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Introduction The industry that will be discussed today is the computers and peripherals industry where we will be focusing on the PC segment in the U.S. market. Due to the increase of computer literacy and popularity of social network, the average number of users who own a personal computer in an average household has increased[1], according to the US Census Bureau’s Current Population Survey, the percentage of household computer ownership is estimated to be at 96.42% in 2017[2]Figure 1.  The product categorization for this business segment consists of laptop and desktop pcs. The customer segmentation for this industry are consumer, education, government, very Large Business (1,000+), large Business (500–999), medium Business (100–499), small business (10–99), and small Office (1–9).  The products that are offered are desktop and portable computers. Within the portable computers segment, there are full-size laptops, desktop replacements, subnotebooks and netbooks[3]. Full size laptops accounts for 69.7% Figure 2 of the laptop sales, which they come equipped with 11.57 screens to 15 inches and are capable of performing day-to-day tasks at a reasonable price tag, roughly under $500.  Desktop replacements, which accounts for 11.4% are laptops that are equipped with a screen size larger than 15 inches and up to 17 inches. The price for these kind of laptops are above $500 and under $1000, depending on the level of its components. The hardware that comes with this type of laptop are generally more expensive therefore are normally used for production, gaming and entertainment. However, the portability is not ideal because a larger battery is required. Subnotebooks, which are also called ultrabooks for their lightweight, slim design and extended battery life, are usually built on Intel ULV platform to consume less power and installed with solid state drives to boot at a faster speed.   Although it is only accounted for 10.7% in the market, yet it has become increasingly popular among consumers for their speed, design and light weight. The average price for this kind of laptop is between $800 to $1500.  The last type is called the netbook, which is takes up around 8.2% of the market. This type of device is the smallest and cheapest ones available in the market today, due to its small screen size – 5 inches to 12 inches and low end computer parts. They usually cost only about $200, extremely affordable but packed with low power chipsets that lack performance. When it was first introduced to the market it was popular amongst developing countries and low income households, worldwide shipment rose 267.4% from 2008 to 2009 due to popular demand but gradually declined from 2010, where it was supposedly affected by the release of apple’s ipad .  The overall computer market size in the U.S.  was $37,034 million  in 2015, which saw a -2.5% compound annual growth from 2011 to 2015. Figure 3 source: MarketLine The composition of the pc market is desktops and portable pcs Figure 4, where desktops account for 32.7% and portable pcs account for 67.3%. Analysts have forecasted the market will continue to decline, an estimated CAGR of -3.1% from 2015 to 2020. This is largely due to the saturation of the PC market and low differentiation of products. There are several reasons why there is low growth and decline for the PC market. First is due to the reduction of the price of the PC over the years, Figure 5, according to Moore’s law, the number of transistors that are able to put onto a circuit board doubles each year, which means the cost of producing computers also steadily decreases.  [Moore, 1965]  However, despite this production trend, the similarity of product functions, capabilities and emergence of product substitutes such as smartphones and tablets have inarguably been another cause of price decline and stagnated revenue growth. According to Daniel research group, in 2020 over 50% of the PC revenue will be replaced by tablet sales Figure 6. As the future for the PC industry looks inauspicious, it is important to ask what kind of strategy PC vendors should propose to survive and break ahead of their competition. Today we will examine two companies, Taiwanese computer manufacturer ASUS  and American computer company Dell.
ASUS is currently the world’s top 3 consumer notebook vendor and the maker of the world’s best-selling and most award winning motherboards. [4]ASUS designs products that perfectly meet the needs of today’s digital home, office and person, with a broad portfolio that includes motherboards, graphics cards, optical drives, displays, desktops, Eee Box and all-in-one PCs, notebooks, netbooks, tablet devices, servers, multimedia and wireless solutions, networking devices, and mobile phones. It has a global staff of more than 11,000, and R&D team of 3,100 engineers. ASUS has a strong global presence, with offices in Asia, Australia and New Zealand, Europe, the Americas, and South Africa. ASUS’s core values include humility, integrity, diligence, agility and change. Its’ corporate vision is to provide innovative IT solutions that empower people and businesses to reach their full potential. ASUS plans to achieve its mission through passion for technology, focus on quality, long-term relationships, and perseverance. [5]History of ASUSOn April 1st, 1989, four engineers T.H. Tung, Ted Hsu, Wayne Hsieh and M.T. Liao, decided to leave their company ACER computers and use the ten million Taiwanese dollars they raised (approximately $321,791 U.S. dollars today) to build their own company that mainly invested in motherboard design and manufacturing. Although the motherboard business at the time was under doubt for its future development, yet the founders of ASUS was confident of the potential for the high-end motherboard market. Very soon, ASUS was able to take the market by storm with their pursuance and demand in product quality. Their breakthrough technology and quick response to the market strengthened their influence earned them the reputation of “Rock hard ASUS quality”  (Translation from Chinese slogan)The Motherboard BusinessASUS started off its business with the foundation of the motherboard. Simply put, a motherboard is a printed circuit board containing the principal components of a computer or other device, with connectors for other circuit boards to be slotted into. In other words, a motherboard could be described as the nervous system of a human body, a communication channel for each components of the body. The CPU (Central processing unit) which is considered as the most integral part of the computer system, was mostly monopolized by Intel (still is to this day), and provided prototypes first to more established companies like IBM, which also designed motherboards at the time. Other companies like ASUS, would normally have to wait for six months to receive theirs. In the early 90s, ASUS created a prototype motherboard to support the Intel 486 chipset, without having the cpu to test with. When ASUS visited Intel’s Taiwan office to request a testing for their motherboard, Intel themselves were having compatibility issues. But when ASUS installed the CPU in their own motherboard, it worked flawlessly at first try. [6]Since then, ASUS had established its reputation for top notch quality in motherboard. To this day, it has been estimated that ASUS has sold over 500 million motherboards, in an average household, every one computer in three has an ASUS motherboard.