apple inc presentation-phoenix

8/8/2019 Apple Inc Presentation-Phoenix

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Apple Inc. in 2010


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Threat of

New Entrants

Threat of

New Entrants

Threat of New

Entrants

Threat of New

Entrants


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Due to increased standardization in operating system (by Microsoft) andMicroprocessors (by Intel), it is easy for any new entrant to clone and

manufacture PCs (called white boxes) with no established brand name.

Players like Dell today have shifted to negative working capital because of theirstrategy of build-to-order. This is an attractive option for new entrants.

Selling PCs directly to customers using Internet is also possible. However,existing large companies have established strong supply chains, distributionchannels, R&D, marketing, and customer support services to create moderateentry barriers.

As the PC industry in most nations is close to the maturity stage, the numberof entrants has slowed down and industry concentration increased. Theresults are lessened entry, which has led to a more concentrated industry.

Hence threat from substitutes is weak to moderate in the PC industry.


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Bargaining

Power of

Suppliers

Bargaining

Power of

Suppliers

Threat ofNew

Entrants

Threat of New

Entrants

Threat of New

Entrants


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Most of the components are highly standardized and widely available from alarge number of suppliers.

Software makers hold significant power compared to PC makers. Forinstance, Microsoft, which does not have a competitor for its Windowssoftware, dominates the industry and thus has a strong power to influence

the PC industry.

Since (CPU) is a key input, Intel has a significant market power as it isa single major supplier of microprocessor and has an 80% marketshare.

The suppliers, therefore, are often forced to slash prices or mergewith larger companies in order to survive.

Hence the bargaining power of suppliers is moderate.


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Bargaining

Power of

Buyers

Bargaining

Power of

Buyers

Threat ofNew

Entrants

Threat of New

Entrants

Threat of New

Entrants

Bargaining

Power of

Suppliers

Bargaining

Power of

Suppliers


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Hence the bargaining power of buyers can be concluded to be strong.

Large businesses, governments, and schools, which buy computers in large

volumes, have the power to bargain on price, quality and service. Personalcomputer buyers are price-sensitive.

However, buyers have less power when the switching costs and brand-loyaltiesare high. Thus, PC manufacturers can reduce a threat of buyer power by

differentiating their products.

Clone and manufacture PCs (called white boxes) sold in thesupermarket and electronic retailers at a very cheap price affected theprices of the branded computers

But, despite several ways in which manufacturers have differentiated theirproducts and found ways to increase switching costs, customers still see unitsas very similar and thus choose primarily on price.


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Threat of

Substitute

Products

Threat of

Substitute

Products

Threat ofNew

Entrants

Threat of New

Entrants

Threat of New

Entrants

Bargaining

Power of

Buyers

Bargaining

Power of

Buyers

Bargaining

Power of

Suppliers

Bargaining

Power of

Suppliers


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Hence threat from substitutes is weak tomoderate in the PC industry.

A cell phone with an Internet web browser and emailingfunction is a substitute for the PC for people who use a

computer only to use those functions.

However, the PC is still a necessity today as it has actually

taken many functions away from other products to become a

substitute for products such as the TV, newspaper, magazine,

book, videogame, CD player, DVD player, photo album,

calculator, word- processor, telephone, fax machine, and soon. However substitutes for computers do not have as many

functions as a PC and are not close in performance.

Fax machines in place of overnight mail deliveryFax machines in place of overnight mail delivery


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Threat of

Substitute

Products

Threat of

Substitute

Products

Threat of

New EntrantsThreat of New

Entrants

Threat of New

Entrants

RivalryAmong

Competing Firms in

Industry

RivalryAmong

Competing Firms in

Industry

Bargaining

Power of

Buyers

Bargaining

Power of

Buyers

Bargaining

Power of

Suppliers

Bargaining

Power of

Suppliers


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The five main manufacturers namely Acer, Dell, HP, Apple and Lenovo are

in competition to produce the least-expensive and most efficient machine.

As the PC has become a more commodity-like product, price-competition

has become severe in the industry. The price of PCs has declined since

1990s. Cost-cutting is now critical for PC producers to cover the

decreasing profit margin.

Some companies such as HP and Apple focus more on innovation while

others such as Dell focus on distribution channel and service, which creates

differentiation to some extent.Since the quality of a PC is largely determined by the microprocessor and

application system installed, the profitability and prosperity of the PC

industrys is dependent of the profitability and prosperity of these

suppliers.


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Another important aspect of competitive advantage is globalization. Many;PC makers in the US now earn around 40% of their revenues in international

markets. Although PC markets in the US, Europe, and China have matured

and the demand has slowed down, demand in Asia-Pacific and China is

expected to grow.

As the PC has become a more commodity-like product, price-competition

has become severe in the industry. The price of PCs has declined since1990s. Cost-cutting is now critical for PC producers to cover the decreasing

profit margin.

The effects of intense competition are beginning to be felt as companies exit

via selling to other companies or simply exiting the industry altogether. Acer

and Lenovo both benefited from acquisitions of high-profile PC brands.

Regardless of the number of companies present, the computer industry will continue

to expand and remain competitive for a number of years to come. Hence the threat

to industry rivalry can be concluded to be strong.


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Design Appeal.

Apples focus on Innovation.

Integrated approach with software,

hardware and service.

Ease of use.

Strong brand and brand Loyalty.

Strategic Marketing. Steve Jobs


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Status appeal

Innovative applications Advanced technology

First mover in full touch screen phones

Revolution of Smart-Phone concept

Average selling price of 562$ (30% more thancompetitors)

Huge commercial success (third position

behind Nokia and RIM)


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The common theme with apple is innovation andsuccess. Apple is not afraid to be bold and try new things.Through their failures they have learned, gainedperspective, and have taken on the next challenge with the

skill and experience of a seasoned artist. Apple hassurvived hard times before and has brought itself backfrom the brink of oblivion to become a company that noone can imitate. The portfolio of achievements that Apple

has amassed is prodigious and virtually unattainable formost companies. As long as the company keeps an openmind towards new products and services with a healthyinnovation, there is no reason why they cannot continueprosperity for the foreseeable future.


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http://planningskills.com/askdan/13.php

http://tech.yahoo.com/blogs/yoon/278

http://www.appleinsider.com/articles/07/07/18/apples_u_s_mac_market_share_rises_to_5_6_percent_in_q2.html

http://www.canalys.com/about/index.htm

http://www.chinapost.com.tw/business/americas/2008/02/28/144868/Nokia-Samsung.htm

http://www.conference-board.org/economics/ConsumerConfidence.cfm

http://www.ethicalcorp.com/content.asp?ContentID=5485&ContTypeID=46

http://www.greenpeace.org/usa/news/iphone-s-hazardous-chemicals

http://www.guardian.co.uk/business/feedarticle/7993658http://www.reghardware.co.uk/2008/01/24/sa_q4_phone_figures/

http://www.intomobile.com/2008/11/09/apple-takes-2nd-in-smartphone-market-share-but-q4-looking-good-for-rim.html

http://www.mobileburn.com/news.jsp?Id=5572

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