Apple

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COMPUTER INFORMATION SYSTEM POTTER FIVE MODEL

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Apple

  1. 1. Porter’s Five Force Model THREAT OF SUBSTITUTE PRODUCTS & SERVICES BARGAINING POWER OF SUPPLIERS BARGAINING POWER OF BUYERS THREAT OF NEW ENTRANTS <ul><li>Medium </li></ul><ul><li>PCs are available in multiple configurations, performances and price ranges </li></ul><ul><li>PCs represent about 90% of the market </li></ul><ul><li>Huge network externalities for PCs </li></ul><ul><li>No Mac clone available No competing product in the Mac market </li></ul><ul><li>Low </li></ul><ul><li>Suppliers compete among themselves to obtain exclusive contracts with Apple and therefore have no bargaining power. </li></ul><ul><li>Medium </li></ul><ul><li>End-users are mostly loyal. </li></ul><ul><li>Cost of switching to PC is high. </li></ul><ul><li>PCs have dominance in the marketplace, and huge network externalities. </li></ul><ul><li>Threat of switching to Wintel platform always present. </li></ul><ul><li>Low </li></ul><ul><li>High capital investmentCommoditized market makes it difficult to differentiate </li></ul><ul><li>Substantial dominance of low-cost large-scale players (Dell, HP, IBM) </li></ul>
  2. 2. Value Chain FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT PROCUREMENT OUTBOUND LOGISTICS OPERATIONS INBOUND LOGISTICS SERVICE PRIMARY ACTIVITIES SUPPORT ACTIVITIES MARKETING & SALES TECHNOLOGY DEVELOPMENT COMPETITIVE ADVANTAGE <ul><li>FIRM INFRASTRUCTURE </li></ul><ul><li>Apple infrastructure consists of a single campus in California, USA. </li></ul><ul><li>Apple has 194 Retail Stores around the World. </li></ul><ul><li>Manufacturing is completely outsourced. </li></ul><ul><li>HUMAN RESOURCE MANAGEMENT </li></ul><ul><li>Apple employs approximately 20,000 employees around the world. </li></ul><ul><li>TECHNOLOGY DEVELOPMENT </li></ul><ul><li>Apple spent 712 million in research and development in 2006. </li></ul><ul><li>Apple has one of the most admired design and engineering departments in the world. </li></ul><ul><li>PROCUREMENT </li></ul><ul><li>Apple chooses its suppliers based on its stringent standards of technology and quality. </li></ul>SUPPORT ACTIVITIES PRIMARY ACTIVITIES <ul><li>INBOUND LOGISTICS </li></ul><ul><li>Procurement of raw materials is supervised by apple but carried out by Chinese manufacturers. </li></ul><ul><li>OPERATIONS </li></ul><ul><li>Production is Completely outsourced to various chinese manufacturers. </li></ul><ul><li>Apple supervises production to ensure it adheres to their strict quality control policy </li></ul><ul><li>OUTBOUND LOGISTICS </li></ul><ul><li>Finished goods are delivered directly to apple retail stores around the world. </li></ul><ul><li>MARKETING & SALES </li></ul><ul><li>Apple advertises online, on TV and through print ads. </li></ul><ul><li>Apple stores have various programmes to promote their products. </li></ul><ul><li>Apple is also endorsed by their fiercely loyal customers. </li></ul><ul><li>Products are sold by Apple resellers, through the Apple website and at 194 retail stores around the world. </li></ul><ul><li>SERVICE </li></ul><ul><li>Applecare provides extensive customer support around the world </li></ul><ul><li>Updates of software are regularly released. </li></ul>
  3. 3. Strategic Grid POTENTIAL STRATEGIC SUPPORT OPERATION Degree of dependence of business on IS/IT applications in obtaining business performance Potential Contribution of IS/IT applications to achieving business goals HIGH HIGH
  4. 4. Critical Success Factors <ul><li>Innovation </li></ul><ul><li>Brand Loyalty </li></ul><ul><li>Steve Jobs </li></ul>

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