The first force in Porter's Five Forces Model is Entry Barriers. These factors are those that make it harder or easier for another company to enter into the industry. High barriers to entry will keep potential competitors out of the industry and low barriers to entry will give an opening for competitors to enter into the industry if the industry returns are high enough. (Hill & Jones 82) The fewer competitors in an industry the more the existing companies can take advantage of higher prices and better returns.

IBM does set some standards for its suppliers however. Once suppliers enter into a contract with IBM, they must follow specific instructions given to them. These instructions include document requirements (eg: packaging list, billing invoices, etc.), packaging and labeling requirements, shipping instructions, and even country of origin marking (See Appendix A). IBM also has instructions for exports to IBM corporations in the United States (www.ibm.com).

As we have looked into the Laptop industry we have noticed that IBM's competitors have somewhat taken market share away from IBM due to an increase in the compatibility among its products. Whether you want a laptop with mega memory and great graphics or high power and good Business programs, you must make a choice between many offers in your laptop selection. Because of the dramatic increases in the laptop market IBM has seen some declines in sales yet they haven't taken as hard of a hit over the past ten years as Apple computers have. Because of IBM's high ratings in the computer production market, their competition has had a battle in itself to make up for losses in sales and production due to the current success level of IBM. (Research Insight) From our research we have found that IBM and Apple, who were once the leaders in the computer industries have taken pretty sharp cutbacks in production and prices to stay in competition with the rest of their competitors.

The Personal Computer (PC) or desktop, is a machine capable of repetitively and quickly performing calculations and instructions. Its Design is to be used by a single person; a PC is smaller, less expensive and easier to use than other classes of computers, such as supercomputers, mainframe computers, or workstations. However, it usually has less computational power (www.msn.encarta.com). PC's can most likely be found within office environments, schools, and homes. Along with typewriters and word processors, their prices are far less than laptops as well.

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Each of these forces in Porter's Five Forces model are all connected in some way. The stronger each force is the more the industry in which the company is in is competitive. When an industry is more competitive this leads to lower prices due to price wars and ultimately lower rate of return. One of the limitations to this way of looking at industry analysis is that the Five Forces model looks at an industry as a whole instead of each individual company.

The second of Porter's competitive forces is the bargaining power of suppliers. Suppliers can become severe threats to any company when the business depends on them for their products, but the supplier does not depend on the company for business. Suppliers are a threat when "they are able to force up the price that a company must pay for its inputs or reduce the quality of inputs they supply, therefore depressing the company's profitability. If suppliers are weak, this gives a company the opportunity to force down prices and demand higher input quality" (Hill & Jones, 2001).

Some common words found in the essay are:
Hill Jones, IBM Apple, Buyer Power, Personal Computers, Packard Compaq, Macintosh Apple, Substitute Products, Computer PC, Suppliers Porter's, IBM's EDI, hill jones, notebook computer, hewlett packard, word processors, laptop computers, world wide web, web march, substitute products, 13 2001, ibm apple, world wide, five forces model, march 13 2001, wide web march, web march 13,
Approximate Word count = 3306
Approximate Pages = 13 (250 words per page double spaced)