“Technology is anything that wasn’t around when you were
born” is rightly quoted by Alan Kay (American Computer Scientist) but the Big
Five came into existence after most of us were born. Alphabet (Google), Amazon,
Apple, Facebook, and Microsoft are the tech giants that form the set of Big Five.
They are pioneering in their own domains i.e. online search and ads high-end
devices, e-commerce, cloud services, app store, digital content distribution,
and productivity software.
Talking about Big Five:
Revenue Streams-
They are 5 US based tech companies are the most valuable
stocks in the US market and in 2016 these companies combined for $555 Billion
Dollars in revenue.
Four Cores-
Platform strength: Talking in terms of strength the Big Five companies have businesses based on all-presence around of their businesses eco systems & respective platforms, in other words, smaller companies networks are inclined towards them. This in turn has led them to gain in terms of revenue, cash flow, profits, and enterprise value and finally giving them platform strength.
Innovation reinvestment: Without innovation a company cannot
move forward, keeping this in mind the Big Five’s focus is on ploughing back of
their profits in their research and development divisions. As per the 2016
Global Innovation 1000 study by Strategy&, PwC’s strategy consulting
business, the Big Five’s come among the top 11 Research &Development
spenders across all industries.
Acquisition strategy: Alphabet, Apple, and Microsoft among The
Big Five especially been active players in acquiring of companies due to
availability of reserve funds. The Big Five’s main focus is on Merger & Acquisition
of small and medium size firms getting catch hold of their technical expertise that
will give an edge to them in areas like machine learning, virtual reality,
artificial intelligence, and augmented reality.
Talent attraction: The Big Five aim to also to hire employs
aggressively to complement new product development and capital deployment at their
part. In terms of employment generation since 2011, the Big Five have led to
creation of more than 418,000 net jobs and talking getting jobs their employs
are eminently employable at other firms as well.
Competitors-
Next 20: Following the Big Five based on enterprise value the
largest U.S.-based technology companies are, Applied Materials Adobe, Broadcom,
Analog Devices, Hewlett Packard Enterprise, HP Inc., Dell Technologies, Cisco
Systems, Oracle, Qualcomm, Intel, Micron, Nvidia, Intuit, IBM, Western Digital,
Symantec, VMware, Salesforce.com, and Texas Instruments. All of them are
focusing on shifting to software-defined hardware from existing pure hardware and
from products to services, managed services, and solutions.
Chinese Challengers: The Chinese Challengers includes China
based: Alibaba, Baidu (Web services company), Huawei, JD.com (Jing Dong, e- commerce
company), and Tencent (Investment holding company).There companies are highly successful
in their domestic market i.e. China and they also expanding their operations
abroad as well. For example Huawei have had been operating overseas for more
than 10 years.
Others: The Big Five are facing competition from sectors
like healthcare, financial services & industrial operations as there are in
for technologies like the IoT (Internet of things) and related fields. For
example companies like AT&T and Verizon (Telecommunications firms) are making
investments in fields like the IoT, 5G, content advertising, and emerging
distribution technologies.
To conclude in present age dominance in the tech industry no
longer depends upon only identifying & understanding customer needs and making
use of new or innovation in existing technology to make a good or service to
fulfill it. It can be said that clear strategic identity, Business models and a
well-defined portfolio of platforms, products, and services gives the Big Five
an edge over its competitors. But in long term if similar strategies are
adopted by its competitors they may also gain similar competitiveness.
References:
1) Technology trends: Report by PWC
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