There is no doubt that Apple is one of the most successful companies of our time. In addition to millions of fans, Apple has a large number of imitators and competitors. Inspired by Apple companies all over the world try to create sophisticated gadgets on the basis of well-known brand. One can easily recall the history of Microsoft - many people believe that its success is largely due to Apple.
Nowadays, Apple has a lot of competitors like Microsoft, Google, Samsung, Dell, Lenovo, Nokia and others (Investopedia, 2014). Around eight years ago when the market met its first iPhone, Steve Jobs created a new segment of the mobile market, that evolved into a full-fledged smartphone market with a touch screen. Apple set the standard with the device, and a few years reaped the fruits of success. It took Samsung only a couple of years to make a competitive product comparable in price and quality (in the issue of patents let versed court). How many years will Korean company need to surpass the iPhone?
Among the main strengths of Apple competitors (on the example of Samsung) is first of all copy instead of innovation, which sufficiently decreases the costs. Unlike Apple Samsung does not position itself as a pioneer and innovator, instead they adhere to the latest trends on the markets and demonstrate the ability to adapt quickly. Secondly, it is the relative independence from the suppliers. Apart from the fact that Samsung is the world's largest supplier, it has facilities for the production of displays, processors, memory, battery chargers and other accessories based in its affiliated companies. According to the estimates of Morgan Stanley, Samsung produces from 10% to 20% of the components themselves. Own production allows them to achieve greater compatibility of its components with the products of other manufacturers (eg, processors Samsung Exnos 4412 with 3G, LTE chip data). And, thirdly, it is price range. Apple initially was focused on selective marketing strategy, although as a result iPhone has become rather popular. Samsung, on the contrary, chose a wider price range able to satisfy every user. This helped Samsung to increase the share in different segments of the market and be ahead of Apple in the category of smartphones and Nokia in the category of standard mobile phones.
Among the weak points of Apple competitors is first of all lack of innovation and corporate culture. Often Samsung or HTC devices look very much the same as iPhone; have the same functions or even more. Thus society considers their target group to be people who can not afford Apple devices. In addition, a lot of Samsung devices are made of plastic and do not look and feel trustworthy. At the same time, Apple invested a lot of money into the research of the best material and so-called "Gorilla Glass" to make apple devices of the highest possible quality.
Still the main competitive advantages of Apple remain the brand fans, who are often compared to the religious community and even divided into several groups (Egan, 2015). Changing the minds of customers towards a revolutionary device, the company offers new gadgets and services that introduce new value system to its clients. And users appreciate it by buying new version of the iPad and iPhone after each (usually annual) updating the line. Therefore a photo of crying girl with the caption "Now I do not have the latest iPhone" is not just a joke, but an illustration that verifies company's marketing strategy. Has anyone thought about what all these people do with their old iPhone? That's right, give relatives, friends, or simply sell. They have new owners - users of the second level. They join the ranks of the many millions of Apple clients, are connected to the system and shake their content from iTunes and App Store. Eventually, second level users bring a secondary profit for Apple. Thus, the followers of the first echelon annually enlarge the secondary market, millions of iPhone from the previous generation. It also works out for the success of new products.
Any company can only be successful if acknowledges its risks and knows how to avoid them or at least decrease their influence on the company's productivity. Risks are traditionally divided into two groups - internal (within the company) and external, that are influenced by the outside factors. Among internal risks of Apple Company is too closed and too protected system. IOS is world known safest operation system. But sometimes its overprotection makes it difficult for the regular customers to deal with. There are more and more applications that can not be installed on IOS due to its protection code. Therefore, a lot of clients tend to choose devices with less complicated ecosystems. Secondly, technical limitations also are likely to drive customers away from Apple in the future. For example, iPhones have inserted firm amount of storage memory that can be increased only by buying new iPhone. Samsung customers can just put in the memory card and the storage increases up to 10 times. Thirdly, size really matters here. Devices become bigger and bigger so it is difficult for the customers to use them or sometimes even put in the bag (Raman, 2011).
External risks are mainly influenced by the global trends on IT market and whether Apple Company can adjust to them or no. External factors can best be described by means of PEST analysis and Porter’s Competitor forces. So first of all, political situation has a very strong effect on Apple and its customers. Moreover, geopolitical situation, terrorism, health issues and other governmental duties can not be controlled by he government but have a huge impact on Apple sales. Economic factors, first of all, purchasing power directly influences Apple profit (Analysis, 2015). Social and technological factors always played in favor of Apple Company, in particular, with Apple fun club and continuous technological advances. In addition, it is difficult to overestimate the influence of competitors - existing and potential once.
Every effective company, including Apple has a very strong Risk Management team whose task is to avoid and manage risks. A great instrument of preventing and avoiding risks is diversification (Quora.com, 2015). For example, if one market is not favorable for the company in terms of political and economical trading restrictions or very tight competitors force Apple always has a growth opportunity on other markets. Another good point is the diversification of suppliers to decrease the dependence on them. It is always better to prevent risks than to “cure” the consequences of them. Still the company should also have plan of actions for the situations when risks occur. The first thing Apple analysts do is collecting as much information about the situation as possible. After that a meeting usually takes place where risk management team members along with the Board of Directors discuss alternatives of solving the problem. Basically, the actions always depend on the probability of the risk situation. Nowadays Apple analysts consider their competitors and the probability of a new player at a risk game to be the most threatening risks. Nevertheless, taking into account the worldwide popularity of Apple it is difficult to imagine that. Apple is a Rolls-Royce in the world of design and technology, and its customers are willing to pay that much money because they believe in Apple and share its values.
References
Analysis, T. (2015). The Complete (External and Internal) Analysis of Apple.Inc and its SWOT Analysis. Academia.edu. Retrieved 25 April 2015, from http://www.academia.edu/7103572/The_Complete_External_and_Internal_Analysis_of_Apple.Inc_and_its_SWOT_Analysis
Egan, M. (2015). The 10 types of Apple fan: which one are you?. Macworld UK. Retrieved 25 April 2015, from http://www.macworld.co.uk/feature/apple/10-types-of-apple-fan-which-one-are-you-3594309/
Investopedia,. (2014). Who are Apple's (AAPL) main competitors in the tech industry? (AAPL.LNVGY,GOOG,SNE). Retrieved 25 April 2015, from http://www.investopedia.com/ask/answers/120314/who-are-apples-aapl-main-competitors.asp
Quora.com,. (2015). How does Apple manage exchange rate risks? - Quora. Retrieved 25 April 2015, from http://www.quora.com/How-does-Apple-manage-exchange-rate-risks
Raman, M. (2011). Five Key Risks To Apple's Dominance. International Business Times. Retrieved 25 April 2015, from http://www.ibtimes.com/five-key-risks-apples-dominance-284203
