Industry analysis Essay Example | Topics and Well Written Essays - 750 words

Industry analysis - Essay Example The forces have profound impact on the industry and on the organization. The global economic recession will affect both the national economies and the organization. The consumers' disposable income will be reduced. The weak economy negatively affected software sales, increasing pressure on software firms' gross margins. This means that higher marketing and operational capabilities should be more important than R&D capabilities i.e. the ability to rapidly innovate. The technological environment consists of the skills and equipment used in design, production and distribution. R&D capabilities are thought to be particularly important in software industry. In this industry,being first to market is often essential to becoming the de facto standard. Given the rapid rate of change in the software industry, we would expect that firms having higher R&D capabilities would have a distinct advantage (Slaughter & Shanling & Shang, 2006). The demographic forces result from changes in the nature, composition and diversity of a population. More and more households use the Internet. The baby boomers age i.e. people that are over 54 are interested in using a computer.The education and entertainment software segment is growing very quickly (U.S. Department of Labor, 2006). On the business side, computer networks are pop... The trend in business customers is to have their data accessible, secure and private. On the other hand, the task environment includes immediate persons involved in producing, distributing and promoting the offering and therefore it includes internal and external factors that are influenced by the general environment. The task environment forces are suppliers, distributors, customers and competitors. The suppliers provide organization with inputs. The managers of the organization need to secure reliable input sources. The suppliers provide raw materials, components and even labor. In the case of the software industry the suppliers provide mainly components and service. It can be hard to work with suppliers' shortages and lack of substitutes. Suppliers who are in a good bargaining position are those that possess scarce items so they can raise the price. Managers' preference is to have many similar suppliers of each item. The distributors are organizations that help others to sell goods. Microsoft, which is a leader of the software industry, uses mainly wholesalers for selling its products to the SOHO market whereas Microsoft sells directly to the large customers. The distributors can threaten not to carry your product unless a strong brand name is established as it is in Microsoft's case whereas the actual power is in the hands of the producer. Customers are the people who buy the goods. For Microsoft, there are business, home and government buyers. The competitors are other organizations that produce similar goods. The most serious force facing managers is the rivalry between competitors. High levels of rivalry often means lower prices and profits become hard to find. Software industry is characterized by intense rivalry but due to the fact that the R&D