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2.0 Situational Analysis2.1 External Analysis2.1.1 Industry Analysis184.108.40.206 Porter’s Five ForcesThe industry analysis was done using Porter’s 5 forces as shown in figure 1 below.
Figure 1. Apple’s Porter’s Five Forces analysis (Khan, Alam, & Alam, 2015; Lehuan, et al.,2011; TAN, 2013)Rivalry in the industryApple faces fierce competition from key tech companies such as Samsung, Microsoft, Nokia and Google which is as a result of cost leadership strategy.Nonetheless, Apple maintains its position in the market from its high quality products and high income earner customer focus.Bargaining power of suppliersApples suppliers have a low to moderate effect on its operations due to their unique competence in manufacturing Apple’s products.It has a diversified number of suppliers and hence doesn’t rely on one supplier which lowers their influence on it. The company also buys in large quantities lowering the suppliers’ bargaining power.Threat of SubstitutesApple’s product face high to moderate threat of substitutes for its iPad by Samsung tab, the iPhone by Nokia, Samsung galaxy and Sony Erickson.However, Apple’s OS, iTunes, app store and iClouds are its key strength areas as it has no close substitutes.Threat of new entrantsApple’s global dominance makes it difficult for new entrants to gain a market share to earn them a competitive advantage.Its contract manufacturing strategy, its copyrights, high switching costs and patents bars new entrants.The hence makes threat of new competitors is low.Bargaining power of buyersApple has a strong image as an innovator, great investor in research and development and in quality continuation, and is hence able to retain its customers.Apple is also very effective in switching consumers towards itself. Hence, buyers have no significant influence on Apple’s operations.
2.1.2 Market Analysis220.127.116.11 Market StructureApples products have a promising market this is because an increasing trend in sales has been reported over the years as shown in figure 2 below. Figure 2. Market growth trend (Statista, 2016)2.1.3 Customer AnalysisCustomers are key to the success of Apple. By considering who the main customers are, Apple is able to understand what they seek, where they want to buy them, when to buy and how they buy them. The company is also able to understand aspects that show why the customers buytheir products and hence continuously improve on such aspects. Table 1. Below shows an analysis of Apple’s customers.
Table 1. Customer Analysis- Apple Inc. (Apple Inc, 2016)WhoMain Apple customers are the Mac and Windows users. They include students, graphic designers, banks, hospitals, developers, schools, business owners, IT professionals, law firms and scientists.What -Customers seek originality, quality, fashion, convenience and luxury.