Apple Porter's Five Forces Essay

The bargaining power of the supplier is affected by the rise in investment avenues, provider of funds, interest rate and the economic outlook.

Porter’s five forces model seeks to portray how attractive an industry is in relation to the five competitive forces which includes, threat of substitutes, threat of entry, bargaining power of customers, intensity of competitive rivalry and bargaining power of suppliers.

Porter's Five Forces is a simple but powerful tool that consist of 5 different forces to understand the competitiveness of your business environment, and for identifying your strategy's potential profitability. The five forces are degree of rivalry, threat of entry, threat of substitutions, buyer power, and supplier power. Each force is helpful in their own way to get to know your rivals a lot better and get to know what can happen in your market.

Porter’s five-force model identified five forces which would impact on an organization’s behavior in a competitive market and access the external threats and identifies the opportunities to achieve competitive advantage. The five forces include:

Porter’s Five Forces Model is one of the best-known analysis tool to see the level of competition a company has with its competitors. Chick-fil-A is a strong company and has been around for a long time. Chick-fil-A still has a huge competition in the fast food market. This being the case the company has to analyze the whole market. The threat of entrants is always

Michael Porter's Five Forces analyze the external and internal environment of a company to increase the awareness of threats and structure of the industry that company competes within. Thus, the Five Forces is an ideal tool which can help companies to maintain their competitiveness with a higher profitability.

Porter 's five forces analysis is a framework for industry analysis and business strategy, consisting of five rules: Threat of new competition, Threat of substitute products or services, Bargaining power of buyers, Bargaining power of suppliers, and Intensity of competitive rivalry. By apply this model to the Apple company, we may know if the competition in this field is vigorous or not, and if Apple is safe in terms of being an attractive industries or not.

You know that Michael Porter’s Five Forces Model is a useful tool for analyzing a business. The Model is used to help understand the importance of the five competitive forces and determinea strategy to develop and maintain a competitive advantage. The Five Forces are described and discussed in Chapter 1 of the textbook. They are:

The Five Forces Model (developed by Dr. Michael Porter of Harvard University) is a powerful tool for evaluating the competitiveness of your business environment and for identifying your business‘s potential risks and profitability.

The power of suppliers. Suppliers are those who supply the organisations what they need in order to produce the products or provide specific services. Except for raw materials amd equipment, it includes labour and finance. The factors that may increase supplier power are, obviously, opposite to those that, generally, increase the power of buyers. Suppliers may have more power if: they are in concentrated numbers compared to buyers; there are high switching costs associated with a move to another supplier; they are able to integrate forward or begin producing the product themselves; they have specific expertise or technology needed to manufacture goods; their product is highly differentiated; there are many buyers and none make up significant portions of sales; there are no substitutes available; there are strong end users who can exert power over the organization in favour of a supplier (This can be the case in labour situations). [Marc. (2014). Bargaining Power Of Suppliers | Porter’s Five Forces Model. Available: http://www.entrepreneurial-insights.com/bargaining-power-of-suppliers-porters-five-forces/] Well-known examples of strong suppliers are: DeBeers – dominates the diamond market; Microsoft – practically dominates the market for personal computer operating systems; Intel & AMD – dominate the market for processor chips; Cargill & Monsanto – dominate the agricultural seed production market. Whilst some industries do have dominant suppliers this is not the case for all. In industries where the product is standardized you are likely to find a large number of competitive suppliers. The food processing industry is a good example of this because agricultural produce can be bought from a variety of suppliers, both large and small. This is the same for any market involving commodity products. [(2003). Bargaining Power of Suppliers. Available:

Porter 's Five Forces Model is a critical instrument to break down an outer aggressive environment of the business. The model incorporates threat of entry, the threat of rivalry, the threat of suppliers, the threat of purchasers and threat of substitutes.

According to Akbar and Inggriantara, 2012, p. 392, Supplier’s power is about how the supplier increases the prices of their products. Normally, the suppliers will have the power to increase the price when the switching costs of the products were high, the distinctiveness and inimitability of the products as well as the importance of the customer to the company and so on.

The Porter Five forces analysis helps the marketer to contrast a competitive environment. Porter’s five forces model is comprised of following five completive forces:

The Porter`s five forces are threats of new entrants, the bargaining power of buyers ,product substitution and intensity of rival of rival among competitors .These forces measure the competitiveness of the market and also helps the company to identify strategies to use to penetrate such and gain market share.

Porter’s five forces are used to determine the competitive intensity and attractiveness of a market. These are close forces that affect a company’s ability to make a profit and serve customers. If any of these forces change, a company must reassess its marketplace. The five forces include: the threat of substitute products, the threat of the entry of new competitors, the intensity of competitive rivalry, the bargaining power of customers and the bargaining power of suppliers.