Bargaining power of suppliers – Moderate. Depending on where along the supply chain a supplier is, his bargaining power varies from low to moderate. There are many suppliers for consumer electronics industry, therefore companies tend to be more elastic. However, if the supplier is unique and provides highly differentiated materials, like Intel supplies its processors, there might be moderate power. In the case of Apple, they contracted with competitors like Samsung and Toshiba that supplied them with components, thus cutting the costs and concentrating on what they do best.
When a producer has a little impact on the price of its product it creates a limited profit potential. As a result, a company needs to act the way market dictates. On the other hand, too much market power brings other problems along, as the Apple Inc. found to its dismay. Apple Inc. is a company with the largest market power and is therefore called a near-monopoly in the oligopolistic industry it operates in. Even though Apple Inc. operates in the oligopolistic market, since it is not the only provider in the smartphone/tablet market, or in the operating systems market, it takes a dominant market share.
These threats should be reduce in order to improve company’s financial performance. The tough competition in the industry is partly because of the aggressiveness of the company. Apple competes with firms like Samsung which also uses rapid innovation strategies in the company. Due to the aggressive behaviour of competing firms, it is necessary important for company to have strong fundamentals for maintaining the competitive advantage. Furthermore, Apple also faces the threat of imitation of its products.
First of all, how changes in technology or technology advancement will affect the company? In the era of technology, technologies always have a short period of time. New tech will replace old tech immediately this is because companies from all over the globe strive to create a better future for the world with technology. If Apple Company did not upgrade their product more often or create a better technology for their upcoming products, they will not be able to outdo their competitors, the company will not be able to attract any customers from buying the products. Not only that, competitors of Apple will start offering cheap and alternative technology in their own products and services at a much lower cost.
Moreover, to compete towards a large and well-known company like Apple it is costly to develop a strong brand and for that a new entrants get to be weak. In the other hand, large companies with a financial strength like when Google produced the smartphones product Nexus and Samsung influenced Apple. This shows that there are large companies that have a chance to compete against Apple. In this part of the 5 forces it shows that Apple should stay strong against new entrants by preserving its competitive
utilizes technology to create a “globalization” advanced quicker and broader. Technology and its virtual world become an enormous business prospect for Apple Inc. Moreover, Apple Inc. establishes their position by developing “design and virtual media” and becomes a culture or lifestyle for people nowadays. Apple Inc. becomes a representation of an up-to-date lifestyle among people. The sociocultural segment also important associated with the sales of Apple Inc.’s products.
A payment gateway is another factor that makes a major difference for the customers in choosing the site they prefer to shop. The more options the company will provide to make payment, the probability of attracting more customers accordingly increases. Easy return, exchange and after sales service is the next factor which further creates a game changing step for E-commerce portals. If the customers find it hard to return the products or don't get proper guidance from the support team, it is a negative sign for the company and chances of losing such customers definitely increases. Assurance of quality is another factor which restricts many customers from buying online portals
So far Apple has succeed in creating demand for its products which gives the company power over prices through product differentiation, innovative advertising, ensured brand loyalty, and a hype around the launced of new products. By focusing on customers willingness to pay more and mantaining a premium price at the cost of unit volume, Apple has also set an artificial entry barrier for its competitors. (Nielson,
Since most people perceive the iPhone as a luxurious gadget, inflation, recession, and dollar fluctuation may lead to reduced sales. Besides, social factors such as increased purchasing power in markets such as China, Africa, and the Middle East imply Apple will expand their marketing operations to such markets (King, 2011). Moreover, rapid change in technology means that Apple has to invest much in research and development to upgrade their products hence outdoing compensation. Lastly, legal factors such as the numerous lawsuits Apple had with Nokia, HTC, and Samsung may hamper Apple’s investment in upgrading the iPhone (King,
You can sustain a higher valuation and higher margins than product-focused companies. What strikes me as strange is that Apple seems to be shifting to a product-focused model, which is why it has been having issues with an increasing number of products and why it had to pull the HomePod. So, while there is a successful approach and one company that has used it successfully, that one company seems to be drifting away from the model, which won 't end well. Wrapping Up Watch Ready Player One or read the book (it is a really good read), and you 'll get a sense for what is coming and how far we must go to get there. We 'll hope the dystopian world that it projects isn 't coming as well, but the eventual future of VR is amazing.