also characterized by numerous vendors. Among the leading competitors are Microsoft, WordPerfect, IBM, Lotus, and Borland. Microsoft is increasing its presence in the applications software market. The company recently unveiled its Windows-based software with an unprecedented media campaign and has since taken over the leadership in the word-processing market from WordPerfect. In 1989, 42 percent of Microsoft's revenues were generated by applications software; by 1994, that percentage had increased to 63 percent (Economist, 1994, p. C9).
The market for computer industry products is global. In 1991, U.S. exports for computers and peripherals totalled $25.2 billion. In the same year, the world market for prepackaged software was $52.5 billion, 75 percent of which was captured by U.S. vendors (U.S. Congress, 1993, pp. 135, 137). Although competition is rampant among American firms, the U.S. faces minimal threat from foreign competitors.
PART II. COMPETITIVE INDUSTRY STRUCTURE
The acceleration of demand fueled mostly by the burgeoning ho
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