BUSMHR 4490: Spring 2015
Apple Inc. in 2012 Case
To: Bruce Bellner
From: Group E
Subject: Apple Inc. in 2012 Case
Date: February 5, 2015
In today’s world, personal computers are a commonplace in most homes, but this this wasn’t always so. The first personal computer was developed just 40 years ago in 1975, so the industry is still a very young one. Despite its youth, the industry has evolved dramatically over time as new technologies develop. So, too, has Apple, Inc. developed and evolved over time. This constant development and evolution that has allowed Apple, Inc. to not only survive, but to thrive, in an industry that has seen so…show more content…
Threat of new entry into the marketplace is relatively low due to the dominance of these five and the high cost of capital a new firm would face in entering the marketplace. As it stands, new information and developments made in the PC industry are typically closely watched for by the five major competitors, and attempts are made to buy out any small innovative firms.
The difficulty of new entry into the industry has led to a lessened entry and a higher concentration within the industry.
Threat of Substitute Products or Services
The threat of substitute products or services has grown within the PC industry as mobile phones and tablets have evolved. A substitute is anything that replaces the personal computer, and for those who only use their PC to surf the web, email, play games, etc. may find they can do that as well, or better, on their mobile phone or tablet.
PC manufacturers have taken steps to combat the threat of substitute products or services by developing their own tablets.
Bargaining Power of Buyers
Those who buy their PCs in large quantities, such as businesses or schools, may enjoy bargaining power in the industry. Typically though, buyers have very little bargaining power in today’s industry due to the high level of product differentiation that exists. Switching costs remain high and brand loyalty is significant in the industry do to this differentiation, so the