Question

What is competition like in the printer/copier hardware industry? What is the competitive strength of buyers and suppliers? How strong are the threats of substitute products and new entrants to the industry? How strong is rivalry among competing firms? Explain.

Select “true” for those statements that are accurate and choose “false” for those that are not.

1. There is not a direct substitute for printing and copying or the subsequent maintenance activities. However, companies are moving toward cloud technology and digital documents.
   (Click to select)  True  False
   
2. The bargaining power of suppliers is low in this industry.
   (Click to select)  True  False
   
3. Component suppliers are unable to leapfrog over large printer/copier companies because of the high degree of skill required to manufacture these products.
   (Click to select)  True  False
   
4. Buyer bargaining power is low for this industry; buyers do not have the ability to negotiate the price of services/products.
   (Click to select)  True  False

Answer 1

Question 01: True

Explanation: It is true that there is no direct substitute for printing and copying machines, or the subsequent maintenance activities. But with the advancement of new technologies, people are moving towards a paperless office by utilizing cloud technology and digital documents through which the documents can be stored or retrieve online whenever needed.

Question 02: True

Explanation: The supplier bargaining power is low in this industry as the commodity nature of the products that are used in manufacturing the products gives the manufacturers a lot of options and almost no switching costs.

Question 03: True

Explanation: As a high degree of expertise is required to manufacture such products, it is not possible for the component suppliers to leapfrog over large printer/copier companies. This is also the other reason why the bargaining power of the suppliers is low in this industry.

Question 04: False

Explanation: The bargaining power of the buyers is high as the switching costs are low. This is because there is a low level of a technology gap between the other companies. The only important thing that the buyer needs to consider is the maintenance cost as they are often combined with other hardware at better prices.