1990s to the mid-1990s; expansion, from the mid-1990s to the second half of the 1990s; and maturity, starting in the second half of the 1990s.

Consumer decision-making in a multi-generational choice set context

Most new product adoption models have focused on single-generation products. Only recently have researchers begun to focus on the importance of analyzing consumers' purchase demands in multi-generation products. This paper proposes a model that incorporates both initial and repeat purchases and allows for leap-frogging behavior for multi-generation technological products. Whereas most new product adoption models are based on aggregate market sales, the proposed model is estimated and validated on individual consumer data. Within a logistical modeling framework, the model combines a purchase incidence (buy/not buy) component and “generation” choice components for each time period. These model components allow for individual heterogeneity. Purchase probabilities for buyers are captured as a function of purchase history, buyer expectations of future generations, and preferences for the currently available options. The proposed model is parsimonious. It requires relatively simple data for estimation. It is empirically tested using individual-level purchase data from an illustrative pilot study in the multi-generation personal computer (PC) market. The model fits and explains individual consumers' actual purchase behaviors reasonably well.

Hot Groups: Seeding Them, Feeding Them, and Using Them to Ignite Your Organization

Many corporations, in their attempt to create innovative products and services, have focused on the concept of building teams. While many groups fizzle, on rare occasions the members of a group will experience an extraordinary eruption of excitement, transcending an organization's rigid confines to achieve astonishing results. These individuals, say Jean Lipman-Blumen and Harold J. Leavitt, are lucky enough to be members of a a phenomenon they lucidly and enthusiastically describe in their ground-breaking new book Hot Groups. A hot group is not a name for a newfangled team, task force, or committee. Rather, a hot group is defined by a distinctive state of mind coupled with a style of behavior that is intense and sharply focused on its ultimate goal. Stretching themselves beyond their own expectations, members of a hot group plunge into enterprises that have the potential to change, even ennoble, their own and others' lives. Neither trendy fabrication nor new management fad, hot groups have existed since the dawn of civilization, perhaps invigorating groups of cavemen to hunt together furiously for food before winter's approach. Today, examples of hot groups abound in territories such as Silicon Valley, where impassioned people have blazed paths through the burgeoning computer industry. Consider the hot group that created the original Macintosh and revolutionized the personal computer market. John Sculley, who joined Apple in the early 1980s, described a magnetic field that surrounded the Macintosh hot group members, and Bill Gates, Microsoft's mastermind, reported that a hot programming group to which he once belonged didn't obey a 24-hour clock. Instead, they programmed for days at a time, pausing only to eat and talk about software with fellow programmers. Here also are examples of hot groups at work in other industries: the individuals that created the blockbuster TV drama Hill Street Blues; the Navy and civilian personnel that transformed a standard cruiser into a guided missile cruiser in less than 12 months; and even the ad hoc crisis management group advising President John F. Kennedy during the Cuban Missile crisis. Indeed, the inspiring case studies found throughout Hot Groups illustrate that well-nourished hot groups can profoundly transform any type of organization. Still, Lipman-Blumen and Leavitt recognize the risks inherent in loosening an organization's structural soil enough to accommodate these groups. Consequently, they address such issues as how to provide the kind of leadership required by a hot group, how to mesh a hot group with the regimented structure of the overall corporation, how managers can encourage new hot groups, and how best to cope with an overheated hot group. Drawing on decades of research and experience with groups and organizations throughout the world, Lipman-Blumen and Leavitt have written an intensely engaging book about a phenomenon that will become increasingly important in our rapidly changing world. Expertly carving a path through this unmapped terrain, they lucidly demonstrate how managers and executives can ignite hot group sparks in their own organizations.

The Value of Patience and Start-up Firms: A Re-Examination of Entry Timing for Emerging Markets

We investigate how changing technological and industry conditions in emerging markets, driven by product innovation, affect the exit rates of start-up versus established firms. We find that these changing conditions have different outcomes for start-up and established firms. We assert that the higher rates of exit for start-ups compared to established firms is due to start-up firms' lower ability to adapt both to technology and industry changes that occur with technological progress. We test this assertion by comparing the rate of exit of start-up firms to established firms that entered the U.S. personal computer market between 1975 and 1988.

A new power-factor-corrected single-transformer UPS design

Phenomenal growth in the personal computer (PC) market has fueled a corresponding growth in the need for uninterruptible power supplies (UPSs) to back up the utility and prevent loss of data. This paper presents a new off-line UPS design suitable for PC backup applications. It is based on a novel isolated AC/DC converter derived from the integration of a nonisolated buck-boost AC/DC converter with an isolated bidirectional dual active bridge DC/DC converter. The features of the design include input power-factor correction, a single high-frequency transformer for charging and backup, simple control, inherent current limiting, low switch voltage stresses, and zero-voltage switching of the switches over a wide operating range. The UPS output voltage is trapezoidal in shape and the transition slope can be set such that the output current crest factor is close to unity provided the values of the line filter capacitors of the PC are known.

A Case Study Exploring Acer's Global Logistics and Innovation

Acer Inc., Taiwan's largest personal computer (PC) manufacturer and one of the top ten players in the global PC market is well known for its efficient global logisitics. Supply chain framework, material flow, distribution, information flow, and capital flow are critical issues in the worldwide trend of vertical disintegration in the information technology industry (IT) industry. This paper explorers Acer's innovation and problem-solving processes in tackling these critical issues. The case study illustrates how, though continuous innovation, a firm with limited resources can overcome its competitors in a global, dynamic industry.