Sources of competitive advantage in the computing industry

Author- | Posted- | Updated: November 15, 2018 |

Sources of Competitive Advantage in the Laptop & PC Industry

The laptop and PC industry saw a decline in the recent years caused by the rise of mobile computing and growth in sales of large screen smartphones and tablets. Yet, it is a very large industry and will continue to play a dominant role in the entire technology sector. As the need for portability has continued to grow, a large part of the consumer segment which previously spent on PCs is now spending on other items like smartphones and tablets. In certain areas PCs are irreplaceable and will continue to remain the drivers of productivity and profitability. The brands ruling the PC market currently include Apple, Dell, Asus and HP with HP ruling at the top. competitive advantage in the PC industryAny brand needs to have strong sources of competitive advantage to acquire a leadership position in the technology industry. There can be several sources of competitive advantage in the laptop and PC industry. The industry has grown highly competitive and sometimes a small innovation can change the fate of a newly launched product. It is why apart from hardware efficiency, consumer convenience has also come to play a key role in deciding success. Price is also a key factor that affects competitiveness in the PC industry. This is a discussion of how brands can achieve competitive edge in the PC industry. While the high level competition and large barriers to entry make it difficult for new brands to enter the market, the existing brands also have to push harder to retain their market position. Their focus on marketing and consumer experience has grown because after all it is about brand equity and consumer experience. Read more on how brands achieve competitive advantage in the PC industry.

 

Technology:

Technology is the core source of competitive advantage in the PC industry. Efficient hardware and software are important to achieve competitive advantage because computers are meant to increase the productivity of the users. Growing use of technology around the globe and growing complexity of tasks has also made the demand for more efficient software and hardware grow. While professionals do consider the utility of these machines and their productivity before buying a product, individual users too have grown highly conscious about the technological features. Advanced technology also means higher popularity. Some of the models have gained higher popularity in the market only because they are equipped with advanced technology. It is also why HP to Dell, Lenovo and Apple, all these brands place a heavy focus on technological innovation and invest major sums in research and development.  Technology is also a major differentiator in the PC industry. From HP to Dell and Apple, you will find their consumer experiences sharply differentiated. It is because they are using different technologies and trying to provide distinct consumer experiences. In case of the PC industry, it is true that  growth cannot be achieved without investing in technology. Apart from Apple, most brands run the same windows operating system but then they try to achieve a distinct advantage using better hardware and a few other distinct technological features that make them stand out of the crowd. With time investment in innovation as well as design and style has grown across the PC industry.

Prices:

The pricing strategy of a brand can also be a key source of competitive advantage in the PC and laptop industry. All the brands do not use the same pricing strategy and Apple especially uses a premium pricing strategy supported by its premium technology and design. Apart from that the brand has designed an overall premium experience for its customers. The other brands however, have used different pricing strategies. The leading players have used varying pricing strategies. They have large product lines with several models to cater to the needs of the various consumer segments. From high priced premium products with higher technological efficiency and better designs to low priced products focused at utility, they have priced their products based on demand and use. A gaming laptop like Alienware by Dell is for the premium users and carries a high price tag. However, the same brand also offers laptop models for professional and personal use, more competitively priced and affordable for the lower end consumers. The competitive pricing strategy is mainly meant to reach  a larger market segment. Apple might have a smaller consumer base than its competitors but then its profit margins are much higher. Lenovo, HP and Dell use competitive pricing strategies and sell both to upper and lower end consumers. In the recent years when the laptop and PC industry has been through a downward spiral, they have focused at bringing affordable models. If not for Apple’s premium pricing strategy, its customer base might have been much larger but then the pricing strategy here is also used for differentiation. The premium pricing strategy of the product is linked to the brand’s premium image.

Quality:

Quality has several aspects or dimensions in the world of technology and the PC industry. Technology, pricing, product design and customer service, all these factors contribute to the overall quality. The overall quality is related to the brand image and consumer perception. The higher the quality offered by a  brand, the higher is its popularity and demand. Marketing strategy of a brand must also have quality for the company to be successful.

Customer Experience:

Customer experience has become the main focus of businesses including PC and laptop brands in the 21st century. A seamless consumer experience is now important for the growth of business brands and for staying competitive. For example Apple’s is an interoperable and intercompatible system. It has designed an entire system of interlinked products and experiences from iPod to Macbooks, iPhones and iTune.  It is well known as a customer oriented brand whose central focus is customer convenience and a distinct and superb customer experience that  surpasses all the competing brands.  So, it would not be wrong to say that the PC and laptop brands are pushing the line in terms of consumer experience. This is true however about the entire technology industry including the cloud industry. The advent of slim and lighter PCs is also an example how brands are doing their best to cater to the changing customer preferences. The customers’ taste has kept changing and they are looking for products that better suit their lifestyle. It is not just about prices but also about an experience that fits easily into their daily lives. A seamless experience leads to higher brand recall and is effective at customer retention as well as marketing. Overall, the importance of designing a great customer experience has now become central to achieve competitive edge.

Marketing:

The intense competition in the technology industry is not a secret. So, brands adopt various techniques for differentiation including technological innovation, design and pricing strategy. However, marketing is still the part that if not done properly can lead to failure. Marketing can be a source of strong competitive advantage as in the case of Apple. HP too promotes its key products heavily to generate excitement. This is true about other brands too like Dell and Lenovo. This is also why some of the PC brands have very heavy marketing budgets.  Marketing is not just to promote the product and the brand or to attract higher sales, it is now for building a differentiated brand identity and achieving competitive edge. Apart from heavy investment in advertising and promotions, laptop and PC brands are investing heavily in designing products that catch the eyes of media and people. The importance of marketing for competitive advantage can also be understood from the fact that it is an essential component of PC brands’ marketing strategy. How well you market your brand decides how competitive you are in an intensely competitive industry. This is also why brands are now investing in customer engagement and keeping their customers engaged using marketing and social media channels.

Brand image and equity:

Brand image and equity are also important sources of competitive advantage in the PC industry. It is because these factors are linked to the popularity of a brand and how much its consumers trust it. The higher the level of trust between  brand and its customers, the more likely they are to recommend it and make repeat purchases. Apple is the best example in this regard as most of its customers do not buy just one product from the brand but other intercompatible products too. For example a Macbook owner also owns an iPhone as well as an iPad.  Other brands have also focused on building customer equity by providing great quality products and a seamless consumer experience. The importance of brand equity can also be understood in terms of customer loyalty. Higher equity translates into higher customer loyalty.

Supply chain efficiency:

Supply chain acts as the backbone in the PC industry and the more efficient is the supply chain of a PC brand, the higher is its productivity. An efficient supply chain does not just mean timely availability of raw materials or higher level of production, it also means better management of production costs and higher focus on quality. In most cases higher quality down the supply chain leads to better product quality and lower production costs. Most of the PC brands are not just investing in selection and training of their suppliers but also in supply chain digitisation and helping suppliers manage their human resources. Supply chain success is now also a key determinant of a brand’s success in the market. From Apple to HP and Lenovo, all these brands have managed a large and international supply chain. Most of these brands have a very large part of their supply chains in Asia and particularly China because of the cost of raw materials and labor being low there. The brands that have not managed their supply chains effectively cannot imagine astounding success and so supply chain efficiency is a critical source of competitive advantage.

HRM:

Human resource management can also be a critical source of competitive advantage. This has been highlighted time and again by researchers and scholars that strategically managing your human resources can afford you stronger competitive advantage than your competitors. This is also an area where the technology brands compete fiercely.  Every brand wants to hire only the best for it and this is a race that  has continued to intensify because there has always been a shortage of skilled professionals in technology industry. It is why apart from fat salaries, brands also try to keep their employees satisfied by providing them various financial and non financial incentives. From Apple to Lenovo and Dell, each one has managed its hiring practices well to hire the best engineers that can help their brands grow faster. One more thing that  has become clear about the technology industry is the important role of leadership in the growth of a brand. Leaders have always played a central role in guiding and growing their brands. Steve Jobs is always cited with reverence in the technology industry as one of the most capable and visionary leaders. Overall, the role of HR has now grown central in the PC and laptop industry  because of the critical leverage it can provide for faster growth.

Conclusion:

The PC industry has become intensely competitive in the recent years. Growing competition also demands new strategies and tools for acquiring a leadership status. To remain competitive and to sustain their advantage the laptop and PC brands are investing in several things. Customer experience has emerged as critical factor that can be an important source of competitive advantage if managed well. Similarly, technological innovation, investment in digitisation and use of Artificial Intelligence for a better customer experience, are also critical factors that can help PC brands build and sustain competitive advantage. Apart from these things supply chain and HR too need to be managed well to find faster growth and to have a competitive edge.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.