Apple case study
Porter’s five forces model is an outline for any industry analysis that is used in analyzing an industry.
The five competitive forces are;
Threats of new entrants, bargaining power of customers, threat of substitute products, bargaining power of suppliers and competitive rivalry within an industry.
By applying Michael Porter’s five forces framework, it will help establish Apple’s position in the market.
Threats of new entrants
In situations where it is easier for anyinvestor to invest in a sector, then the threat of new entrants can be considered to be very high.
The nature of barriers in place in a particular industry will establish the degree that threats of new entrants pose to the industry, it can be argued that the threat of new entrants in the Pc, tablets and smart phone industry is very high since as noted by Kim (2012), huge amounts of capital for R&D and marketing have to be spent in order to bringa smart phone or tablet to the market. In addition, Kim (2012) notes that economies of scale have to be taken advantage of in order to gain a platform and access the distribution channels effectively.
Some of the new entrants to the industry that have contributed to the decrease in the profitability in the industry include HTC, BenQ, Huawei, ZTE and Lenovo.
Bargaining power of suppliers
Suppliers in anysector include suppliers of the various raw materials used in manufacturing of specific products.
The power of suppliersin any given industry will normally 17 be determined by the amount of suppliers in the given industry. This means that few suppliers in any industry will imply that the suppliers have more bargaining power.
The threat of suppliers in the Pc, tablet and smart phone industry can be said to be very high since there exists very few suppliers of digital signaling chips and operating systems. TexasInstruments as noted by Forbes(2010) is the major supplier of signaling chips to various computers and