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 share is to take customers away from the competition; Dell, Gateway, and HP/ Compaq. Dell runs a direct-to-customer business which offers consumers lower prices, increased customization, and outstanding customer support. Gateway offers a service similar to Dell, but complements it with brick and mortar locations where customers can interact with sales representatives. HP/Compaq plans to focus on innovation in order to keep the large customer base they have already attained.
In the software sector, the competitor base is rather different where one company, Microsoft, has substantial market share on PC based machines. However Apple offers its own operating system on its own Apple computers, the software is not compatible with PCs. It can be said the market share in the software industry is directly proportional to how many hardware units it sells, and also how well it can get consumers to upgrade to their new OS X operating system. Apple with 6 percent in the desktop market and 10 portable has been fighting a losing battle for market share in the education market to companies like Dell. Apple is hoping to find new markets to enter with its iTunes, iPod, and iMac products.
II. Porter's Five Forces Model
1. Threat of New... [continues]
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