Apple Inc. 2015.
The formation of Apple Inc. can be dated back to 1976. The founder; Steven Jobs and Steven Wozniak came up with the first computer called Apple I. Apple II was then introduced in 1978.The introduction of Apple II set the pace in the industry since it had a setting for color display. Apple became one of the leading PC industry members when they eventually an application that was used to upgrade the Macintosh computer. Notebook computer that is the first generation was released in 1991 followed by PowerMac family and power Book in 1994.The growth of Apple Inc. was not without challenges. Prior to 1997, Apple Inc was ...view middle of the document...
The iPhone was relatively consolidated, with the US market dominated by three sellers who collectively controlled the bigger share of the market. It is concentrated and dominated by three key companies that include Nokia, Samsung and Motorola companies. Besides, the products in this industry are virtually identical, with a little differentiation, and several of the competitors have gone into vertical integration in the hope of gaining competitive advantages over the other (rival) companies, considering the market size and growth rate for the industry. The fact that Apple is committed to expanding its innovative technologies by introducing Smartphone offers an excellent opportunity for it to broaden its market shares as well.
The strength of the industry competitive forces is measurable with the help of the Five-Forces Model of Competition. This model is an efficient approach for creating a clear picture of a business environment. It contributes to determining the attractiveness of an industry by determining whether profits in the industry will be high or low.
Competitive Force of Buyers- the buyer power is strong because they have sufficient bargaining advantage to obtain price concession and other favorable terms. Also, there is a great importance attached to the seller-buyer partnerships in the industry. In respect to Apple, buyer competitive power is high as well because other rivals have the same product readily available, and switching cost for consumers to competing brands are low.
Competitive Force of Substitute Products- there really is not much room for substitute products to thrive, as the three principal companies have a handful of differentiated products, also they all manufacture notebooks, which is the primary product of the industry. The only major problem arising facing the key player in this industry is rivalry amongst themselves as sellers in the industry. Though Apple has managed to create a name for itself owing to its brand quality, nonetheless, it still suffers from competitive force of substitute products because there good substitute for its products readily available from other competitors, and they are attractively priced as well. Besides, end users switching cost is low, and they have grown more comfortable with using these available substitutes.
Competitive Force of Supplier Bargaining Power- the suppliers in this industry are somewhat limited, and as such, competitive force is quite high. For instance, Nokia and Samsung, both of whom supply Smartphone with essential components, have been known use their dominant market status not only to charge premium prices but also to leverage the market in other ways. Given that Apple develops most of its own software e.g. operating system (Mac OS) and another component with the exception of microprocessors are widely available and at competitive, it is highly unlikely that Apple would bow to supplier bargaining power.
Competitive Force of New Entrants- the mobile phone...