Overall, the threat of substitutes for Apple is moderate. Additional modeling tools are likely to help round out your understanding of your business and its potential. You May Also Like.
Apple can hardly do anything to mitigate this threat except to bring more products with great features. Digital media innovation and the Apple iPad: For Apple, individual bargaining power is a weak force, since the loss of any one customer represents a negligible amount of revenue for Apple.
Thus, the threat of new entry is moderate. It is evident that a simple smart phone could be viewed as a substitute to the iPhone, a simple mp3 player to the iPod, and a Samsung tablet to the iPad.
All these brands are engaged in intense competition where the loss of one can be the benefit of the other. This is to say that in the case of high-street clothing retailers the relationship tends to be controlled by retailers in which the principle of relationship theory instead of driving forces tends to be unrealistic.
Apple also has such wide-spread production that it can produce at a lower cost due to its economies of scale. The industries of its parts suppliers, such as the manufacturers of computer processors, are themselves highly competitive.
Porter argues that competition in an industry will continually drive down the rate of return generating negative influences on the profitability of firms in the entire industry.
These factors make new entrants weak. Its product development and marketing strategies reveal an awareness of the need to deal with the major marketplace forces that can impact Apple's market share and profitability.
Industry Competition The level of competition among the major companies that compete directly with Apple in the technology sector is high. Such measures also have entailed the development of different forms of loyalty rewards such as loyalty cards which are widely used by clothing retailers, Mintel International Group For starters, Apple has millions of buyers, some of which are large corporations.The five forces in the model include: 1) Threat of entry of new competitors: Apple essentially dominates the consumer electronics industry.
Apple puts a huge effort into R&D. Each and every one of the company’s products is very unique, even with respect to competitors, justifying that Apple has a very unique selling point. Weekly Chapter Assignment 6 Introduction of Porter’s Five Forces Wikipedia defines Porter’s Five Forces Analysis as a framework to analyze the level of competition within an.
Porter’s five force analysis was developed by Michael E Potter of Harvard Business School in the year It was developed as a simple framework for assessing and evaluating the competitiveness of a business establishment by analyzing the strength and position of the company.
MacBook Pro, iPad and iPhone from Apple. Apple’s Five Forces analysis (Porter’s Model) on external factors in the industry environment shows that the company must prioritize competition and the bargaining power of buyers. However due to the forces of change in external environments such as rapid technological development as well as changing customer interests and life styles it is necessary to be aware of these new features in applying the five forces model to one industry.
Competition Analysis Porter’s five forces model analyzes the five competitive forces that shape every industry: intensity of industry competition, potential of new entrants into the industry, the power of substitutes, the power of suppliers, and the power of buyers.Download