homework-1 apple inc industry ana
TRANSCRIPT
Apple Inc.: STEEP & Industry Analysis
Abstract
“The essence of formulating competitive strategy is relating a company to its
environment” (Porter, M. E.: Competitive Strategy, p.3). Thus in order to assess and develop
strategic plan of a company, and its pertinence and potential for success, we must not only
recognize the dynamics of the industry in which the company competes but also understand the
associated forces and variables which are linked to the company. Thus this study is an approach
to present the in-depth analysis of how environmental variables and industry forces impact Apple
Inc.
Apple Inc.: STEEP & Industry Analysis
Introduction and Brief History
Apple Inc. originally known as Apple Computer Inc. was founded in April 1976 by Steve
Jobs and Stephen Wozniack (Hitt, Ireland, and Hoskisson, 2011). Fast forward from 1976 to
2013, today Apple is a renowned tech giant with market capitalization of $413.06 billion as of
Jan, 2013 with roughly 72,000 employees and 394 retail stores globally (Wikipedia, NASDAQ
2013). Headquartered in Cupertino, California Apple is well known for designs and
manufacturing of its computer hardware, software (Mac line of products), the iPhone, the iPad
and other electronic products. The firm revolutionized the music industry with the introduction
of its iPod in the year 2001 and launched its iTunes store. Apple’s innate ability to introduce
innovative technological products has allowed the company to carve out a core group of buyers
that rush to purchase each of its new products and the updated version of each of those products.
Finally, the company is well recognized as a leader in the ever-changing technology industry.
Therefore, it is worthwhile to look at its past in order to understand how the company got to
where it is today.
Initially Steve Jobs, Stephen Wozniack and Ronald Wayne started running the company’s
operations to sell personal computer kit. The leaders intended to develop the computer for
hobbyists and company’s first model “Apple 1” came out on July 1st 1976. The model was
referred as the “kit computer” as the circuit board and other components were fully exposed
(Hitt, Ireland, and Hoskisson, 2011, p. 188). Regardless of data suggesting that hobbyists held
Apple Inc.: STEEP & Industry Analysis
mixed responses to their first computer model, Jobs and Wozniack decided to keep expanding.
While Wayne sold his 10% part of the company to Steve Jobs and Stephen Wozniak in 1977, the
two founders continued their plan of expansion with additional partners and further developed its
line of computers. This led to a second generation of computers called the Apple II. Succeeding
its recapitalization and launch of a second generation of computers, Apple Computer Inc.
decided to go public in 1980, which resulted in rapid growth in its size. As a result of Apple’s
quick growth it “...faced some experienced competition” from companies like IBM who had
recently launched the world’s first personal computer (Hitt, Ireland, and Hoskisson, 2011, p.
189). In an effort to keep up with competitors such as IBM and Microsoft, Steve Jobs brought
John Sculley who was former CEO of Pepsi-Cola on board. The challenge was that Jobs and
Sculley each wanted to see Apple succeed but they had very different visions for the future. Thus
the situation led both of them to “...disagree over the direction they wanted the company to take,”
and ultimately led Jobs to leave Apple (Hitt, Ireland, and Hoskisson, 2011, p. 190). After
resigning from Apple Steve Jobs was busy growing his new business NeXT computers, while
leaders at Apple struggled to negotiate a contract to ensure Windows could not use its Graphical
User Interface (GUI) technology (Hitt, Ireland, and Hoskisson, 2011). Thus, when leaders at
Microsoft secured the GUI interface design, they advanced to develop universal software, which
brought Apple further behind the competition. Therefore, the company’s one last effort was to
reorganize. The firm’s reorganization brought back Jobs, and utilized what Jobs had been
developing through his NeXT company for its new operating system (Hitt, Ireland, and
Hoskisson, 2011).
The firm leaders’ decision to bring back Steve Jobs is what ultimately helped to revitalize
the firm. A year after Job’s return Apple successfully launched its iMac in 1998 and sold about
Apple Inc.: STEEP & Industry Analysis
800,000 units (Wikipedia, 2013). In 2001 Apple not only revamped its Mac OS X but also
introduced iPod later the same year which was a brilliant timed move. Job’s had a unique ability
to see how consumer’s digital lifestyles were changing, and how Apple would have to change
with them. For Apple this meant that it would have to not only develop a broad range of
products, but they would have to develop marketing strategies to create a positive brand image
among a range consumers beyond the firm’s original “tech savvy fanatics” (Hitt, Ireland, and
Hoskisson, 2011, p. 200). To reach out to a number of different consumers, the firm introduced
storefronts, an online music store, and user-friendly devices. In Figure-1 (Reuters, 2011), the
timeline of major apple releases and the share price trend is shown. From the figure it can be
clearly observed that introduction of powerbook, iPod, Macbook, iPad and iPhone significantly
contributed to the growth of the company.
Figure-1: Share Prices and Key Apple Product Releases
Apple Inc.: STEEP & Industry Analysis
Though Apple Inc. has set itself at the top of many consumer electronic markets
such as smartphones, tablet computers, and media streaming devices, the company’s future
success will be subjected to its ability to reach out to a range of consumers, while also being
competent to stay on top of changes in the entertainment and technology industries. Thus Apple
needs to not only focus its attention on major competitors, it also needs to be vigilant of startup
companies that may enter the market and shake it up, and substitutes that may threaten to replace
Apple’s products altogether.
The next few sections will present the in-depth analysis of how environmental variables
and industry forces impact Apple Inc.
STEEP Analysis
STEEP analysis stands for social, technological, economic, ecological and political
analysis and is concerned with the environmental influences on any industry. Thus, this STEEP
analysis will help us in determining the current situation of Apple Inc., identifying the
environmental influences and glimpsing into the future of Apple Inc.
Sociocultural
Within the business world companies need to differentiate their selves from competition
by analyzing the culture in which they do business. In the Apple Company, sociocultural analysis
is an important because Apple is an international company distinguishing itself from other
corporate companies. There are a wide variety of sociocultural aspects Apple needs to evaluate
prior to entering a market which include level of education, lifestyle changes, and consumer
activism.
Apple Inc.: STEEP & Industry Analysis
Level of education is a very important sociocultural aspect for the Apple Company. It
needs to be evaluated because if people weren’t educated within the markets they enter into they
wouldn’t be successful. This can be supported by the way Apple Company influenced the
multimedia takes over the educational realm (O’Toole, 2007). If Apple Company didn’t evaluate
the education level prior to entering markets with the Podcasts then it wouldn’t be as successful
as it did (O'Toole, 2007). For example, in the United States Air Force, we use Podcast to allow
people to get information fast and at their convenience for their everyday work. Another good
example with level of education is the need for acceptance of the technology into the represented
market. Geist (2001) further supports this idea by stating a lot of students and people within
business used iPads and other Apple products/services to accomplish their daily class or work
load. For example, when going to school for an undergraduate degree many Apple devices are
available for student use and when Apple dissects the level of education the data of this type of
culture is important.
Another avenue that should be analyzed by Apple is “lifestyle changes” which looks at
the types of the lives people within the markets have. In an article by Sako (2011) he explains
that Apple ensured lifestyle changes by providing good global supply in order to satisfy the end
user with the product. The reason this affects the lifestyle changes is that if certain products or
services don’t get to the consumer in a certain timeframe then customers will go elsewhere for
business (Sako, 2011). That is why Apple does a good job of evaluating the lifestyles of
markets. In addition, the technology can change aspects of lifestyle as Sako explains because not
everyone is going to understand the material without a learning curve even if technology savvy.
For example, older generation don’t adapt to lifestyle changes as opposed to the new generation.
New technology puts more pressure on the older demographic and they often reject using it. This
Apple Inc.: STEEP & Industry Analysis
is something Apple will have to evaluate in each culture, so there is no backlash.
Another aspect that Apple Company needs to realize is the consumer activism. One
activist fight that Apple Company has faced is the labor conditions in making their products at
Foxconn Industry in China (Chan, 2011). This has been a controversy within its business and
has been addressed within the Apple Company and they have taken appropriate measures to
resolve this issue (Chan, 2011). It has been published that the Apple Company has created a
team to continue monitoring on the Foxconn Industry in China to ensure that this issue doesn’t
resurface (Frost & Burnett, 2007). This will teach and provide the right way that Apple should
do business domestically or internationally (Frost & Burnett, 2007). The bottom line is that
sociocultural aspects are important in the analysis of Apple Company for them to enter new
markets.
Technological
Apple is an industry leader in a realm that changes very rapidly and is fundamentally
rooted in disruptive technologies. The main components of the technological environment that
Apple must deal with, currently includes the mobile device application (app) market, personal
tablet computers, mobile smartphones and competitive patent battles. These technologies are
driving the mobile app market to nearly 18 billion app downloads in 2011, compared with nearly
roughly 8 billion in 2010 (Anthes, 2011). This rapidly changing landscape requires Apple to be
particularly good at predicting trends or starting them. The consumer of technological products
is acutely aware that technology is increasing at an accelerating rate and therefore customer
brand loyalty over the long term is incredibly challenging for a tech company to achieve.
The app market has seen considerable year over year growth since its inception. It is
Apple Inc.: STEEP & Industry Analysis
projected that there will be 185 billion app downloads in 2014 (Anthes, 2010). According to Zuk
(2010), half of adult mobile phone users have apps on their phones and many of these apps are
news and weather related. This shows that all demographics are involved in the mobile app
movement and that apps are being tailored to every type of person. The mobile app market
should continue to grow into the foreseeable future as more and more people adopt smartphone
technology. To maintain a lead in the app market that generated developers 15 billion dollars in
revenue in 2011, Apple needs to continue to gain market share in the devices that utilize these
apps (Anthes, 2011).
The most recent disruptive technology that Apple has introduced is the personal
tablet. The iPad has seen astonishing increases in sales since its inception. Tablet sales
increased nearly 300% from 2010 to 2011, with total tablet sales in 2011 approaching 30 million
(Gartner, 2011). Almost every major electronics manufacturer has introduced a tablet, thus,
driving up the competition to fierce levels that ultimately benefit the end user. The tablet has
transformed the media’s method of delivering publications to the reader. The introduction of the
tablet has moved users away from paper media and over to digital media in nearly every arena.
Although Apple introduced the first successful tablet, they must continue to innovate the product
and attract users from all parts of society across the world to remain a viable player in the tablet
market.
Apple has proven over the last 6 years, since the introduction of the iPhone, that is has
the capacity to break into a market and disrupt it completely. In the first 3 months of the iPad
being on the market, Apple sold over 3 million units (Murphy, 2011). Apple is definitely not
alone in the growing market though. With this type of growth forecast, Apple needs to
Apple Inc.: STEEP & Industry Analysis
accelerate its innovation to stay competitive. The Asian market is a huge growth sector that
grew nearly 20% in terms of IT end-user spending between 2010 and 2011 (Gartner, 2011). If
Apple can continue to innovate and produce devices that differentiate themselves from a market
flooded with rapidly introduced products, then they can capitalize on the 50% increase in sales of
tablets worldwide projected through 2015 (Gartner, 2011).
One of the great challenges of the market that Apple is involved in revolves
around the ever growing patent market. The introduction of a new technology or feature on a
device without a patent can be devastating to a company. Many small companies release
technologies or products and don’t realize that multi-billion dollar corporations already hold
patents on functions or features of their devices. This is not only a problem for small companies;
large companies are currently having patent battles that are costing them millions of dollars.
Apple and Samsung settled a 2 year patent dispute in 2011 while at the same time Apple sued
HTC for iPhone patent infringements (Gobble, 2011). To put it in perspective, a Google chief
legal officer described how a smartphone could engage upwards of 250,000 patents (Gobble,
2011). These technologically challenging environments are only going to grow more complex in
the future as more companies enter the market and new technologies emerge.
The emerging technology of smartphones and tablets is an indicator that there is certain to
be more and more disruptive technologies in the future. There is sure to be another technological
device that will put the current leading companies on the defense, just like Apple did with the
iPhone. Apple’s challenge for the future will be to either create that technology themselves, or
recognize its emergence, and brand their own version of whatever the next big thing is.
Economic
The technological industry that Apple is a part of is an interesting subset of the economy.
Apple Inc.: STEEP & Industry Analysis
Although consumers around the world are faced with troubling economic times, their spending
habits in consumer electronics have lead to a boom in spending in the mobile phone, app and
tablet markets. The nearly 3 million iPads sold in the first three months of its rollout was proof
that even in hard times, people are willing to spend money on electronics (Murphy, 2011). Even
during a recession, people are putting money into tablets and causing a projected 300% increase
in the amount of tablets purchased per year around the world in 2015 compared to 2012(Gartner,
2011). The main focus for Apple, in terms of the economic environment, is how do they
effectively leverage their market share in existing markets and expand into emerging markets
such as Asia given the reduced buying purchasing power of the world.
Even in the recession, the spending on IT products in the Asian-Pacific market was
nearly 650 billion dollars in 2011 as compared to roughly 590 billion in 2010 (Gartner, 2011).
This driver of innovation and competition in the Asian-Pacific reason should not force Apple to
ignore the fact that the economic situation of the world causes certain behaviors in consumers.
Research shows that companies with an increased market share can fare better in poor economic
times than smaller companies because the consumer perception is that the large market share
company will be around longer and therefore is selling reliable products. This leads to a
disproportionately positive effect of advertising from higher market share companies giving
them a competitive advantage. (Srinivasan, Lilien, & Sridhar, 2011). Consumers will even spend
more to buy products from well-known companies when times are tough because they value
where there scarce money is going (Griskevicius, Millet, 2011). Apple is navigating a
worldwide economic downturn by recognizing that the spending habits of individuals aren’t
always completely rationale. Knowing how different demographics react to constrained
resources is something that Apple can use to its advantage given the current economic
Apple Inc.: STEEP & Industry Analysis
environment. According to Griskevicius and Millet (2011), “economic uncertainty led people
who had higher socioeconomic status childhoods to want to save money for the future and not go
into debt. Conversely, economic uncertainly cues led people who had lower socioeconomic
childhoods to decrease savings and increase desire to borrow money for immediate
expenditures” (p. 10).
All of these factors that lay out a complex economic environment may be summed up
with a quote from some research about human behavior in times of crisis. According to
Griskevicius and Millet (2011), “the psychological research suggests that a natural reaction to
cope with the self-threatening consequences of an economic crisis is in the increase in the need
to be connected with others. When people feel threatened they seek the support of others” (p. 9).
The steady decline of prices in consumer electronics, as well as the increased in the ability for
people to become more and more connected to family and friends around the world may be
helping drive this economic environment for Apple and other tech companies. People are making
less money, but they are always willing to spend money on things that keep them connected to
other people.
Ecological
The average consumer of technological goods is becoming increasingly aware of how the
production, use and disposal of their products affect the environment. In the technological
industry, many harmful substances are used both in the production and use of the products.
Although government regulation has a large part to play in the ecological domain, customer
perception is a substantial driver for corporations to adopt sustainable and documented
environmental practices. This is the reason that in the Ecological portion of the environmental
Apple Inc.: STEEP & Industry Analysis
analysis, the public clientele’s perceptions should be the primary focus over government
regulations.
Pressure from the consumer has forced Apple and the tech industry to make great strides
in becoming more sustainable and transparent. Apple recently committed to creating their entire
line of products without lead, arsenic, mercury, or brominated flame-retardants (Creel, 2010).
In addition, Creel (2010), stated that, “the company’s new line of computers is made with 50%
less material than the first generation of iMacs, the Mac mini uses one sixth the power of an
ordinary light bulb, and the current packaging is a 53% reduction from early models” (p. 14).
These types of numbers wouldn’t have a drastic impact on the perception of the buying public if
they weren’t made easily available. This is why Apple’s website, along with 86% of the 2010
Fortune 100 companies, mentioned the environment on their websites (Creel, 2010). The
collective action of the top companies of the world, along with a more informed consumer, is
creating an environment where companies have to go above and beyond to be recognized as
environmentally friendly.
The environment that companies operate in now is not viewed with equal perception
across the public population. Different demographic groups place different amounts of emphasis
on eco-friendly products and this is something that companies must recognize (Royne, 2011). In
addition, some groups exhibit an attitude-behavior gap, which means that they will claim to be
environmentally conscious, but won’t change their buying habits to reflect this (Royne, 2011). It
turns out that younger people are more willing than older people to pay more for
environmentally friendly products. Also, in one particular study, only 10% of respondents were
Apple Inc.: STEEP & Industry Analysis
not willing to pay more for a product that produced less waste (Royne, 2011). It seems that the
reduction of waste is the number one concern of consumers when it comes to ecological factors.
This type of consumer concern and awareness has driven 70% of large companies to say that
sustainability is permanently on their management agenda (“Sustainability Climbs Agenda,”
2012). The consumers’ perception of a company’s willingness to engage in environmentally
friendly activities is more important than ever because of dwindling resources and increased
consumer awareness.
Political-Legal
Companies around the world need to ensure that they are aware of the political and legal
ramifications of their products and services within their business. The Apple Company has done
a fair job as Reder (2009) explains throughout this case study it conveys how Apple was
studying a business model on how to legally take on certain markets. The outcome was “Apple’s
wait-and-see, stay-the-course approach is a legitimate response, while it attempts to defend these
actions, because of rapidly evolving market forces and innovations” (Reder, 2009, p 209). This
tells us that Apple Company doesn’t have a strong defense when it comes to political-legal
matters and it could hurt them down the road if not taken care of immediately. Praul (2006)
expresses concern about determining if journalist’s privilege applies in cases of trade secrets, and
if website authors qualify for these privileges. The courts focused on other factors then what was
being accused in this case ended with Apple winning. Praul (2006) goes on to conclude that the
court didn’t properly answer the question raised by this conflict and that it will continue in the
future until a standard is set. This is why Apple Company need to ensure that their political-legal
issues that affect their products and issue throughout the mainstream of the market have
Apple Inc.: STEEP & Industry Analysis
justification and reason because eventually legislation isn’t going to look away every time.
One last case that Apple Inc. has when it comes to political business was with Cisco
Systems where they confronted Apple about the trademark on their iPhones, which ended by a
money exchange and allowing future communication business with one another (Cowart &
Chumney, 2011). From the article it explained that Apple Inc. has never done any future
business with Cisco since the money exchange and don’t plan on it (Cowart & Chumney, 2011).
The political-legal analysis of domestic and international markets should be evaluated
significantly in order for no ramifications.
Industry Analysis
The following industry analysis will explore the technology industry which Apple
products compete in. Specifically the analysis will examine this external environment while
offering content on Porter’s approach, new entrants, substitutes, power of buyers, power of
suppliers, and the power of other stakeholders.
Michael Porter’s theory on competitive theory and industry analysis is highly regarded
in the business world as a starting point for strategic planning. However, there has been a lot of
conflicting theories on Porter’s application in today’s business world such as pointed out by
Sumer (2012) who tested various strategic implementation aligned with Porter’s. Porter’s theory
focuses on five competitive forces which should be analyzed. These competitive forces are new
entrants as threats, the bargaining power of buyers and suppliers, existing competitors and any
Apple Inc.: STEEP & Industry Analysis
other stakeholders in the business model. Figure 1-1 shows Porters theory and how the five
forces feed back into Apple and strategic planning.
Figure 1-1: Porter’s Five Forces for Apple
New Entrants
Apple is a commonly known company that competes on innovation, unique products,
differentiation strategy, and integrated products (Capozzi, Nair & Leng, 2012). Though the
company is highly competitive it must continually be attune to the new entrants into the market.
Markets are always evolving with changes in innovation, marketing and brand loyalty. Just
because today Apple is known to compete effectively there are always new entrants willing to
fill the gaps that arise when establish companies don’t plan for a changing environment.
Apple has established itself as a performer within the technology industry as well as other
big name brands like Google, Samsung, Nokia, Microsoft, and Amazon. Being the first mover
within an industry will influence the innovations adopted and also secure benefits
(Wonglimpiyarat, 2012). Due to the first movers and established competitors within this
Apple Inc.: STEEP & Industry Analysis
industry, new entrants are deterred from trying to enter. Other companies will attempt to gain
insights from exceptional companies but put their own businesses at risk for strategic or
operational missteps (Capozzi, Kellen & Smit, 2012).
In order for new entrants to compete with established existing companies there must be
exorbitant customer need, technology advancements and market share potential. New entrants to
an industry will face high capital requirements, impenetrable distribution channels, and strong
brand preferences (Nair & Leng, 2012). These factors alone are often enough to deter most new
entrants. Proven approaches often seem more preferable than starting from scratch, whether for
developing new products or running efficient supply chains (Capozzi, Kellen & Smit, 2012).
New entrants will face enormous obstacles when trying to gain market shares within the
extremely competitive technology business. The desire to emulate is often stronger than
rationality, even when faced with repeated evidence that most companies won’t succeed, some
will continue and suffer a hard fall (Capozzi, Kellen, & Smit, 2012). Apple continues to have the
leading edge due innovation and its ability to take actions now that anticipate changes within the
environment. This helps to ensure that no new entrants have the opportunity to emerge.
Substitutions
Apple is an American multinational corporation that designs and manufactures
electronics, software, and personal computers (Sahoo, 2012). Though Apple has established
market shares across multiple different markets, the threat of substitute products is a concern for
all companies within every market. Substitution occurs as a response to a rise in consumer
purchases, where brand loyalty is low or prices are considered too high. It is no mystery why
companies emulate their most successful peers (Capozzi, Kellen, & Smit, 2012). Apple is a
Apple Inc.: STEEP & Industry Analysis
successful company that services a large group of consumers over an array of technological
markets.
Consumers could seek out substitutions due to Apple’s current weaknesses in limited
product portfolios, newer technology innovations, software compatibility issues, advanced
mobile phone features, and lack of products at different price points. Customer bargaining power
and substitute threat is high with the abundance of technology companies offering lower pricing
(Nair & Leng, 2012). Substitute products for Apple include the Kindle Fire, Samsung, Motorola,
Google, Sony, Yahoo Music, Zune, Netbooks, LG, Amazon, Nokia and Microsoft.
The lack of products at lower price points is proving to be challenge while addressing the
price sensitive consumer; competitors like Samsung have products at varied price points
(MarketLine, 2012). There are a number of threats across multiple product lines, consumers are
increasingly seeking lower cost alternatives and substitutes are willing to accommodate this
need.
Apple currently commands only five percent of the mobile handset market because they
only effectively compete in the smartphone market, and have no presence in feature phones
(MarketLine, 2012). Consumers that can’t afford a smartphone are likely to purchase a feature
phone from a competitor and later upgrade to a smartphone produced by the same company.
Substitutes are gaining loyalty at lower prices points and also offering direct competition at
higher price products. This is an evolving environment for businesses that compete within the
technology industry. Apple must remain agile in order to adapt and evolve with the changes and
continue to retain loyal customers from substitutes.
Buyers and Suppliers in Apple’s Supply Chain
Apple Inc.: STEEP & Industry Analysis
For Apple, the bargaining power of buyers and suppliers is critical to its supply chain.
These key components substantially impact both price and quality of the final product. Because
of high volume, Apple has a high bargaining power within all aspects of its supply chain. Most
likely they get some good pricing, preferential treatment with preferred turnaround times on
supplies and parts.
Apple uses approximately 180 suppliers who provide 97 percent of materials, supplies and
assembly of Apple products globally (Apple Suppliers, 2011). The suppliers who provide the
components to Apple have a direct impact on price and quality of the final product. Often these
suppliers are the same for competitors, and offer prices based on volume and also offer
preferential treatment to these customers. In the firm that I work for, specifically around mobile
telecom we have been told by a supplier that they cannot meet a deadline or price because they
have Apple with a higher demand, therefore their bargaining power is higher with the supplier.
Also, with such a high demand, Apple can shop around suppliers, looking internationally for the
most cost-efficient supplier for its component pieces. Although there are few reputable
component suppliers for, they are well known and some recent entrants in China have changed
the cost model, requiring companies to really investigate the cost without sacrificing quality.
Competitors
With Apple’s recent success in years, one might say that Apple does not have
competition. However, there are still competitors to be considered in Apple’s lines of business.
In the computer line of business, Apple competitors include window’s based operating systems
manufacturers such as Dell, Samsung, Toshiba and Lenova among others. During the earlier
years of the personal computer, Microsoft dominated in the operating system space (Tung,
Apple Inc.: STEEP & Industry Analysis
2011). One might even consider that it had a monopoly on the personal computer space.
However, Apple continued to design and create innovative products to compete in this space,
eventually become a challenger in personal computing with the iMac. With the iMac, consumers
were finally given a choice between using Microsoft based system or Apple’s Macintosh. With
Apple’s success, Microsoft has also become more of a threat, with competing products and
services which build on the fact that the user is familiar with the Microsoft operating system.
Ashu I think that data that you sent me should go in the following section
In the smartphone business, the main competitors are Samsung, Motorola, and Nokia.
The biggest challenge against Apple against competitors in the future is the entrants into new
markets, especially emerging markets (Apple Swot, 2011). Recently, the main threat to Apple is
Google’s Android platform which is used on a variety of manufacturer’s phones. However,
recently windows phone has seen a take-off. Especially in emerging markets, where Apple has
had trouble entering the market, Nokia the manufacturer dominant in these markets has won
some bids in very large markets, including an exclusive contract in China.
According to Porter’s five forces, the strategic thought planning process should consider
new entrants, the power of buyers and suppliers, existing competitors and the threat of substitute
products and services. For Apple, the area for most concern is the existing competitors as the
war for domination continues on, especially in the global smartphone market. In addition, the
threat of substitute products and services is a threat combined with the lack of success for Apple
of entry into emerging markets. In these emerging markets, there is more likely to be products
that emulate Apple by smaller, local manufacturers such as ZTE who have overcome local
legislation that can be a barrier for foreign companies from entering the competitive market.
Apple Inc.: STEEP & Industry Analysis
Conclusion
In conclusion, Apple has gained many successes as a result of the company’s innate
ability to introduce innovative technological products that help consumers perform day to day
tasks in a simpler way. However, the company will have to continue to produce new types of
products to maintain its market lead in innovations. There are other challenges that Apple faces
including tough competition from its competitors such as Dell, Samsung, Toshiba and Lenova
among others. Nonetheless, Apple has successfully positioned itself to be a force in the
technology industry for many years to come. Much praise has been given to the company’s
products and each new product launch is greeted with much fanfare and anticipation. Apple has
successfully gotten the attention of the industry in which it functions and continues to hold
consumers’ attention with additional product innovations. As the company continues to grow, we
would expect that much of the same would continue.
Apple Inc.: STEEP & Industry Analysis
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