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To take advantage of the good run after the launch of

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To take advantage of the good run after the launch of online store, Apple will start openingphysical stores. The first store is slated to open in the second half of 2021 in Mumbai. Theestablishment of a strong direct distribution channel will allow Apple to grow significantly.With the setting up of local manufacturing units, price of Apple products will come downfurther thereby increasing demand of these products.
Fig. 4 Product customization at Apple’s official website in India[29]Channel IntermediariesLatest iPhones model retail at a very high price in India owing to the tax system here. Apple’siPhone X which retailed at89,000 for the base model carried a profit margin of only 4.5%for the resellers as against 6.5% earlier[30]. If the customer pays via credit/debit card, the profitmargin drops to 2-2.5%. Companies such as Samsung and Xiaomi offer a profit margin of 10-15% and they cost far less.This led to companies stocking less of Apple’s phones and more of other brands. Thisclarifies why Apple’s market share is so low in the country. If Apple intends to gainsignificant market share, it needs to provide higher profit margin to resellers competitive withother brands and lower down its product cost in the long run so that it does not hurt theresellers in stocking these phones.3.Porter’s Five Force AnalysisApple primarily competes in the Consumer Electronics Industry. The following sectionsrepresent the analysis of the intrinsic long-run attractiveness of the industry using Porter’sframework. Apple can be analysed in the industry context at a Global level and at a Countrylevel (India).3.1. Global Consumer Electronics IndustryThe Global Consumer Electronics Industry has low to medium level of attractiveness.PortersFive ForceDescriptionCompetitor RivalryThe global industry is highly competitive:Fierce competition among top players that dominate the global market[39]
Low switching cost for consumers for switching from one brand to anotherfor reasons such as better features, user experience, customer service, andlow price.Threat ofPotentialEntrantsThe threat of new entrants is low:Established Brand Loyalty of existing companiesThe need for huge initial capital investmentsInvestment in R&D for continued product innovationEconomies of scale and scope, giving existing companies a low-costadvantageThreat ofSubstitutesFor existing products,the threat of substitutes is high, which constitutecompeting brand’s product that can perform similar functions.BargainingPower ofBuyersThe bargaining power of buyers is medium to high:High collective bargaining power despite low individual buying powerLow switching cost for buyers to switch from one brand to anotherEase of information access about the brands’ products and servicesBargainingPower ofSuppliersThe bargaining power of suppliers is low:Presence of multiple global suppliers[38]Low switching cost for the brand to switch to another supplier3.2. Indian Consumer Electronics Industry

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Term
Fall
Professor
hehe
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Apple Stores

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