[Updated] Apple- Porter 5 Forces Model.docx

[Updated] Apple- Porter 5 Forces Model.docx -...

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- forces-apple.asp 4. Porter Five Forces Model Michael Porter’s five forces model below is used to examine the five main competitive forces in a given industry. Figure 1. Porter 5 Forces Model (Source from: Porter, 2008, p. 80)
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4.1 Bargaining Power of Supplies The large number of suppliers in the market significantly weakens the bargaining power and demand to strengthen their market position, as Apple holds the leverage to select preferred supplier for parts and components to be used for its products. Besides, the impact and the switching cost to replace incompetent supplier is rather low for Apple. The power of supplier, in this case, is limited but beneficial in the business portfolio of having the giant smartphone producer, Apple, as their customer. Therefore, Apple’s negotiation power is presumably greater in obtaining the best deal. Total: 92 words The bargaining position of suppliers is weakened by the high number of potential  suppliers for Apple and the ample amount of supply. Apple is free to choose from  among a large number of potential suppliers for component parts for its products.  The switching cost for Apple to exchange one supplier for another is relatively low  and not a significant obstacle. Plus, Apple is a major customer for most of its parts  suppliers, and, therefore, the suppliers are very reluctant to take risk of losing  contract with apple. This strengthens Apple's position in negotiating with suppliers.  This strengthens Apple's position in negotiating with suppliers  
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4.2 Bargaining power of buyers It is evitable to note that bargaining power of buyers greatly influence the Apple’s business and market share. This can be observed with the three common external factors that relates to strong force of consumer: (a) The low switching cost , in which the customer most likely switch to another brand with marginally low cost. (b) The high availability of product feature , in which the customer scrutinize the comparison features of other available product and influence decision to opt to another brand.
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  • Summer '17
  • mani
  • Porter five forces analysis, Complementors

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