Apple (Computer) Inc. Whither the MAC? | Case Study Analysis | Strategic Analysis in terms of Capabilities Analysis & Five Force Model |
Submitted by : Muhammad Saad Dasti Section B |
1. Prepare a Five Forces Analysis of the personal computer industry. (Think of your traditional Windows based PC.) How attractive is this industry?
In order to properly identify and evaluate competitive position of personal computer , competitive analaysis model has been created to fully depict the position of display systems according to current scenario
* The personal computer industry is somewhat vulnerable
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If a firm is following a high quality strategy then it can be expected that their prices will generally be higher to reflect the higher prices they are paying their suppliers. For example, the operating system in Apple’s Mac Book Pro, known as the OS X, is considered to be one of the best in the industry and their prices reflect this.
In terms of service suppliers, the service that can be offered within the personal PC industry include internet, tech support and repair services. These suppliers focus highly on operational performance and relational performance in order to increase customer satisfaction. They also offer a variety of customer loyalty programs in attempts to lock in and expand their customer base while trying to gain the competitive edge over competitors within the service industry of personal computers.
* The threat of new entrants in the personal computer industry is very weak. Currently the market is dominated by five major competitors which have nearly all of the market share, this will likely discourage any potential new companies from entering the market. A huge barrier to entry is also that the market requires significant investments to be made in research and development to continually develop innovative products as well as large fixed start-up costs for manufacturing and
9. Imagine that you are buying a new computer and comparing different brands and prices. Describe at least two nonprice competition factors you might consider when making your decision. (2-4 sentences. 2.0 points)
By making their products differentiated from the competition, Apple can establish their own price. Apple believes that people will pay some more money if they know that what they are buying is better and more reliable. That is also the reason why Apple sells the same products all over the world, making no selection or differentiation depending on where the market takes place. The high costs of Apple’s products are the one of the reasons why Apple Inc. preferred to be
Apple products are highly priced as they make use of high quality resources during production.
Teams were able to introduce a new line of microcomputers in four different regions. All five teams were entering the market at the same time and they started with exactly the same amount of resources and knowledge of the market. There were three business segments in PC market. The higher priced Mercedes segment, included high performance computer for use in engineering and manufacturing applications. The medium priced, largest group of customers was the Workhorse segment, which was based on easy to use PC. The Traveler segment included practical computer to use while traveling and their customers were price sensitive. In quarter one, the teams were to establish their firm and set up their shop. Following, in quarter two, the teams dived in to test the market. In quarter three, the teams had to make some changes and decided on market expansion. In quarter four, they made choices to invest in the future. In quarter five, they had to expand their business strategies. In quarter six, they were able to adjust their firm’s strategies, tactics, study the market, review financials, evaluation production data if it was
This paper will discuss a company called Apple computers. It will further access the market forces and strategies used by apple.
Computers R’Us is facing the strong competition from the industry players and within the changing business environment, it is important to conduct the required research to identify the emerging trends from the marketplace. This report looks into the different options of available market information facing by Computers R’Us.
In the next section we will analyze the level of competition within memory industry based on Porter’s model, Samsung's competitive advantage and its sustainability considering the current market situation. 3. Analysis: Considering Porter’s model as a framework to analyze the level of competition within DRAM memory business, the threat of new entrant is high compared to the threat of substitutes and established rivals in horizontal competition. If we look at rivalry within the DRAM industry between established players, Samsung has a clear advantage over its competitors. Samsung is the market leader in DRAM memory business. It has a wide range of products and its products has a higher brand value. Threat of new entrants is high as Chinese competitors have easier access to large pool of local engineering talent and have a growing market for these DRAM chips. The government is also providing all sorts of assistance, like subsidized land, for the initial setup. Samsung has several options to deter the entry of new Chinese competitors. One option Samsung have is to continue to explore and increase market shares of flash memory markets which is a new and growing market. Samsung can also take advantage by lowering the price of DRAM chips. This would force a price war and drive new
The large capital requirements to enter the computer industry combined with established brand identities of the current incumbents make barriers to entry high, not to mention the economies of scale and distribution channels that incumbents enjoy which make entry barriers even higher. The current PC incumbents enjoy demand-side benefit of scale in the business sector where PC buyers prefer to buy products from large trusted companies, raising the level of entry barriers.
The PC industry is highly competitive and constantly changing as technology evolves and customer needs change. Some of the top competitors in the PC industry are IBM, Hewlett-Packard, Dell and Apple. Theses rivals are constantly jockeying for the top competitor’s position. They compete in prices, product innovation, advertising, etc.
As indicated in the table above, Dell and HP are the strongest players in the computer industry. These results are also supported by the market share statistics presented in case Exhibit 3. Conversely, the table above indicates Acer as the industry’s weakest rival in part because it focuses on producing low priced computers,
And these analyses will be done with the help of Porter’s 5 forces (see appendix 1, 2, 3). This analysing toll deals with issues which are from outside the industry that impacts the nature of competition within the certain industry. Thurlby, (1998) stated “Understanding the nature of each of these forces gives organisations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market”1. The analysis of the three industry are given belowPC industry (See appendix 1) This competition within the PC industry is extraordinarily high consisting with top companies like Dell, HP, Apple, Gateway and Sony. In order to gain competitive advantage, the key factors are advancement in technology, custom built PCs, reliability and standard customer service. The life cycle of PC industry can be seen as mature (See appendix 6); however the growth of PC’s has not decline. The reason is due to the globalisation trends taking place within the major firms. The barriers very high where there are already five main firms that dominate the market. Therefore, the chances of new PC companies entering the market and get significant hold of market share is very slender. The main two factors that are making the entry level high are mainly cost and distribution and the top five firms also control 70 per cent of the global personal computer market. Another factor may be is that
Diversity in products and their prices helps Apple remain an inelastic company, regarding their demand. If a price rises for one of their products, there is sure to be another product that moves into that previous product’s price range that is still comparable in design and quality. There will always be people to buy the more expensive items not only because of Apple’s positive brand recognition and loyalty, but because Apple consistently produces quality and innovative products; including, if Apple finds a defect or fault, they fix the problem for free or replace the product altogether.
PC industry is characterized by fast declining ASP year over year. Together with the increasing component costs from 2009, both Dell and HP are facing squeezing profit margins (HP 2010; Dell 2010). In the first quarter of 2011, HP’s gross margin for its Personal System Group (PSG) is as low as 6.4% (Epstein 2011). Similarly, Dell’s gross margin of PCs is often 3 to 5% (Wang 2010). This indicates that if both
After a half circle of product life cycle Apple refreshes its offer with new features and decreases the price of the previous offer. Thus the market skimming has become the strategy and thus practicing market leadership in product-quality will cover the high cost and R&D. Thus the each year apple enthusiasts are getting the higher value of high quality and advanced features in the closely same price which actually comprises everyday less-price as well.
The domestic market is the field which grows fast, whether the desktop or laptop, the growth rate of domestic markets in the commercial market is faster. The consumer notebook market (individual purchase market) is showing explosive growth. The market share of Dell in foreign increased gradually while the market share of domestic