Apple Business Environment
On April 1, 1976, Apple started as an Apple Computer Company, founded by Steve Jobs, Steve Wozniak, and Ronald Wayne to sell Wozniak’s Apple I personal computer. Later on, in 1977, the name changed to Apple Computer, Inc. Apple’s next computer, the Apple II, the first Apple personal computer, became a bestseller. Apple is now a multinational company in Silicon Valley and manufactures watches, computers, and Televisions, among other electronics.
The user-friendliness of Apple products has sold them worldwide since their target user is everyone. Moreover, Apple has built a brand for itself over the years, producing high-quality products that fit all. Despite the prices of apple products being slightly higher than competitors’, Apple has managed to stick to its pricing models over the years since the quality is
Five Competitive Forces Model
The five competitive forces model is a tool used to analyze the competitiveness in the industry. The proponent of this model was a young professor, Michael E. Porter, in 1979. These five forces include the threat of new industry entrants, bargaining power of buyers, the threat of substitute products or services, rivalry among existing competitors, and bargaining power of buyers.
How Apple Inc Has Addressed Competitor Forces
Among the five competitive forces, Apple has addressed the bargaining power of suppliers and the threat of substitutes. The bargaining power of suppliers shows how suppliers influence industries by imposing demands on companies. Apple Inc has a vast global supply chain; hence the moderating forces against the company are weak.
There are tons of substitutes for apple products readily available today. However, these substitutes have low performance due to limited features; therefore, buyers prefer Apple products due to their convenience and advanced functions, placing Apple Inc at a place where the worry of substitution is a non-issue.
Recommendation Measure of Handling Competitive Forces
In the near future, Apple Inc should work towards setting up more suppliers across the world on all continents to weaken the bargaining power of suppliers more. Moreover, Apple should also set up different versions of products with varying prices to increase the affordability of apple products hence reducing substitution power.
External Threats and Opportunities
The aggressiveness of competing companies such as Microsoft and Samsung has increased Apple products’ imitation. The design of products performing similar roles as Apple’s is rising. Rising labor forces is also another threat to Apple products due to high manufacturing cost. The rise in demand for electronics worldwide is an opportunity for Apple Inc to explore the production of new electronics such as household appliances.
How to Deal with The most Serious Threat and Opportunity
Apple Inc is a known brand worldwide, and the quality of its products is outstanding. Therefore, Apple should utilize its developed brand image and exceptional innovation process to successfully develop and introduce new products to the market. Moreover, aggressively improving technological innovation can also eliminate the chances of imitation. Automation of the production process can also help reduce the rising labor forces.
Greatest Strength and Weaknesses
Apple brand is recognized worldwide, and Apple customers are loyal to the brand due to the quality and efficiency that comes with Apple products and the security feature of products, especially the iPhone.
On the other hand, the lack of compatibility of apple products is a significant weakness. Apple products are only compatible with apple accessories. Electronics such as Iphones have unique charging cables that are not compatible with other phones.
Apple’s product development strategy sees that the company develops profitable technology products, hence making the Apple brand known worldwide and increasing customers’ loyalty. This strategy, if well implemented, can also solve Apple’s most significant weakness, which is the lack of compatibility for the Apple products.
Resources, Capabilities, and Competencies
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