Among the several selections, Apple has chosen the differentiation emphasis strategy in the broad industry. The technology and development of products by Apple are its highly unique traits, with devices including the iPhone, ipod device and iPad where in fact the use touch screen and other interfaces to use the products. Apple spends billions of dollars annually on R&D (Research and Development) to build up and promote its products to be able to achieve superior quality over opponents' products. Apple slogan is 'Think Different', which drives these to innovate and offer high quality regarding their products. Apple's marketplaces are global, however they are focusing on active marketplaces such as America, the European union and some Asian countries. However, Apple focuses on a market section where customers evidently believe that Apple provides value for its customers. In addition, Apple got a positive expansion rate through the economic crisis of 2007-2009 (Business week, 2010). Apple's top quality price strategy and its success have grown to be a significant hurdle to competition such as Nokia, Motorola, HTC and the E-book by Sony.
Porter's Five Forces Analysis
Porter's Five Forces analysed the external environment of the industry in order to give an improved knowledge of the strengths and weaknesses within the company. These analyses give the company the capability to identify the opportunities and threats from exterior factors (Harrison, 2003). These forces include:
Threat of new entrants
For each of its product lines, Apple, like any other company, encounters rigorous competition. This high-tech industry requires continual research and development (R&D). This sector is difficult for new companies to type in because new entrants must spend a huge amount of capital on R&D and on the advertising and advertising of these brand. There are a few dominant providers in this sector such as Apple, Microsoft, Dell and Sony, who reveal a lot of the market. Apple should be aware of new entrants because they could come up with astonishingly better technology or a much better product. However, these new entrants are less of a threat since it is difficult to enter into and penetrate the market in a limited time (Harrison, 2003).
Power of the supplier
Porter's second push state governments that the bargaining vitality of suppliers imposes a threat to any company. In addition, it includes, the option of alternative suppliers which can be an essential aspect in determining the power of the dealer. Suppliers are known as third get-togethers in this industry, and they are labeled in two groupings. The first group makes the major parts for the merchandise. This group is not strong because of the availableness and easy of replacing the items they make, such as batteries, cable connections, screens and other interior components. In contrast, the second group provides correct parts and important programmes such as flash-memory and DRAM. This group is strong for their special and advanced products, as well as having less choice products (Nistor, 2010). There are some suppliers who dominate the marketplace; for example, Intel, Microsoft and Sony. So, it's important for Apple to truly have a good relationship with its suppliers.
Power of the buyer
The buyer's bargaining electricity is very high on the market because opponents offer a variety of similar products with competitive prices. The Apple Company faces a average threat from potential buyers because they have a great deal of products that consumers can choose from. Furthermore, the threat of buyers comes from their demand for new features in Apple products. However, there are a big number of companies that offer similar products and there may be quite a large differentiation in cost and performance. Therefore, loyalty is often shown towards a particular brand because there aren't many differences in the product quality and price between brands (Nistor, 2010). Purchasers tend to be more delicate to brand alternatively than price. Apple's customers are individuals, education departments, enterprises, government authorities and creative customers. So, the variety of consumers and their needs has a direct impact on Apple's future strategies.
Threat of substitutes
The technological environment is changing fast every day. There aren't many substitutes in this industry as a result of high-tech features. However, alternatives are always available from rivals. If various other company such as BlackBerry, Yahoo, Samsung or Microsoft produce new technology or the same kind of telephone at a lesser price or with an increase of features at the same price, then this is a problem for Apple (O' Grady, 2009). Customers usually have a tendency to turn to the most advanced technology instead of traditional methods. Apple has the ability and successfully to create and develop its own hardware and application software to become unique and distinctive from its rivals.
The competition in this industry is high, almost in every regions of business, due to continuing need to provide services on a regular basis. Competitive prices, new products, design improvements and technology are the key factors that Apple has to contend with other international companies on, such as IBM, HP, Acer and Dell. The consumers' options also change; some prefer to save lots of some cash somewhat purchase powerful specification technology plus some prefer the hottest technology. So, the result is the fact that companies put into practice different strategies; for example, low-cost and best-cost strategies. Some manufacturers offer products at the lowest price so that they can cut their costs by disregarding everything except some basic features. Various other companies in the centre cost range, such as Dell and Horsepower, focus on getting customers by offering differing prices. And the top of the number companies, like Apple, gain customers through their high quality products, features and innovative design, making their products popular across the world (O' Grady, 2009).