APPLE COMPUTER, 2006
"Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them."
Apple lives this vision through the technologies it develops for consumers and corporations. It strives to make its customers masters of the products they have bought. Apple doesn't simply make a statement. It lives it by ensuring that its employees understand the vision and strive to reach it. It has put systems in place to enable smooth customer interaction. It has put objectives in place to continuously move forward; implemented strategies to fulfill these objectives; and ensured that the right marketing, financial and operational structures are in place to apply the strategies.
External analysis using porter’s five forces model
The industry has a fast growth. Everyday new and innovative products flood the markets. From mobile phones to laptops there is a new product advertised almost every week. The major players of the industry are Dell, HP, Apple, Acer and Lenovo. There is a high entry barrier due to the standardization of the PC components. If any new players wish to come into this business, they need to have a differentiated strategy form the existing companies. Also, a high learning curve exists which means the customers take time to get accustomed with the new product. The existing brand names make the entry barriers high.
Bargaining power of suppliers:
Suppliers for this industry are powerful. There are only a handful of companies like Intel and Microsoft which manufactures microprocessor and operating systems (OS). These suppliers are hard to switch due to dominant production of such components. There is always a threat of forward integration by the suppliers since the products manufactured by these suppliers are highly sophisticated and the other components needed for the production of PCs are not so difficult to imitate. But there are many sources which do provide small PC components like memory chips, disk drives and keyboards.
Threat of substitutes:
Substitutes for most of the products are easily available at a lower price. Although buyers do look for quality and brand name, some of the components they need are purchased from these substitute providers at a low cost. For example if a consumer cannot afford to buy an Apple iPod then he/she has the option to buy any alternative low cost CD player or recorder from some other company. There is high competition due to high industry growth. Manufacturers of these products try every possible strategy to attract the attention of customers through promotion and advertising. Apple fights with its highly innovative products whereas Dell and HP have better marketing and distribution strategies.
It is almost reaching a status of mature market with intense competition but it is still growing. There are companies which are coming up with low cost strategies to compete with the existing manufacturers and this had led to intense rivalry. Companies like Lenovo and HP are already competing with Apple and other companies with notebooks on the basis of cost. Also there are a wide range of MP3 players available in the market which ranges from $30 to $499 and from 1 GB to 160GB. Also there are several websites which give access to downloading and listening music which becomes a high threat for products like iTunes.
Bargaining power of customers:
The type of consumers for this market can be categorized as home, small and medium sized business, corporate, education and government. Since buyers are mostly not concentrated they have less bargaining power for prices and models. Buyers do have a high switching cost which discourages them from buying a similar product from another supplier. But there are a number of substitutes available which makes buyers powerful to choose...
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