Industry Analysis: Apple Computers Essay

Rivalry Among Existing Competitors: Although the number of PC manufacturers has increased since the 1980s, there still remain only a few dominant players who fight hard for market share. Many firms have chosen to compete in price, but Apple has competed with innovation. This is shown in Apple’s high R&D/Sales ratio in Exhibit 5, which routinely trumps that of Dell and HP. This is a mostly negative dynamic for Apple, because even though they spend more, they can’t charge significantly more on this price sensitive product.

In order to truly understand how Apple operates and what products they offer to consumers in the personal electronics in comparison to other companies in the market. There are many players in the personal electronics industry and Apple is 3rd place for market share capturing 11.1% of the US PC market share. HP is the leading player in the US market accounting for 26.1% share of the market, Dell accounts for 22.3%, Toshiba falls behind Apple with 9.3% of the market share.

Apple Analysis Executive Summary In week 8 of AMBA 640, we will be analyzing the Apple case located in chapter one of Management Information Systems: Business Driven MIS Inc from an information systems management perspective. Our analysis will look at some of the common tools used to analyze competitive intelligence such as Porter’s Five Forces Model, the three generic strategies for choosing a business focus and the value chain analysis. We will also discuss why and how data, information, business intelligence and knowledge are important to Apple. This analysis will also include how Apple identified areas where it achieved a competitive advantage using management information systems and why competitive advantages are temporary.

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.

Apple Inc. in 2012 [Group] Case Study Prepared By: Aman Chahal Edward Abeleven Ruchi Badhwar Steven Mathews Uttara Jadhav Students of: Marketing Management 6215 California State University – East Bay Prepared For: Lan Wu Professor of: Marketing Management 6215 California State University – East Bay October 11, 2012 Table of Contents Introducing Marketing and Apple Inc..........................................................................1 Understanding The Micro Marketing Environment.....................................................2 For Apple’s Mac Computers Apple’s Sustainability Position in Competitive PC Market.........................................5 Apple’s Sustainability The Micro marketing environment plays an important and crucial role in Mac’s line of success.

The multi billion-dollar corporation, Apple Inc., designs and manufactures some of today’s highest technological gizmos and gadgets. Among their best known products are the Apple and Macintosh computers, iPods, iTunes, iPhones and iPads. Apple is one of the most powerful and influential high tech companies in the world. The success of Apple Inc. stems from the innovation and visions of co-founder and entrepreneur, Steve Jobs, the excellence of the stylish, user-friendly products, and the ability to create innovative products that consumer’s desire.

Introduction Apple is one of the world 's top user electronics and personal computer companies. The Cupertino, California-based Company was founded in 1977 as Apple Computer Inc. It dropped the "Computer" from its name in early 2007. Apple 's present place in the international market place is a faraway cry from its humble starts, by Steve Jobs, Steve Wozniak and Ronald Wayne marketing hand-made private computer tools in the late '70s. Company continual to focus on individual computers for the next decades, but in recent years that focus has lifted more to customer electronics such as the Ipod, iPad and iPhone. But, Apple moreover sells a range of associated software, services and applications, with certain of the best prominent non-electronics goods being the iCloud, iOS, Mac OS and Apple TV. The company has great work knowledge. According to its authorized website, there are 3 main sorts of jobs offered for staffs. They are business, retail warehouse and students and college graduates. Jobs are broken down to humble and separate duties then every worker will be tasked based on their talents for example, hardware and software engineering, selling store manager and on-campus representative. But, even their jobs are broken down definitely to employees’ talent.

I. Industry Environment The industry environment is the set of factors that directly influences a firm and its competitive actions and competitive responses: the threat of new entrants, the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competitors (Hit, Ireland, and Hoskisson, p.40). In this case, Apple is just one of the many competitors in a saturated markets offering both hardware and software for personal computer systems. Intense players such as, HP/Compaq, Dell, Gateway, and Microsoft all take substantial market share in the industries Apple is competing with. Today in the computer hardware industry there is intense competition and the only way to gain market

Introduction The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996 (Kim & Yoffie, 2010, p.1). This can be explained that

* Microsoft and PCs have larger presence in the business market than Apple's computer systems.

1.Is Apple’s strategy evolving? Yes. Apple started out a very small company just like any other. In its early years they were some of the leaders of innovation in their industry however, they were behind the competition in many of the early stages of their life. They were responsible for things such as the first color display, and the user-friendly graphical user interface. Apple followed a broad differentiation strategy. This allowed them to compete in a wider market of products while keeping loyal customers due to their variety of specialization of their products. In the early 1980's, Apple was focused on personal computers. Other devices such as notebooks, and tablet computers, which didn't become powerful enough to be popular

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

Porter's Five Forces can be applied to particular companies, market segments and industries with the step-by-step analysis of market structure and competitive situation. First of all, when implementing this module in organizations, it is necessary to determine the scope of the market to be analyzed. Following, all relevant forces for this market analyzed and key forces are identified (Gerry and Kevan, P.117). Actually some organizational strategy and the longer-term goals are mainly based on or consistent with the key forces. Hence, it is not necessary to analyze all elements of all competitive forces with the same depth. Moreover, the key forces in the competitive environment will vary in different industry. Different forces take on prominence in shaping competition in each industry (Porter,

Apple Inc. has launched its iPhone in January 2007 (telegraph) as a new product in the market with latest technology and it was the first multi touch smartphone adding the feature of iPod and received an overwhelmed response by selling 270000 units. It had created a new record for a new company like apple, iPhone had laid a stepping stone for the success of Apple and till this time iPhone is the best seller product of Apple Inc. during first quarter of 2016 apple has sold over 74 million iPhones worldwide. (statista, 2016).

Therefore, the existence of substitutes have the potential to reduce the future growth of the brand. -Rivalry within the PC industry Apple is facing very tough rivalry. Competing brands involve in price wars. Customers have different needs and wants. No specific market segment is strong enough to justify price premium. Buyers have increasing knowledge about the product. Overview of the industry The PC industry has powerful buyers, vicious rivalry, intense threat from the new entrants, some strong suppliers who harvest most of the industry’s residual profits. Overall, the PC industry is not an attractive business. Analyze the internal environment of the firm For companies to build competitive advantage, they need to examine the entire value system. What really delivers value in Apple? The following analysis will adopt the Resource-Based View. Specifically, Apple Inc. is an effective manufacture and designer of consumer electronics and closely related software product. The tangible resources of Apple may include its flagship products, the current customer base, the company’s current distribution systems, etc. For example, Apple leads the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, iLife and its range of professional applications. Apple also spearheads the digital music revolution with its iPod portable music players and iTunes online music store. The intangible resources of Apple may be the