AN INDUSTRY-COMPANY ANALYSIS: IBM-COMPUTER AND PERIPHERALS INDUSTRY
This research presents a top-down analysis of IBM's participation in the computer and peripherals industry. The findings of this research are presented in relation to industrial organization, products and pricing, labor relations and productivity, and laws and regulations.
Industrial organization is considered within the contexts of market structure, market conduct, and market performance. Each of these organizational frameworks is discussed separately.
Market structure refers to the character of competition within a product market (Byrns & Stone, 1993, p. 473). Variations in the level of competition occur along a continuum ranging from monopoly (highly concentrated markets) at one terminus to pure competition (competitive markets with low concentration) at the polar extreme.
Market structure is defined within the contexts of (1) the numbers of firms and buyers, (2) product substitution, and (3) barriers to entry and exit (Byrns & Stone, 1993, p. 473). While there are some major firms in the computer and peripherals industry with substantial market shares, there also are characteristics of the industry that preclude the characterization of the industry as an oligopoly (Niemond, 1995, p. 1074). First, there are essentially three operating system platforms for which computers are produced, and which in turn create three sub-markets--the PC sub-market, the Apple sub-market, and the Unix sub-market. The Apple and Unix sub-markets are dwarfed by the PC sub-market, but nevertheless create a differentiated product situation within which buyers have a choice. This characteristic is consistent with a market structure of monopolistic competition. Within the mammoth PC sub-market, major product component standardization has led to a market within which a nearly untold number of so-called clone manufacturers produce PC computers, all of which contain either Int...