Palm Five Forces

1.

At the time the Palm Pilot was launched, Palm was operating in the PDA industry. Palm Pilot had initiated the PDA market by launching a hand-held product to complement the laptop by having a device that implemented an innovative, simplistic “note-taking” concept that allowed for instant synchronization to the user’s main computer. Being an early bird in this market, Palm did not experience any pressure from buyers, suppliers and substitutes but had to struggle against potential threats and competitors.

During the first couple of years, the buyers and suppliers lead to the success of the PDA. There are many suppliers in the electronic market that sell electric components for cheap, allowing anyone in the market to be successful. When the Palm Pilot was launched, the number of buyers in the market increased with time, making it easier for Palm to be successful (Palm Case, p.2). The lack of competition made the customers more loyal, and less picky with technology.

Palm’s success invited a lot of potential threats into the market. The similarities between the PDA and other hand-held products made it very easy for other electronic companies to enter the market. Also, being hi-tech was very important for success in the industry and richer company could invest more into research to have better technology. To neutralize potential threats in the market, Palm needed to funnel a lot of money into research and discipline its supply chains to adapt new technologies quickly without any errors.

The potential threats quickly translated into competition. Nokia launched the Communicator Line series in 1996, which was significantly improved in 2000 (Palm Case, p.4). In 1998, Microsoft entered the market as the first major competition with its Pocket PC and spent sufficient dollars on research and development (Palm Case, p.4). Palm lost its early bird advantage to Microsoft after experiencing manufacturing glitches in 2001 (Palm Case, p.2). Competitors were improving in terms...