Apple Firm Strategy Analysis – Gautam Thoppey Sudhakar

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IST 755 – Firm Strategy Analysis – Gautam Thoppey Sudhakar Introduction
The firm I have chosen to analyze is Apple. Apple, officially called as Apple Inc. was founded on April 1, 1976 by Steve Jobs and Steven Wojniak. It was incorporated on January 3, 1977. (Mohta, 2010) Apple designs and manufactures consumer products such as computers, laptops, tablets, phones and music players and computer software products such as Mac OS Operation System and iTunes. Over the past few years, Apple has gained a large customer base and been able to dominate the market share. Strategic frameworks such as Porters five forces and Strategic focus will help us in analyzing how Apple has managed to sustain its profits over a long period of time. Porter’s five forces framework

Threat of Competition
When it comes to computers, tablets and music players, Apple dominates the market share by a huge margin. The gross profit for Apple in the year 2012 is $65.64 billion whereas the gross profit for HP and Dell is $27.64 billion and $13.06 billion respectively. (Sparks, 2012) HP was unable to compete with Apple in the tablet market that it has started to consider focusing only on the computer industry. In the smartphone market, Samsung has by far been the biggest competitor for Apple. Samsung has 29.1% of the market share in the smartphone market whereas Apple only has 24.2 % of the market share. (Reisinger, 2012) Threat of new entrants

Considering the large customer base Apple has, threat of new entrants is quite low. The new entrants have neither been able to match up to the quality of the Apple products nor to the sales volume held by Apple. Hence, if Apple continues to design and manufacture innovative products, it will be extremely difficult for new entrants to be able to compete with Apple. Threat of Substitutes

When it comes to Apple’s hardware products, there are no substitutes as such that could replace it. However, when it comes to Apple’s software products such as the iTunes,...
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