Porter’s five-force analysis
Apple Inc is among the reputable top leading institution in the technological innovation. It majors in the production of watches, iphones, Mac OS X, iOS and watchOS. Over the years, Apple Inc has been facing high competition from other large companies such Samsung, Blackberry and more. According to the recent research, it is evident that Apple Inc has managed to dominate the market share for over the five years (www.apple.com).
New entrants Threat
The industry has experienced a moderate threat of new entry. The capital-intensive production process has limited new entrants into the business. Apple Inc has established a fruitful customer relation strategy that assists in maintaining the customer loyalty. The manufacturing of high-quality products has also contributed to the moderation of the new entrants.
Threat of substitute
The threat of substitute is experienced from large competitors such as Samsung and Techno. The competition poses a threat of substitute by providing customers with the similar high-quality products at low rates. It weakens Apple Inc dominance in the market share.
Customers bargaining power
The customers have a low bargaining power. In other words, the customers do not have much of the option to purchase the products and services from the competitors. The products differentiation and high quality have generated customer loyalty thus eliminating the bargaining power of the customers.
Apple Industry Rivalry
The company has gotten into stiff competition. Apple Inc marketing strategies are determined by the external factors affecting the market share. The competitors have lead to the emergence of high innovative approaches in the production of high-quality products.
Bargaining power of suppliers
The technological advancement has lead to a moderate level of the bargaining powers of the suppliers. Apple Inc acquires its raw material at considerable standard cost. Despite, the emergence of large competitors, Apple Inc has been able to maintain its products’ brand and high quality.
Industry life cycle
Industry fundamentals:
Competitive structure / market share
The competition in the market share has been stiff due to the entrance of large competitors producing high-quality product. Apple Inc has been able to maintain its market structure despite it facing stiff competition from Samsung. The market share is widely spread across the world. Therefore, Apple’s product has been able to penetrate through most of the continents due to its high quality. Apple Inc has bigger market shares in the USA because of its user-friendly products (www.apple.com).
Long term demand /growth outlook
Recent statistics indicate that over the past five, Apple Inc has recorded high return. This is attributed to the implementation of the strategic plan that fostered for the long term demand of the customers. In addition, the management has prioritized on the organizational growth outlook. The image of the company has been remarkable in the global market.
Economic sensitivity
The economic sensitivity aspect is fundamental for the realization of Apple Inc profitability. The company has ensured it maximizes on the available resources to gain high profits. The production of the goods and service are in line with the economic objectives thus improving the country’s economy.
Investment risk factors:
Apple Inc has established a good relationship with USA economy since there are mutual objectives. The foreign government rule and policies or restriction has protected the mode of operation of Apple Inc. Therefore, it has opened more opportunities or platforms for the company to participate in the international trade. The policies have also facilitated the company’s nature of activities within the international market by abiding by the set products standards. The company is facing the investment risk from the increasing competition levels from large organizations such as Google Android and Samsung. Apple Inc is experiencing challenges situations of selling its products and services to the customers due to the availability of substitute products from the competitors. Samsung has emerged as a very competitive organization since it manufactures sophisticated devices with a user-friendly interface and operating system. The market share of Apple Inc is drastic being taken by Samsung (www.apple.com)
The risk of the introduction of the new product cycle stands out as the major risk factor of Apple Inc. The introduction of new products into the market limits apple’s product the opportunity to reach the target market. The competitiveness of the company is determined by both internal and external factors. The company management systems play a significant role in identifying potential opportunities and emerging risk factors. Therefore, the management has entitled the duties of improving or setting up better measures at the low-end alternative. It increases the company’s competitive edge and reduces the risk of being eliminated in the market.
The Smartphone market has experienced a slow growth rate in comparison to the increasing demand. The products manufacturing and components sourcing is among the risk factor to be considered to flourish in the Smartphone and other related activities. The company has produced products and service that are in line with taste and preference of the customer in order to outshine other competitors (www.apple.com)
Works Cited
"IPhone 6s." Apple. Web. 11 Mar. 2016. <http://www.apple.com/>.
