| Company A: |
Company B: |
| Company A makes low-cost PCs. It was one of the first companies to make a low-cost PC, and it was very popular 10 years ago. However, it is starting to struggle because it is not keeping up with current technological advancements. |
Company B makes cell phones that also play music and movies. The company has developed a design that means the phone can come in many different shapes and sizes, and is very inexpensive to produce. |
| After 10 years of high profits, this company is starting to make less money. It's still profitable, but the profits aren't increasing each year as they had previously. |
With its new design and lower prices, Company B is starting to see its profits soar. The company is selling its new phones as fast as they can make them. |
| Company A's low-cost PC is falling in popularity because it does not have compatible software for downloading music or making digital movies, it only has "office" software like word processing and spreadsheets. |
Company B's phones are extremely popular because of the new design. In fact, it has become a fad in most high schools to own this type of phone, and some people are buying two or three of them at a time. |
| Company A's share of the low-cost PC market is falling because consumers are choosing to buy computers that have the capability to download music. |
Because customers buy Company B's phones, they are not buying other phones, so Company B's share of the cell phone market is increasing. |
| The other low-cost PC makers have been able to sell their computers with compatible software for downloading music and making digital movies. |
No other cell phone company has been able to come up with a similar innovative design, or low-cost means of production. For this reason, no other company is competing very well with Company B. |
| Company A just hired a new CEO to help improve the company. The CEO previously was the head of a chain of restaurants, and knows nothing about the computer industry. |
Company B has a strong management in place, with managers who have worked in the cell phone industry and are also innovative thinkers. The company plans to keep the same management it place. |
