Apple Case Study

AppleCase Study

Rivalryamong competitors

Currently,there are major companies that produce personal computers and yetwork in totally different terms of existence. Apple, Dell, HP, Compaqand IBM are the major producers of personal computers today. Theterms of existence and competition of each company is different anddependant on their own way of existence. Apple is majorly focusing oninnovation. Here, the company tries to come up with ways in whichthey innovate their systems everyday for them to stay on top of theircompetitors. Dell on the other hand focuses on the channels ofdistribution and other services. The principle that is employed bydell has been embraced by other companies like HP and this hascreated so much competition between the companies. HP dwells mostlyin ensuring that servicing their systems are easier with ready spareparts and means of reusability. The competitions between thecompanies that produce the personal computers are in different linesyet they all aim at the single factor, staying on top of the market.

Factorscomprising entry barriers

Thecurrent chances of entering the new market for personal computers areslim. The currently existing companies have created big names forthemselves and this reduces fresh competition. In the world today,there are several people who comprise the current customers that havespecified their choices and changing their minds to other productsthat they are not used to could be hard. The chances of a new marketcreating itself in the personal computer industry would take time.The big companies that del with the systems have better competitiveadvantage over all the rest and their current investment is on how tomake the products better and expand their markets. Being that theyhave a name for themselves, the new entering companies must have avery good strategy to reach their level. The capabilities of a newentrance are very slim.

Bargainingpower of the buyers

Mostpersonal computers are very vulnerable when it comes to thepurchasing power of the systems. The buyers have a lot of options tochoose from and this reduces the say of the companies. Since thepersonal computers are competing towards one another, the cheapestdevices normally get the best prices. This is always evident whenthere are single buyers who cannot get the products in goods but theymust get it in single quantities. In comparison, dell has a systemwhere the customers can get their products straight from the headcompanies without passing through intermediate means. This indicatedthat the customers trust the products more when they are certain theycame from the companies that when they do not. Without theintermediates, he companies can work with the customer’sspecifications without imposing a machine on them. The buyers havethe greatest power since the decisions are always with them and thebrand of the company usually plays a major role in coming up with achoice.

Factorsthat give the suppliers power

Supplierscan be categorized in three ways. The first is the hardware supplier,the software supplier and then the service suppliers. In theoperation of a PC, all these suppliers are required but the ones thatdetermine the cost of the personal computer are the hardware and thesoftware. The quality of a computer is largely dependent on themicroprocessor speed which determines the power of the computer. Fromthis microprocessor, there are chances that the slower themicroprocessor speeds, the cheaper the computer can be. The hardwareindustries determine the prices of the computers. In this manner, thesingle most salient producer of the central processing unit is theIntel which controls 80% of the computer pricing and it equallydetermines the cost of manufacture. In the supply of the hardware,there are several companies that make such and for them to get marketfrom the major companies, it is appropriate that they slash theirprices so that they can be bought at the cheapest price possible.This makes the control of the suppliers very average since thecompetition is very high. The suppliers do not control much of themarket unless there is a way of monopolizing the product so as to bethe only supplier. Dealing with the servicing could be done withinthe personal computers.

Substitutesfor the products or services

Inas much as it is hard for a new entrance to make a noticeable changein the industry today, there are other alternatives to the computers.The smart phones and the tablets are widely use as compared to thecomputers today. If this trend continues, then there are very highchances that there are very high chances that the personal computerswill be replaced and their application will not be required anymore.This makes its application just like any other available devices andthe sales will automatically go down. Currently, it is easier toaccess internet using the android enabled phones than in theapplications of the personal computers. In case there is a littleincrease in speed and space of the smart phones, then the personalcomputers are of no use. Statistics from shows that thesales of Dell decreased by 11% on the year that smart phones wereintroduced and this figure has been constantly reducing since thetablets and the smart phones are as satisfying as the personalcomputers are. Substitution can be dangerous to the growth of theindustry (Tom 2010).

Competitiveadvantage of apple

Applemakes its own hardware for its software. It was noted that apple canbe able to make hardware that could fit into their software withoutcomplication. Compared to other companies, the ability of the companyto make its own hardware reduces the risk of competition from thecompanies which get these resources from other companies. Theresources that wold have been otherwise used in buying the hardwareare used in the development of the company and making sure that theystay on top of the market. Secondly, apple has been able tosuccessfully open up its stores and this is one of the greatest movesfor such a company. In most cases, companies that tend to open upstores are less likely to survive. Apple has been able to increaseits sales through the opening of the stores and this has made them tostay on top of their market. From the onset, apple has always beenranked in a class of its own because of the brand name. This has beenan advantage to the company since most of its products have beenassociated with luxury and class.

Sustainabilityof apple against smart phones

Unlikeother personal computers, apple is less likely going to be affectedby the current rise in smart phones. In most cases, people buy appleproducts not because of function ability but because of class andprestige. Currently, the smart phones with the latest androidversions have been in existence and this has not affected the salesof apple to a greater extent. The reason why people buy the smartphones and the apple products are different. Albeit there is anexpectation in a reduction in the sales, the overall performance ofthe company and its products will still be standard. The productdifferentiation of the company is well chosen and chances ofchallenging their sales and market are very slim. With an increasingtechnology and faster innovation, apple has been consistentlyinnovating their product at the cheapest price possible. The qualityof the products, the technology employed and the uniqueness inoperation can be challenged by a smart phone company but only if thesteps are wisely chosen.

Applestrategy for the apple watch

Applewatch has been a defining factor of the apple company. In severalcases, there has been a lot of borrowing ideas but on the phone,apple has ensured that they got a product which would be hard toimitate. The watch had been a mark of the company with all thedifferentiating companies. The uniqueness of the strategy proves theinnovative nature of the company, thinking of new ideas when there isa lot of improvement and challenges. The apple watch has attractedthe capable customers who have a taste towards the apple products. Inthis strategy, apple has been able to observe the trends of theiphones and the ipads and this prompted the decision to come up withanother product to rekindle their sales. The watch has features to beadmired and the applications are friendly. The pricing strategy ofthe watch was the first attraction where the consumers competed forthem for class. This has improved the standards of competition andmade the company more competitive. The differentiation and theinnovative nature of the company can hardly be matched since they areunprecedented. The ratings of the company and the way with whichtechnology has been employed improves their rank as they still remainthe best in the market. The quality and the aesthetics of the watchwere its main attraction (Jeremy 2012).

Recommendationfor future strategy

Theinnovative rate of the company is high and this can be used in makingother useful appliances. The application of the technology inpersonal computers could lead to more attractive features that theyinnovate different system. At the moment, the company is still at thetop of the competitors. Market maintenance owing to the currentcompetition is ait challenging and there. Other products that wouldrequire the software as the watch can be developed. This has the mainpurpose of marketing the products if the company as well ascollecting more ideas and suggestions. Making product which can lastand ae of good quality can enable the consumers to make properchoices. Opening more stores for quality control and good servicesand having a proper customer base with proper education on theapplication of the gadgets, their dangers as well as improvements.


Conlon,Tom, TheiPad’s Closed System: Sometimes I Hate Being Right,Popular Science,2010

Reimer,Jeremy. &quotPersonalComputer Market Share: 2012&quot.Retrieved 2013-02-09.