1) General Environment Analysis (10 points)
1a. Identify what Apple's primary industry or (industries—Apple is present in multiple industries) is (0.5point). Apple’s Primary Industries are: Personal Computers, Digital Music/Media, Computer Software, Handheld Gaming, Digital Reader, Portable Music/Media Player, and Telecommunication. 1b. Identify who Apple's direct competitors (in multiple industries) are (0.75 point). Microsoft, Dell, Gateway, Alienware, Zune, Napster, Nokia, Samsung, Blackberry, Google, Android, Creative SanDisk, HP, Android, & IMB. 1c. Identify who Apple's indirect competitors (in multiple industries) are (0.75 point). Cisco, Brocade, Sanrad, Sony, Nintendo, Netgear, Blockbuster, Netflix, and Cable Companies. 1d. Based on the Apple case, identify 10 general environmental trends/changes that could drastically influence Apple's Industry/industries. Make sure that you pick at least one trend from each segment outlined below. When providing your answers please use the following format: Each trend is .8 points, totaling to 10 points for Q1.
General Environment Analysis
SegmentsTrend/events/changes (list at least 1 trend/event for each category)How do these trends/events/changes impact the industry? Positive and/or negative Explain why Demographics1
Socio-cultural1 Computer requirements are increasing across the globePositiveHigher demand for the computer industry.
2 Younger generations are introduced to technology at a younger agePositiveIncrease in product demand and creation of brand loyalty at earlier ages. Political/legal1 Increase of piracy laws in music and mediaPositiveIncrease of new customers buying music and media legally.
2 Increase of environmental regulations in disposing electronicNegativeHigher cost in R&D to create consumer electronics environmentally friendly and increase in production cost. Technological1 Increase in technology advances have decreased the price of technology productsPositiveIncreases the span of consumers that can afford the products.
Economic1 Unemployment rates are decreasingPositiveIncrease of disposable income and therefore more people can afford luxury items.
2 Slow increase in economic growthNegativeConsumers have less disposable income Global1 Rising affluence in third world countriesPositiveIncrease of disposable income and therefore opens the demand in countries that previously couldn’t afford it.
a) Conduct Porter’s Five Forces Analysis (please use the following format below) -2 points for each force (10 points) b) Based on your analysis below, please briefly explain whether Apple has a favorable or unfavorable position in its industry (industries)—please make sure you incorporate your findings from 5-forces analysis (below) that you conducted (2 points).
The Threat of New Entrants is LOW or Entry Barriers are HIGH when:YesNo If you answer yes to all these questions
then the entry barriers
are high for your Industry.
In other words, the threat
of new entry is low due
to high entry barriers.
The industry has players with large economies of scale (players with big size and cost advantage) X The industry has players with high product differentiation (players already with brand identity and loyalty)X The industry requires high start-up costs or capital requirements X High switching costs (It is costly for customers to switch between products/services)X It is difficult to access to well-established distribution channels or important suppliers (success requires access to distribution channels or suppliers)X Your Decision: Is the threat of new entrants high, moderate, or low for your industry: low
The Bargaining Power of Buyers/Customers is HIGH when:YesNo
If you answer yes to
all these questions
then the bargaining
power of buyers is
high in your industry.
Buyer/customer is concentrated or...