Porters 5 Force Analysis Of Apple Inc

1796 words - 8 pages

Apple Inc. specialises in development, design and marketing of computers, portable-digital music players and other didgital devices including iPad’s and mobile devices (IPhone). Apple Inc. are also involved in selling multiple supporting software, digital content, third party applications, networking software and services. Apple Inc. predominantly operate from their U.S headquarters in Cupertino, California and involves 72,800 employees (Forbes, 2013). Revenue for APPL in 2013 has risen from $155.97bn in 2012 to $170.87bn in 2013 (Market watch, 2013) which is a 9.6% increase.
The objective of the Porter’s 5 forces model is to identify and elucidate the current levels of competition ...view middle of the document...

“Rivalry in this industry is expressed by aggressive pricing policies, profound product innovation and design, online intensive marketing, direct selling, and afterscale services (Forbes, 2012) The Table below shows the current market cap Of Apple Inc. with its main competitor being Google Inc. Apple Inc. secures its market leadership by providing products and services with unique attributes using differentiation strategy. They also implement focus strategies such as instead of targeting business users, targeting consumer users with the IPhone.
Table 1 : Apple Inc.’s competitive rivalry within the industry

Source : Yahoo Finance, 2012

Bargaining power of buyers
Bragining power within the mobile market is very low to non existant due to the demand from customers for these pruducts. Consumers are willing to pay retail prices because they want the product, and it would be almost impossible to influence apple to reduce its pricing due to the diversity of its products over competitors. It is that product diversity that allows apple to charge high prices compared to its competitors (Nokia, Dell) who have were made slash their prices due to fierce competition within the industry. In addition, another reason of lower bargaining power of buyers is high switching cost for customers due to change of software or hardware (Griffin Consulting Group website, 2012). Apple however must consider how easily accessable substitute products from competitors are and whether consumers will eventually turn to them due to their lower prices which will cause apples customers to have a high bragining power. Apple however is losing out to Dell in supplying education institutions as there software (Windows) is safer and easier to use than IOS provided by apple.
Bargaining power of suppliers
Apple inc. has high bargaining power over its suppliers due to the fact they can outsource many of their manufacturing products, and have enabled themselves to vertically integrate, meaning they can produce some of their own supplies. This vertical integration has given Apple Inc. great advantages over competitors in the market as they are reducing costs whilst increasing resources.
Threat of substitute’s
The technological environment is changing fast every day. There are not many substitutes in this industry because of the high-tech features. However, alternatives are always available from competitors. If some other company such as BlackBerry, Google, Samsung or Microsoft come up with new technology or the same kind of phone at a lower price or with more features at the same price, then this is a problem for Apple (O’ Grady, 2009). Apple Inc. also proactively dodge’s Gharajedaghi's counter-force of inertia by releasing new innovative products when competitors start to release substitutes for their previous product.
Porters Value Chain
‘Every firm is a collection of activities that are performed to design, produce, market, deliver, and support its product. All...

Other Papers Like Porters 5 Force Analysis of Apple Inc

Apple Inc. Case Analysis

809 words - 4 pages Apple, Inc. SWOT Recommendation Outline Strengths * Market leader * Diversified products and markets * Superior revenue and margins * Ongoing innovative product design * Superior supply chain and manufacturing efficiencies * Product reliability * Highly effective advertising * Ongoing use of superior operating systems * Worldwide demand for the iPhone * Mac’s increasing domestic market share * Management is committed

Swot of Apple Inc Essay

1663 words - 7 pages , government, and creative markets.’(Apple, Annual report, 2010). Competitor Analysis: Apple Inc. works under high competitive environment, some of the major competitors of Apple Inc. in personal computer segment are Dell, Compaq, Toshiba and Sony. Many companies are coming up with innovative digital music players or consumer electronics who are giving tough competition to Apple Inc, main being Sony, creative, iriver, nokia, sony etc. Apple

Risk Managment of Apple Inc

2455 words - 10 pages PLEKHANOV RUSSIAN ACADEMY OF ECONOMICS INTERNATIONAL BUSINESS SCHOOL REPORT IN RISK MANAGEMENT Integrated Risk Management System of Apple Inc Student: Zaeva N. Group: 5402 Supervisor: Malyshev Y.K. Moscow 2010 Table of Contents Overview of the company 3 Internal environment 4 Company Organization 4 Business Strategy 4 Risks Factors and Methods of Management 5 Inventory and other asset risk 5 Supply Risk 5

Apple, Inc. Business Analysis Part 1 Swot

1769 words - 8 pages Business Analysis Part 1: Apple, Inc. Apple is a highly innovated business that entered the business world making computers back in the 1980s. They ventured out in the 2000s making non-PC devices and by the spring of 2010 had a market capitalization of $220 billion dollars. As a mutual fund manager, I have performed a SWOT analysis to determine whether or not to invest in this company. I will identify internal and external stakeholders

Analysis of the Force

1325 words - 6 pages An Analysis of the Force By Anna Yellis In 1977, Star Wars was released. It became one of the most prominent movies in the twentieth century. It created the Force, and expressed a new set of ideas. While many came to believe that in Star Wars, the Force resembled God, it really did not. Many also thought that the Force was based on the twentieth century worldview, once again, it did not. Through analyzing the Force with the twentieth

Possibilities Of Sustainability At Apple Inc

1643 words - 7 pages This paper aims at analyzing the initiatives, which such large organizations as Apple Inc. takes to improve their social, environmental and financial sustainability. The paper also sheds light on the way the organization can deploy cost accounting procedures to enhance their sustainability. Furthermore, the paper highlights the variations in the use of cost accounting by the company under consideration and companies in the past. In addition to

Strategic Analysis Of Apple

4167 words - 17 pages Academic Year: 2008-2009MOUZOUKI THEODORABusiness Administration 3rd YearModule Lecturer: AthanasopoulosUniversity of HertfordshireIST StudiesAthens campusIndividual Coursework: Apple - 2005This case study aims to break down key factors of Apple with a thorough analysis so as to conclude to the most suitable suggestion in terms of strategy that should be adopted by Apple. Apple was founded in 1976 and is the brainchild of Steve Wozniak and

Analysis of Apple Business Strategy

4625 words - 19 pages Analysis of Apple Inc. business Strategic Unit (iPad unit) Contents Introduction .................................................................................................................................................. 2 1. Strategic position of Apple Inc .................................................................................................................. 2 1.1 Competitive strategic position

Financial Analysis of Apple Company

1004 words - 5 pages Siraj Aburokba Susan Robertson Accounting 1A April 30 2014 Financial Analysis Apple I am not a huge fan of Apple products, although I am a big fan of their company. No matter what you read in the press or business press about Apple the fundamental business strategy at Apple is a financial one. Apple’s fundamental strategy is to squeeze as much profit possible from every sale it makes. Apple’s financial strategy is to maximize , a

Analysis of After Apple Picking

1133 words - 5 pages AAnalysis of “After Apple-Picking” by Robert Frost. Mohammad Alawawdeh November 20, 2011 The Speaker in the poem “After Apple-Picking” has been upon a ladder picking apples all day long. He has not picked every apple, but the night is coming and he is getting tired. As the speaker has some thoughts about his vision he had that morning, while he has these thought he may or may not be falling asleep. The speaker is tired of picking apples

"Product Life Cycle of Apple Inc.’S Ipod Paper Mkt230

855 words - 4 pages Product Life Cycle of Apple Inc.’s iPod MKT 230 Name of Professor The Apple, Inc. is one of the world’s leading manufacturers of consumer electronics. They introduced the iPods MP3 player to the market world in 2001, instantly becoming the favored portable music players. The Apple’s iPods MP3 where designed with a large storage capacities. The key purpose of the Apple Company introducing this product is to make use of the consumer’s

Related Essays

Economic Analysis Of Apple Inc

2757 words - 12 pages ECO320-65: CAPSTONE Economic Analysis of Apple Inc Student 2 Cleary University May 14, 2007 ECO320-65: CAPSTONE Economic Analysis of Apple Inc. Introduction 3 Industry analysis 4 Personal computers 4 Computer software 5 iPod and iTunes 5 Company analysis 7 Apple Computers Inc 7 Apple Inc 8 Innovation 9 Profitability 9 Recommendations 11 Personal computing 11 Conclusions 12 References 13 Appendix 14

Apple Inc. An Analysis Of Business Strategy

1242 words - 5 pages Running Header: APPLE INC. IN 2010 Apple Inc. in 2010 An Analysis of Business Strategy American Military University BUS620 16 February 2014 Running Header: APPLE INC. IN 2010 Abstract 2 Apple Incorporated is an industry leader and this piece will serve to address questions pertaining to Apple’s competition in the Personal Computer (PC), MP3, and smart phone market and how its strategy has evolved along with the evolution of the

Case Analysis, Apple, Inc

979 words - 4 pages Analysis, Apple Inc. 5 According to Zhouying & Ying (2011), the organization now needs to sustain growth through continuous integration and coordination (p. 50). The goals of the company needs to focus on the external environment and consist of development for the long term and more emphasis placed on employee retention planning for the “what ifs”. 5 of 5 Case Analysis, Apple Inc. 6 References Mello, J. A. (2011). Strategic Human

Financial Analysis, Apple Inc

4761 words - 20 pages Financial Analysis, Apple Inc. For the fiscal year ended September 24, 2011 By Michael Sarkis 04/12/2012 Table of Contents Abstract 3 Background 3 Stock Performance 5 Ratio Calculations & Interpretations 6 Liquidity Ratios 6 I. Current Ratio 6 II. Quick Ratio 7 Asset Management Ratios 7 I. Inventory Turnover 7 II. Total Asset Turnover 8 Financial Leverage Management Ratios 8 Profitability Ratios 9