7. Consider the computer software industry, Use the industry positioning matrix

Question

7. Consider the computer software industry, Use the industry positioning matrix (Porter 1985) , attempt to categorise the following products:
• Microsoft Windows XP
• Mac OS x (tiger and i-life)
• SPSS statistical software (used by many graduate students and professionals)
• TCI Scientific Word (word processing software tailored to researchers who use lots of mathematical expressions.)
• UNIX specialist software for banks

Which category (i.e. which quadrant) of the matrix is more price elastic and which is less price elastic? Explain why.

Explanation / Answer

From most elastic to least elastic I would rank them in the following way: Microsoft Windows XP TCI Scientific Word Mac OS X SPSS Statistical Software UNIX Specialist Software I ranked them in this order based on the number of individuals who use them, the availability for similar replacements, the value held by the public in them, and the amount of reliance users have for the software. Microsoft XP for example is outdated, it still has a large audience though but price would be one of the main considerations for it's purchase making it was I consider the most elastic software of the five. TCI Scientific Word is highly elastic also because there are similar offerings in the marketplace, some may even be free to use. I understand it likely have a nice user interface and specific features worth paying for and it is a specialized program so I ranked it slightly higher than Microsoft XP for that reason. Mac OS X is considered essential by some users and annoying my others who prefer to use Windows on a Mac. For that reason I listed in at around the middle of the elasticity range due to the mix to heavy users and nonloyal users. SPSS Statistical Software is a complicated program with a few alternatives but is relied upon by scientific professionals and researchers. It's audience is limited but at the same time reaches a significant part of society and could be seen has having more value. Due to the effect of the results of their software on society, I ranked it as a less elastic software, if individuals need the software, schools generally buy it or receive funding to purchase it. UNIX Specialist Software a very specific, tailored software bank employees would likely not know how to replace. Due to the lack of knowledge on alternatives, I would rank this as having the highest elasticity.

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