APPLE'S PORTER'S 5 FORCE'S

APPLE'S PORTER'S 5 FORCE'S

1. THE BARGAINING POWER OF SUPPLIER'S IS WEAK

   • Apple has a high number of suppliers for different components.
   • There is a high level for components and many different suppliers that Apple can choose from all across the globe, power is weak for those who want to make demands.
   • Apple has reduced the power of suppliers by making some of there own components completely from scratch.
   • Apple has reduced the power of distributors by building there own stores and reduced the power of manufacturing by using equipment that are only compatible with there own products.

2. THE THREAT OF SUBSTITIUTES

   • Although there are products in the market that have the same basic functions as Apple’s products, they have a lower performance and features.
     • Consumers could switch to digital cameras to take high resolution photos, but an iPhone can take the same quality photo and take a video call at the same time.
   • Apple has good marketing, design, research and development which make it more of a threat to others.
   • Apple’s products features are always just more advanced than others making other substitutes have a weaker force.

3. THE BARGAINING POWER OF CUSTOMERS IS STRONG

   • It is very easy for customers to switch brands even though Apple has tried to complicated with the syncing process of media data.
   • Customers are still more powerful so Apple makes customer service and satisfaction very important. However buyers as an individual are weak.
   • Even after Apple’s high product prices an individual purchase is very small compared to there total cash flow.
   • Apple make switching costs low between products by keeping features the same and transferable amongst other devices with iOS such as the iPod, iPhone, iWatch and many more.

4. THE THREATS OF NEW ENTRANTS IS MODORATE

   • For Apple to establish and maintain a better business than other companies they require a high number of capital. .
   • However there are large companies such as Google, who created the Nexus smartphone.
   • Apple has a powerful brand, innovation, quality and customer service, which makes it highly difficult for new entrants to maintain there infrastructure.
   • Google have the finance and familiarity to enter the market and compete against Apple.
   • Google also have the finance and familiarity to enter the market and compete against Apple.
   • The threat of new entrants may be moderate but Apple still needs to be very innovative and marketable to remain a strong brand

5. COMPETITIVE RIVALRY IS STRONG

   • Competition is strong in the market, as companies are finding it more hard to make products different from others and consumers are finding it difficult to make a choice.
   • Most companies use ‘Competitive Pricing’ strategies but Apple has decided to price discriminate there more superior luxury goods.
   • They base the outcome of sales for the company’s reputation on its unique Ecosystem, Customer loyalty, Quality and Service.

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