Description
This week, you examine a case study of Apple, Inc., which both established a “blue ocean” space in the smartphone industry, and has found room to grow in what is becoming an increasingly global and competitive space.
The essence of the five-force, competitive analysis is to examine whether one might find it attractive or not to compete in a given industry, and where, specifically, there might be “dominant positions” within an industry, and to identify the forces that shape the potential to make money in an industry, given a particular “competitive position.” That is, how will you win? (How will you create unique value?)
Post a polished, researched, and well documented response to the following prompts:
- A detailed explanation of the critical competitive forces (and their underlying dynamics) in the smartphone industry that may threaten Apple based on a relevant five-forces analysis and other concepts you've learned from your MBA program. Be sure to explain how and why you've focused on the critical forces that you've identified.
- A detailed explanation of the potential for new entry and/or effective substitute competition, based on a relevant blue ocean strategy analysis and other concepts you've learned from your MBA program. Be sure to explain how and why you've focused on a particular new entry or substitute threats to Apple.
- An explanation of the strategic implications of the competitive forces you identified above: what are the opportunities and threats to Apple's position in the ecosystem of the smartphone industry that it must factor into its strategy for the future, based on your analysis, and why? Provide evidence from the case and any other research you might do, and support your reasoning with references to this week's readings and from prior MBA program course concepts.
General Guidance: Will typically be approximately 1 single-spaced page in length
Explanation & Answer
Attached.
Outline: Apple Inc. Five Forces Analysis
Introduction: In the smartphone industry, the analysis will assist in determining the competitive
intensity of Apple as well as evaluate the attractiveness of the industry.
Thesis: The critical competitive forces in the industry include competitive rivalry, substitution
threats, threats of new entry, bargaining power of suppliers, and buyers.
The critical competitive forces in the industry
i.
Competitive Rivalry:
•
The current direct competitors of Apple Inc. include amazon, Google, Microsoft, and
Samsung Electronics.
•
The companies are highly aggressive, where they rapidly innovate their products, imitate
apple features, and advertise to consumers
•
The low product differentiation and low switching costs make apple consumers switch to
other brands
ii.
Bargaining power of suppliers
•
Apple incurs a low switching cost in exchanging suppliers, and suppliers are very
reluctant to lose its major consumers.
iii.
•
Bargaining power of consumers
Buyers have strong bargaining power because of the low costs of switching to other
companies, high information level, and a small consumer size
iv.
Threats of new entrants
•
This is a moderate threatening force because new entrants require high capital and high
costs of developing new brands
v.
Threats of substitute products
•
Low performance of su...
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