Eco 365 Week 3 Current Market Conditions Competitive Analysis
Current Market Conditions Competitive Analyst Shannon Albright, Suzannah Gerhardt, Anne Truzzolino, and Stephanie Zahorchak
ECO/365
December 1, 2014
Benjamin Zuckerman
Current Market Conditions Competitive Analyst
Introduction
Understanding the competitive forces within a market is essential for the successful rollout of a new product. The following paper will perform a competitive market analysis to determine the product’s potential success. Our team has selected Apple and Smartphones. Apple is a very successful organization and they have mastered marketing to the consumer with their phone design and style. Despite their astronomical success there are some very good competitors with equipment that is comparable if not better than them. …show more content…
The demand for smart phones has increased over time. One factor that has been affecting this increase is technological advances. New technology allows consumers to do more with their phones so they are switching to using smart phones over home computers, home phones, and navigation systems. Also, the age of consumers that are using a smartphone is getting younger and it increases the amount of consumers in demand.
Supply is being affected by the cell phone carriers as well as factors of production. The contracts with the cell phone carriers influence how many phones to supply by each firm. Also, the price of producing the smart phones determines the price and amount of supply. As the demand and supply changes for smartphones, the equilibrium price is affected as well. Companies are not able to charge above the equilibrium price because they are at risk of losing consumers to the competitors. The smartphones that are in the market are very comparable and consumers do not always have brand loyalty. If they can get the same functions and abilities for less, they are likely to switch products. This has been seen a lot in the market between consumers switching between the Apple iphone and the Samsung …show more content…
The use of price elasticity of demand can be essential to companies that are selling products since it will calculate the value of price elasticity of demand. IPhones are inelastic as they have grown to become a luxurious, addictive good that compels consumers to buying them. According to Apple Inc. 2011 quarterly reports, Apple sold 270,000 iPhones in the second quarter and 1,119,000 iPhones in the third quarter. If calculated according to the equation for price elasticity of demand, the iPhone would have a brand elasticity of 4.7. This means that Apple would lose almost 4.7 percent of iPhone sales for each 1 percent increase in price.
The Law of Diminishing Marginal
ECO/365
December 1, 2014
Benjamin Zuckerman
Current Market Conditions Competitive Analyst
Introduction
Understanding the competitive forces within a market is essential for the successful rollout of a new product. The following paper will perform a competitive market analysis to determine the product’s potential success. Our team has selected Apple and Smartphones. Apple is a very successful organization and they have mastered marketing to the consumer with their phone design and style. Despite their astronomical success there are some very good competitors with equipment that is comparable if not better than them. …show more content…
The demand for smart phones has increased over time. One factor that has been affecting this increase is technological advances. New technology allows consumers to do more with their phones so they are switching to using smart phones over home computers, home phones, and navigation systems. Also, the age of consumers that are using a smartphone is getting younger and it increases the amount of consumers in demand.
Supply is being affected by the cell phone carriers as well as factors of production. The contracts with the cell phone carriers influence how many phones to supply by each firm. Also, the price of producing the smart phones determines the price and amount of supply. As the demand and supply changes for smartphones, the equilibrium price is affected as well. Companies are not able to charge above the equilibrium price because they are at risk of losing consumers to the competitors. The smartphones that are in the market are very comparable and consumers do not always have brand loyalty. If they can get the same functions and abilities for less, they are likely to switch products. This has been seen a lot in the market between consumers switching between the Apple iphone and the Samsung …show more content…
The use of price elasticity of demand can be essential to companies that are selling products since it will calculate the value of price elasticity of demand. IPhones are inelastic as they have grown to become a luxurious, addictive good that compels consumers to buying them. According to Apple Inc. 2011 quarterly reports, Apple sold 270,000 iPhones in the second quarter and 1,119,000 iPhones in the third quarter. If calculated according to the equation for price elasticity of demand, the iPhone would have a brand elasticity of 4.7. This means that Apple would lose almost 4.7 percent of iPhone sales for each 1 percent increase in price.
The Law of Diminishing Marginal