Sun Microsystems

A Case Study
Misti Walker
4/26/2009

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1. What is competition like in the computer server industry? Which forces
are the strongest? Which are the weakest?
Competition in the computer server space is highly competitive, particularly at the
low-end , with intense pricing wars between Dell, IBM, and Sun. The proliferation of
the Linux operating system is the strongest competitive force. In 2002, after years
of denial, Sun acknowledged the advantages of the Linux operating system and
began offering Linux products in order to compete in the less expensive server
space. Acknowledging the value of the Linux operating system dealt a blow to
Sun’s value propostion - the bundling of computer hardware, software, and services.
A weaker competitive force is the landscape in the low-end server space, an
inability to compete on the basis of price against rivals like Dell and IBM. This could
be turned into an opportunity if Sun would adopt the best value provider
proposition.

2. Identify the forces driving change in the computer service industry.

Which are likely to have the most significant impact in the future? What is
the likely impact of these changes?
Some forces driving change in the computer service industry are the increasing
popularity of the open-source, inexpensive Linux operating system and the rise of
an Intel competitor, AMD. The growing popularity of

Dr. Silver, I have been having to double up on my allergy medicine just to be able to
breathe. The downside is that it makes me extremely drowsy. Instead of making
you read a bunch of jumbled garbage, I am simply submitting what I have so done
so far and hope that it makes sense.

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3. What is Sun Microsystems' business model? What impresses most about
the company?

4. What are the chief elements of Sun's strategy?

5. What resource strengths and competitive capabilities have been

developed at Sun Microsystems? What resource deficiencies and
competitive liabilities appear to exist at Sun Microsystems? What market
opportunities do you see for Sun Microsystems? What external factors
might possibly threaten the company's future success? Do a SWOT
analysis to support your answers.

6. How important are strategic partnerships in Sun's strategy? What are

the benefits of these alliances? What are the potential weaknesses
associated with these agreements?

7. What is your assessment of Sun's financial performance from 1996-

2005? Does the company's financial performance indicate that its strategy
is working well?

8. What were the primary factors that lead Sun Microsystems's

competitive challenges from 2002-2004? How has Sun reacted to these
challenges? Have the company's turnaround efforts been successful?

9. What recommendations would you give to Sun's chief managers to

regain a leadership position in the computer service industry? Is Sun's
vision of "The network is the computer" still viable? Will spending heavily
on R&D be sufficient to rejuvenate the company's core business?