Apple's Stratergy
Report on: Apple Inc.
Industry: Commercial Electronics Industry
Word Count: 978
Abstract
Apple has established a reputation as an innovator by offering easy-to-use products that cover a broad range of segments in the industry. The main findings included the industry is the fastest growing industry and the product lifecycle is very short (6-12 months). Currently, Apple is the dominant firm but it is facing increased competition from rival firms.
Introduction
This report gives an analysis of Apple Inc., a worldwide organisation, by using Porter’s Five Forces, giving an insight into the company’s strategic position, the reasons behind it and how the forces interact with each other. The ‘strongest force’ becomes vital for ‘strategy formulation’ for a company. (Porter 1985, 35).
Its true core is Technology and Product Design although it has also moved to entertainment and media services sector that add significant value to their products. It is in an industry which is changing rapidly in terms of technology advancement thus it is forced to keep up with changes or else risk the potential loss of market share.
Competitive Rivalry within the consumer electronic industry
The worldwide smartphone market was ‘forecast to grow 55% year over year in 2011’. This increase makes the industry the fastest growing meaning greater profits for Apple but also a greater threat of competitive rivalry as firms seek to take advantage of the expanding market.
According to IDC, an analyst group, cheaper rivals including Samsung and Amazon have cut Apple’s market share ‘from 60 per cent to 50 per cent in the past 12 months’ in the tablet sector of the industry (The times, 2012). In response to the ‘mounting pressure from its closest competitors’ Apple released the IPad mini and IDC predicted this ‘would boost Apple 's already dominant position in the tablet market’.
Apple ‘spent $933 million’ on ‘advertising battles’ (Porter 1985: 46) to strengthen its brand name which reduces
Industry: Commercial Electronics Industry
Word Count: 978
Abstract
Apple has established a reputation as an innovator by offering easy-to-use products that cover a broad range of segments in the industry. The main findings included the industry is the fastest growing industry and the product lifecycle is very short (6-12 months). Currently, Apple is the dominant firm but it is facing increased competition from rival firms.
Introduction
This report gives an analysis of Apple Inc., a worldwide organisation, by using Porter’s Five Forces, giving an insight into the company’s strategic position, the reasons behind it and how the forces interact with each other. The ‘strongest force’ becomes vital for ‘strategy formulation’ for a company. (Porter 1985, 35).
Its true core is Technology and Product Design although it has also moved to entertainment and media services sector that add significant value to their products. It is in an industry which is changing rapidly in terms of technology advancement thus it is forced to keep up with changes or else risk the potential loss of market share.
Competitive Rivalry within the consumer electronic industry
The worldwide smartphone market was ‘forecast to grow 55% year over year in 2011’. This increase makes the industry the fastest growing meaning greater profits for Apple but also a greater threat of competitive rivalry as firms seek to take advantage of the expanding market.
According to IDC, an analyst group, cheaper rivals including Samsung and Amazon have cut Apple’s market share ‘from 60 per cent to 50 per cent in the past 12 months’ in the tablet sector of the industry (The times, 2012). In response to the ‘mounting pressure from its closest competitors’ Apple released the IPad mini and IDC predicted this ‘would boost Apple 's already dominant position in the tablet market’.
Apple ‘spent $933 million’ on ‘advertising battles’ (Porter 1985: 46) to strengthen its brand name which reduces
References: Bradshaw, T (6th November 2012) Apple loses big slice of tablet market, Financial Times pg1 Anon, (6th November 2012) Apple 'being caught by tablet computer rivals ', Times pg Anon, (28th September 2011) Amazon Kindle Fire to enter tablet computer market, BBC http://www.bbc.co.uk/news/technology-15096655 Jung-ah Lee, (7th September 2012) Apple Cuts Samsung Reliance, The Wall Street Journal http://online.wsj.com/article/SB10000872396390443686004577636511318503288.html Wingfield, N & Duhigg, C, (13th January 2012) Apple Lists Its Suppliers for 1st Time, The New York Times http://www.nytimes.com/2012/01/14/technology/apple-releases-list-of-its-suppliers-for-the-first-time.html?_r=1& Houghton, F, (1st November 2012) Apple Inc. (NASDAQ:AAPL) R&D spending continues to rise, up about 40% this year, Property Mentor Group http://www.propertymentorgroup.com/apple-inc-nasdaqaapl-rd-spending-continues-to-rise-up-about-40-this-year/124202/ Anon, (23 October 2012) IPad Mini unveiled by Apple as it enters small tablet market, BBC http://www.bbc.co.uk/news/technology-20042738 Framingham, M, (June 9, 2011) Worldwide Smartphone Market Expected to Grow 55% in 2011 and Approach Shipments of One Billion in 2015, According to IDC http://www.idc.com/getdoc.jsp?containerId=prUS22871611 Thomas, P, Breitzman, A (November 2011) Apple Has the Most Powerful Patent Portfolio in Consumer Electronics http://spectrum.ieee.org/at-work/innovation/apple-has-the-most-powerful-patent-portfolio-in-consumer-electronics/1