Choke Points and Profit Distribution in the Computer Industry PPT

This PPT slide, part of the 109-slide Market Entry Strategy Toolkit PowerPoint presentation, outlines the structure of the computer industry, focusing on critical choke points that influence profit distribution across various segments. It presents a linear representation of the industry, segmented into categories such as microprocessors, other components, personal computers, software, peripherals, and services. Each segment is illustrated with examples of dominant players, specifically highlighting ABC's stronghold in microprocessors and XYZ's control over Windows software.

The slide emphasizes the implications of these choke points, noting that the dominance of key players leads to the establishment of industry-wide standards. This creates a framework that all companies must adhere to, impacting their operational strategies and market positioning. For instance, the consolidation of control over the customer interface is pointed out as a significant effect of these choke points, suggesting that companies must navigate a landscape where a few entities dictate terms.

The final note stresses that understanding these choke points is essential for companies aiming to optimize their profit allocation strategies. It suggests that mastery over these critical areas can influence not just direct competitors, but also other participants in the value chain. This insight is crucial for executives looking to make informed decisions about market entry and competitive positioning in the computer industry. The slide serves as a strategic guide for understanding the dynamics at play within this sector, offering a lens through which to evaluate potential opportunities and threats.

This slide is part of the Market Entry Strategy Toolkit PowerPoint presentation.

This toolkit is created by trained McKinsey, BCG, and Porsche Consulting consultants and is the same used by MBB, Big 4, and Fortune 100 companies when performing Market Entry Initiatives.

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