Essay
ASUS Porter's Five Forces
- Module
- Business
- Institution
- Birmingham Metropolitan College (BMet)
ASUS Porter's Five Forces
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Introduction:The puprpose of this report is to analyse Asus Company and their products,
such as laptops, notebooks, tablets, phones, etc, and how the organisation
is positiong itself to maintain competitive advantage.
The report will give a clear understanding of Asus internal and external
environment looking at HR department,supply chain, pricing, discovering
the impact that company has on its rivals and will conclude with my own
opinion on how the company can succed in the next 2-5 years.
Background of Asus Company:
ASUS takes its name from Pegasus, the winged horse in Greek mythology
that symbolises wisdom and knowledge. ASUS embodies the strength,
purity, and adventurous spirit of this fantastic creature, and soars to new
heights with each new product it creates.
ASUS is a Taiwan-based, multinational computer hardware and consumer
electronics company that was established in 1989. Dedicated to creating
products for today’s and tomorrow’s smart life, ASUS is the world’s No. 1
motherboard and gaming brand as well as a top-three consumer notebook
vendor.
(https://www.asus.com/sg/About_ASUS/The_Meaning_of_ASUS)
Asus was founded 28 years ago (2nd of April 1989) by Ted Hsu, M.T. Liao,
Wayne Tsiah and T.H. Tung. Asus is now the world’s 4 th largest PC vendor
by 2015 unit sales, with revenue of $472.4bilion (2015)
, Porter's Five Forces:
Threat of entry: LOW
The treat of new entrants on the computers market is extremly low which
can only represent an advantage for Asus Company and for the other 5
major competitors. (Listed in section 4)
For entering in a computer industry, the capital required is extremly big. The
industry requires a significant investment to be made in research and
development and specialist knoledge in order to develop innovative
products in comparison to the other competitiors as well as a start-up cost
for customer service, employees and manufacturing.
Big companies will always have the advantage of economies of scale,
because of the amount of products ordered and manufactured wheres new
entrants will not produce masivly straight from the beging as big
Companies already does. Because of that, the small companies will have
to set their prices higher in order to make a profit wheres the big companies
such as Asus will be able to set their prices lower.
Another huge barrier to would be the brand image. Being a new entrant on
this market, a new name and a new brand will ‘scare’ most of the people
away just by the simple fact that it is not a known brand, therefore it is not
tested by the majority of people, and the price would be quite high as well.
Supplier Power: LOW
There’s only a small number of brands when it comes to computers market
therefore the bargain power of suppliers is weak simply because they won’t
supply their products to many companies. There’s only three main groups
of supplier in the computer industry: hardware suppliers, software suppliers
and service suppliers. They all play a critical role within every computer
business. A good example could be the price. If they decide to rise the
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