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Porter’s 5 forces model case apple inc
This document analyzes Apple using Porter's Five Forces framework. It discusses Apple's history and products. For existing rivalry, it identifies competitors like Microsoft, Linux, and other hardware manufacturers. For threat of new entrants, it mentions new technologies and services. For bargaining power of suppliers, it lists companies that supply parts and content to Apple. It then analyzes bargaining power of customers, threat from substitutes, and provides recommendations.
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Porter’s 5 forces model case apple inc
- 1. PORTER’S 5 FORCESANALYSIS-Aditya, Devarsh,Foram , Jonty2/20/20101
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- 5. ABOUT COMPANY5 FORCESANALYSISApril 1st,1976 - FoundedJanuary 3rd,1977 - IncorporatedHeadquarters - Cupertino, CaliforniaCo-founders - Steve Jobs, Steve WojniakCEO - Steve jobsIndustry - Computer software, computer hardware, consumer electronics.Revenue - US$ 19.3 BillionSources: Mc Kensey report2/20/20105
- 6. PRODUCTS AND FIGURESHardware- Mac(personal computer series),Apple Remote Desktop Software - Mac OS X, Mac OS X Server ,Quick Time, i Life, i Work, Logic pro, Cinema Display etc.Consumer Electronics - i pod, i pod hi-fi, i phone, Apple TVEmployees - 19,787 full-time ; 3,399 temporary (March 31,2007)Retail stores - 183( 1st in Manhattan, New York)Competitors - HP, IBM, DELLSources: www.apple.com2/20/20106
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- 8. New EntrantsThreat ofnew entrantsBargaining power of buyersSubstitute products & servicesBargaining power of the suppliersSupplierCustomerSubstitutesExisting rivalry in the industry2/20/20108
- 9. EXISTING RIVALRYWindows OSand media player for playing music and video ( Microsoft)Competition to Mac OS X (Linux)Alternate sources of computer hardware (Dell, HP, Lenovo)Small stylish MP3 players (Creative, Samsung, Sony)Online music stores similar to itunesstores (Napster)2/20/20109
- 10. THREAT OF NEWENTRANTSStreaming audio and video with v-cast (Verizon)On demand online services (similar to i-tunes)New entrants with disruptive technology (The “next google”)2/20/201010
- 11. BARGAINING POWER OFSUPPLIERSSuppliers of processors and computer memory (Motorola, IBM, Intel)Strategic alliance/supplier of Mac (Microsoft)Supplier of tv and movies (Disney, ABC, Fox, Sony)Sources of music (BMG, Sony, Warner, Universal)Magazine :outlook (April-2009)2/20/201011
- 12. BARGAINING POWER OFCUSTOMERSCustomers share music using peer-to-peer networks without paying for music (Ares, Limewire)Retailers may pressure for lower prices or better terms (Distributors)Consumers/Businesses may reduce spending on computers if they fear economic downturns (Consumer Attitudes & Behaviors) Consumer Refresh CyclesSources: Harvard Business review -092/20/201012
- 13. THREAT FROM SUBSTITUTESSatelliteradio for music (XM, Sirius)Entertainment media, media and music (XBOX, PS2)Alternative means to acquire music (Music CDs, DVDs)Alternative sources for videos (Cable, Broadcast, Theatres)Magazine :PC-1 (April-2009)2/20/201013
- 14. RECOMMENDATIONS FOR COMPANY:Lowering the cost of products and maintaining the same quality standardsCan form joint – venturesKnowledge ManagementMore number of retail stores for easy access Continuous innovation to expand 2/20/201014
- 15. RECOMMENDATIONS FOR OTHERS:Do not compromise on price for qualityChoose the products based on individual needsBe unique and different2/20/2010155 FORCES ANALYSIS
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Editor's Notes
- #2 "ITS NOT ALWAYS TRUE THAT FORMING GOOD AND QUALITY THINGS AT LOW PRICES ALLOWS YOU TO SUSTAIN IN THE COMPETITIVE MARKET. WE NEED TO CONSIDER CERTAIN THINGS AND "IF" THOSE THINGS ARE NOT BEEN ADDRESSED, THEN COMPANY IS OUT OF MARKET.GOOD MORNING TO ALL OF YOU. TODAY WE ARE GOING TO PRESENT ON PORTER’S FIVE FORCES ANALYSIS. LET ME QUICKLY INTRODUCE TO MY GROUP MEMBERS DEVARSH, FORAM ,ADITYA AND I JONTY.This is used to analyze factors outside an industry that influence the nature of competition within it .Identified five forces which would impact on an organization’s behavior in a competitive market
- #4 Bargaining Power of Suppliers: This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power. There are very few suppliers of a particular productThere are no substitutesE.g. Microsoft's relationship with PC manufacturersBargaining power of buyer: This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. Here are a few reasons that customers might have power: Small number of buyersPurchases large volumes E.g. Tata wants automobile parts for their new cars so bargaining power of customer is very high.Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:Existing loyalty to major brandsIncentives for using a particular buyer (such as frequent shopper programs)High fixed costsGovernment restrictions or legislationE.g.- PharmaceuticalsAvailability of Substitutes - What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of substitutes: The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker may switch over to a beverage like tea.Competitive Rivalry - This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high.1)Many players of about the same size; there is no dominant firm2)Little differentiation between competitors products and servicesAirlines Industry
- #5 This is the brand the logo itself speaks yes “APPLE”. The, now well-known, American company Apple was the first computer firm not to use its name as its corporate identity. The idea of selling a computer under the name and image of a fruit was conceived by Californian Steve Jobs
- #7 transaction, who make it money. These people accept salt in exchange for other commodities because they know that they will be able to offer that salt when they want to acquire something else. Salt is convenient because it is easily divisible and because it does not deteriorate.