Group Discussion

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A Case Study of iWatch
CHAI, Siyu LI, Wei LI, Yinting LI, Shuangyi ZHANG,Zhixin
SWOT Analysis + Porter’s Five Forces + Business Model Canvas + Blue Ocean Strategy

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SWOT Analysis
Internal
1. Strength:
a. Branding & Existing loyal customers.
b. Easy to use.
c. It uses iOS system connecting with iPhone directly. Such
supportive system facilitates UX of Apple users.
d. Aesthetic product appearance and hardware/ software design.
e. Stable supply chain.
2. Weaknesses:
a. High Price
b. Battery capacity limit

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SWOT Analysis
External
1. Opportunities:
a. High brand awareness / brand loyalty
b. The increasing popularization of smart wearable devices
c. Bandwagon/ conformity
d. Rising consumption level
e. Profitable watch market
2. Threats
a. Strong Competitors (Xiaomi, Fitbit, Samsung, Moto-360)
b. Customers are fickle
c. Differentiation
d. Public concern over privacy issues of smart watch
e. Lack of necessity

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Business Model Canvas

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Porter’s Five Forces
Threat of New Entry--relatively low
1. Time and cost of entry: long develop period & high cost
2. Specialist knowledge: need both developer & designer
3. Economic of scale: hardware
4. Technology protection: copyright
5. Barriers to entry: relatively high
Threat of Substitution--high
1. Substitute performance:
2. Substitution within the industry. e.g. Xiaomi, Fitbit, Samsung Gear, Moto-360
3. Substitution from other industries which provides similar function as iWatch.
a. E.g., further developed smart phone; other wearable smart device like ring,
necklace.
4. Cost performance: Customers will consider more about cost performance of the
product instead of performance itself
5. Cost of change: relatively high

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Porter’s Five Forces
Supplier Power--low
1. Numbers of suppliers: around 15
2. Size of suppliers: large
3. Uniqueness of service: low labor fee; low technique content e.g. Foxconn
4. Ability to substitute: Those suppliers offer non-substitutable service so that it’s kind of
hard to switch to other suppliers
5. Products are differentiated or there are built-up switching costs
Buyer Power--low
1. Number of customers: large
2. Differences between competitors: large
3. Price sensitivity: low; demand will still increase because of brand loyalty
4. Ability to substitute
Competitive Rivalry-- fierce
1. Number of competitors: more than 10 competitors
2. Quality differences: relatively large
3. Other differences: feature/performance; design; price; homogeneous functionality
4. Switching costs: relatively high
5. Customer loyalty: high

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Blue Ocean Strategy
Strategy Canvas

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Blue Ocean Strategy
Conclusion:
iwatch is not a Blue Ocean Strategy but it
wins in the Red Ocean. iwatch keeps
creating new features to beat other
competitors in the same industry market.
Eliminate
1. Diversity/ richness of the
appearance design
Raise
1. Battery
2. Resolution (retina)
3. Gravity sensor
4. Software
Reduce
N/A
Create
1. Voice recognition
2. Payment system (Apple pay)
ERRC Grid

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