apple inc presentation-phoenix
TRANSCRIPT
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Apple Inc. in 2010
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Threat of
New Entrants
Threat of
New Entrants
Threat of New
Entrants
Threat of New
Entrants
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Due to increased standardization in operating system (by Microsoft) andMicroprocessors (by Intel), it is easy for any new entrant to clone and
manufacture PCs (called white boxes) with no established brand name.
Players like Dell today have shifted to negative working capital because of theirstrategy of build-to-order. This is an attractive option for new entrants.
Selling PCs directly to customers using Internet is also possible. However,existing large companies have established strong supply chains, distributionchannels, R&D, marketing, and customer support services to create moderateentry barriers.
As the PC industry in most nations is close to the maturity stage, the numberof entrants has slowed down and industry concentration increased. Theresults are lessened entry, which has led to a more concentrated industry.
Hence threat from substitutes is weak to moderate in the PC industry.
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Bargaining
Power of
Suppliers
Bargaining
Power of
Suppliers
Threat ofNew
Entrants
Threat of New
Entrants
Threat of New
Entrants
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Most of the components are highly standardized and widely available from alarge number of suppliers.
Software makers hold significant power compared to PC makers. Forinstance, Microsoft, which does not have a competitor for its Windowssoftware, dominates the industry and thus has a strong power to influence
the PC industry.
Since (CPU) is a key input, Intel has a significant market power as it isa single major supplier of microprocessor and has an 80% marketshare.
The suppliers, therefore, are often forced to slash prices or mergewith larger companies in order to survive.
Hence the bargaining power of suppliers is moderate.
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Bargaining
Power of
Buyers
Bargaining
Power of
Buyers
Threat ofNew
Entrants
Threat of New
Entrants
Threat of New
Entrants
Bargaining
Power of
Suppliers
Bargaining
Power of
Suppliers
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Hence the bargaining power of buyers can be concluded to be strong.
Large businesses, governments, and schools, which buy computers in large
volumes, have the power to bargain on price, quality and service. Personalcomputer buyers are price-sensitive.
However, buyers have less power when the switching costs and brand-loyaltiesare high. Thus, PC manufacturers can reduce a threat of buyer power by
differentiating their products.
Clone and manufacture PCs (called white boxes) sold in thesupermarket and electronic retailers at a very cheap price affected theprices of the branded computers
But, despite several ways in which manufacturers have differentiated theirproducts and found ways to increase switching costs, customers still see unitsas very similar and thus choose primarily on price.
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Threat of
Substitute
Products
Threat of
Substitute
Products
Threat ofNew
Entrants
Threat of New
Entrants
Threat of New
Entrants
Bargaining
Power of
Buyers
Bargaining
Power of
Buyers
Bargaining
Power of
Suppliers
Bargaining
Power of
Suppliers
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Hence threat from substitutes is weak tomoderate in the PC industry.
A cell phone with an Internet web browser and emailingfunction is a substitute for the PC for people who use a
computer only to use those functions.
However, the PC is still a necessity today as it has actually
taken many functions away from other products to become a
substitute for products such as the TV, newspaper, magazine,
book, videogame, CD player, DVD player, photo album,
calculator, word- processor, telephone, fax machine, and soon. However substitutes for computers do not have as many
functions as a PC and are not close in performance.
Fax machines in place of overnight mail deliveryFax machines in place of overnight mail delivery
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Threat of
Substitute
Products
Threat of
Substitute
Products
Threat of
New EntrantsThreat of New
Entrants
Threat of New
Entrants
RivalryAmong
Competing Firms in
Industry
RivalryAmong
Competing Firms in
Industry
Bargaining
Power of
Buyers
Bargaining
Power of
Buyers
Bargaining
Power of
Suppliers
Bargaining
Power of
Suppliers
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The five main manufacturers namely Acer, Dell, HP, Apple and Lenovo are
in competition to produce the least-expensive and most efficient machine.
As the PC has become a more commodity-like product, price-competition
has become severe in the industry. The price of PCs has declined since
1990s. Cost-cutting is now critical for PC producers to cover the
decreasing profit margin.
Some companies such as HP and Apple focus more on innovation while
others such as Dell focus on distribution channel and service, which creates
differentiation to some extent.Since the quality of a PC is largely determined by the microprocessor and
application system installed, the profitability and prosperity of the PC
industrys is dependent of the profitability and prosperity of these
suppliers.
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Another important aspect of competitive advantage is globalization. Many;PC makers in the US now earn around 40% of their revenues in international
markets. Although PC markets in the US, Europe, and China have matured
and the demand has slowed down, demand in Asia-Pacific and China is
expected to grow.
As the PC has become a more commodity-like product, price-competition
has become severe in the industry. The price of PCs has declined since1990s. Cost-cutting is now critical for PC producers to cover the decreasing
profit margin.
The effects of intense competition are beginning to be felt as companies exit
via selling to other companies or simply exiting the industry altogether. Acer
and Lenovo both benefited from acquisitions of high-profile PC brands.
Regardless of the number of companies present, the computer industry will continue
to expand and remain competitive for a number of years to come. Hence the threat
to industry rivalry can be concluded to be strong.
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Design Appeal.
Apples focus on Innovation.
Integrated approach with software,
hardware and service.
Ease of use.
Strong brand and brand Loyalty.
Strategic Marketing. Steve Jobs
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Status appeal
Innovative applications Advanced technology
First mover in full touch screen phones
Revolution of Smart-Phone concept
Average selling price of 562$ (30% more thancompetitors)
Huge commercial success (third position
behind Nokia and RIM)
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The common theme with apple is innovation andsuccess. Apple is not afraid to be bold and try new things.Through their failures they have learned, gainedperspective, and have taken on the next challenge with the
skill and experience of a seasoned artist. Apple hassurvived hard times before and has brought itself backfrom the brink of oblivion to become a company that noone can imitate. The portfolio of achievements that Apple
has amassed is prodigious and virtually unattainable formost companies. As long as the company keeps an openmind towards new products and services with a healthyinnovation, there is no reason why they cannot continueprosperity for the foreseeable future.
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http://planningskills.com/askdan/13.php
http://tech.yahoo.com/blogs/yoon/278
http://www.appleinsider.com/articles/07/07/18/apples_u_s_mac_market_share_rises_to_5_6_percent_in_q2.html
http://www.canalys.com/about/index.htm
http://www.chinapost.com.tw/business/americas/2008/02/28/144868/Nokia-Samsung.htm
http://www.conference-board.org/economics/ConsumerConfidence.cfm
http://www.ethicalcorp.com/content.asp?ContentID=5485&ContTypeID=46
http://www.greenpeace.org/usa/news/iphone-s-hazardous-chemicals
http://www.guardian.co.uk/business/feedarticle/7993658http://www.reghardware.co.uk/2008/01/24/sa_q4_phone_figures/
http://www.intomobile.com/2008/11/09/apple-takes-2nd-in-smartphone-market-share-but-q4-looking-good-for-rim.html
http://www.mobileburn.com/news.jsp?Id=5572