Apple Inc.

Introduction

Apple Inc. has been known the most innovative company, operating in electronic product industry in the world market. Its success is initially attributed to music and video related products, and its products target people who love high-tech, innovative and cool stuff. However, all products face the threat of lower-priced rivals and possible substitutes. In personal computer industry, it is mature market, and Apple early faced an ongoing dispute over graphical user interface. In term of television, it is mature market with a highly competitive environment and a variety of substitutes and competitors. In smart phone industry considered as one of Apple’s turning point, it, however, faces many challenges over competitors. As for tablet industry, it is relatively new market with less competitors but a threat of being imitated.

Analyzing the external environment

The general environment

Demographic
It is a wide range of customers becoming more diverse, including technology enthusiasts and mainstream consumers.

Economic
Cooperation and agreement between firms become a necessary step for each company to compete with others. However, natural disasters provide unpredictable and uncontrollable factors which can directly impact on global economy causing late delivery and other unexpected costs.

Social cultural
It is an innovative and creative market. Consumers’ lifestyles tend to use new technology which provides differences and innovation. In addition, genuine service becomes important to the customers.

Political-legal
Legal downloading is commonly forbidden, and this action of which can directly violate governments’ laws. However, in term of protection to music industry it is not completely shielded by governments. Furthermore, imitation being feasible due to rapid development in telecommunication is also considered a crucial factor in legal system.

Global
Global trend for doing business is wildly common. Well-known brand and high technology create opportunities for multinational companies. Outsourcing is a common way for manufacturers as great selection.

Technology
Internet technology is highly developed as well as telecommunication which provides precious resources and information at hand and can easily translate knowledge into new outputs. Precise components and services are available so that companies can coordinate with others to create value to customers.

Conclusions

General environment actually provides the bright perspective for Apple even though there are some threats and uncertainties such as unpredictable weather conditions, a wide range of diverse customers, illegal downloading and being imitated. However, illegal downloading and diverse customers turn out becoming opportunities for Apple due to its innovation forming a mainstream and iTunes changing the music industry. Furthermore, high technology and telecommunication reach Apple’s needs in terms of development with its well-known brand. Apple’s unique innovation can give itself more competitive to response to global customers’ needs. Finally, general environment provides not only Apple opportunities but also other competitors which intensify competition between firms.

Industry Analysis

Threat of new entrants
Barriers to entry of television industry are very high, market capacity is not much enough to gain shares easily and the switching cost is relatively high. As for mobile phone and computer industries, both of barriers to entry are moderate or low due to less switching cost. In tablet industry, there are low barriers to enter due to Apple’s unique product feathers, a large amount of capita on hand and no switching costs in this market.

Threat of substitute products
In tablet industry, there is not much threat of substitutes but smart phone, their own product (iPod) and personal computer which could have big influence on sales. In television industry, it is a relatively high