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Global Computer Industry

In: Business and Management

Submitted By ashishrathee
Words 588
Pages 3
Q.1 What role did country environments, government policies and firm level capabilities play in the evolution of the global computer industry?
Country Environments:
Government’s R&D efforts provided the initial spark required by private firms, who took over and expanded the early concepts to commercially viable ideas and products. Also, the government agencies were a major buyer of computer technologies.
Japanese government started many state subsidised research projects which helped local firms to develop competency mainframe and computer manufacturing.
European nations also provided funding to their local firms for R&D.
Government Policies:
Government policies often followed protectionist strategies against foreign competitors and allowed local firms to expand and grow. This was evident from the governments favouring local firms over foreign vendors for buying technologies. In Japan, state departments were mandated to buy Japanese products. The US state departments were a major buyer of IBM’s general purpose computers. All European nations also favoured their own local firms for all government procurements.
The government policies also helped in the regulation of domestic competition and fostered more competition. The U.S. Department of Justice initiated three major antitrust suits against IBM which forced the company to unbundle its hardware and software which opened the door for other hardware and software vendors to make compatible products.
Firm Level Capabilities:
IBM was one of the biggest players in the computer industry and continued to lead the market with its sheer financial clout and aggressive marketing. The dominant position helped IBM set its own rules such as bundling the hardware and software so that the customer is tied to its product line, hence effectively eliminating any competition.
Japanese firms such as NEC and Toshiba had...

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