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Managing for Competitive Advantages (Porter's 5 forces)- Apple Inc.

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Managing for Competitive Advantages (Porter's 5 forces)- Apple Inc.

  1. 1. APPLE INC.2. Managing for Competitive Advantage(Porter’s Five Forces)
  2. 2. APPLE INC.Introduction
  3. 3. InApril 1976, SteveWozniak and Steve Jobswere established Appletogether after theygraduated.
  4. 4. In the past ten years, Apple has expanded into a very intricate company.Consumer ElectronicsConsumer Software
  5. 5. The company operates in five sections:Americas, Europe, Japan, Asia- Pacific and Retail.
  6. 6. APPLE INC. Practices & Operations Porter’s 5 Forces
  7. 7.  THREAT OF NEW ENTRANTS - LOW Cost of product differentiation >> Barrier to entry Apply patents for inventions Target customers with high salary range >> Different target market Successfully develop its brand name >> High brand recognition Economies of scales >> Keep costs down
  8. 8.  BARGAINING POWER OFSUPPLIERS - MODERATE Announce plan to use Intel processors >> High switching cost Strong vertical integration >> Not much relying on third-parties supplier Product differentiation strategy >> Pass cost to customers Buying in large volume >> Discount in bulk purchasing
  9. 9.  BARGAINING POWER OF BUYERS - LOW Focus on niche market >> Special demand Product differentiation strategy >> Highly demanding Target customers who emphasize on quality >> Willing to pay higher price Developed high brand loyalty >> Return and purchase Using highly compatible closed-systems >> High switching cost
  10. 10. THREAT OF SUBSTITUTEPRODUCTS OR SERVICES-MODERATE -Samsung smart phone & Table-computer EX: Samsung Galaxy S3
  11. 11. COMPARISON SIZE OF TOUCH SCREEN 31 May 2012,when Samsung Galaxy S3 first -Samsung Galaxy S3 -4.8 inch made available in M’sia -iPhone 4S -3.5 inch -RM999 •PRICE OF SMART PHONE -Samsung Galaxy S3 –RM2199 -iPhone 4S-RM2499- RM3099 Image of iPhone 4S
  12. 12. Built reputation as innovator Differentiation approachConcern on quality Produce "own" substitutes
  13. 13. RIVALRY AMONGCOMPETITORS- MODERATE Computers companies -Dell, HP,ASUS, ACER, Sony & others computer manufacturers. APPLE -Toomuch choices Limited products Difficult for choices, customers to Drive more sales & make choice beat competitors
  14. 14. Spend heavily on R &D department Emphasis onquality of products Productdifferentiation
  15. 15. APPLE INC. Pro & cons in applicationof Porter’s 5 forces
  16. 16. Productdifferentiation Strategy  UNIQUE  Increasing the market demand  Enhance COMPETITIVE ADVANTAGE
  17. 17. •Difficult tomaintain longterm perceivedunique•HIGH COST
  18. 18. Move to Intel processorPro Coming out amazing products Lower production cost and increase salesCons fight against with other competitors
  19. 19. Strong Vertical IntegrationPro Coordinate activities in supply chain Increase customer exposure Enhance product quality and enjoy unparallel pricing powerCons Bureaucratic cost increase
  20. 20. BARGAINING POWER OF BUYERS Focus on niche market Pro  Move efficient and effective  Generate higher profits as customer satisfaction achieved Cons  Not much sales and profit generated  Suffer a great loss when market failure
  21. 21. Highly compatible closed-systemPro Maintain its cost Minimize risk of competitors Rising profitsCons Take time come out patch Cost satisfaction Constantly bear research cost
  22. 22. THREAT OF SUBSTITUTESPRODUCT OR SERVICEFocus making superior quality productPro Reflect high performance Reflect non price competition Insulated from intensive competitorsCons Increase cost of production Possible for losing market share
  23. 23. Produce own substitutesPro Drive up sales and maintain market share Compete with competition
  24. 24. RIVALRY AMONG COMPETITORSSpend heavily on R&D departmentPro High brand recognition and reputation Expand market share Sustain status as industry leaders Enhance probability
  25. 25. Limited choice within product categoryPro Maximize customer satisfaction and loyalty and increase financial returnsCons Increase pressure Ineffective and inefficiency in product development process Possible lost market share and gain loss
  26. 26. APPLE INC. Recommendations
  27. 27. THREAT OF NEW ENTRANTS continue using product differentiation strategy invent new technology products constantly R&D should find ways to cut costs
  28. 28. BARGAINING POWER OF SUPPLIERS build good rapport with supplier continue using vertical integration in their operations reduce their own bureaucratic costs
  29. 29. BARGAINING POWER OF BUYERS focus on their niche market more technicians for the repairing of the software
  30. 30. THREAT OF SUBSTITUTE PRODUCTS ORSERVICES market-skimming pricing when set price for their products products -provide many features and benefits approach of Apple to offer host of products to act as own substitutes should be maintained preserve their uniqueness of products- retain customer loyalty
  31. 31. RIVALRY AMONG COMPETITORS maintain the culture of being innovative consider about the problems of increasing pressure on workers of Research and Development Department – EAP in ShenZhen, China
  32. 32. APPLE INC.Conclusion
  33. 33. CONCLUSION provides numerous type of technology products: iPhone (smart phone) iPad (tablet pc) iPod (portable music player) iMac (desktop computer)
  34. 34. CONCLUSION Porter’s Five Forces Influence of Forces Threat of New Entrants Low Bargaining Power of Moderate SuppliersBargaining Power of Buyers LowThreat of Substitute Products Moderate or Services Rivalry of Competitors Moderate
  35. 35. CONCLUSIONo Advantages and disadvantages.o Exploiting strengths and opportunity.o Correcting weaknesses.o Minimizing threats.
  36. 36. THANKYOU

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