TASK 1: Describe the industrial structure of your chosen industry and considering economic theory, discuss the extent to which the industry operates in a competitive manner. What implications does this have for the operation and strategy decisions of your company (50)
Surveys have proven that over the years the demand for digital music has increased by manifolds. Apple iTunes' market entry strategy into the UK is more likely to succeed if carried out with much more concentration on customer satisfaction and value creation fronts while at the same time focusing on a market penetration pricing strategy coupled with incremental growth strategies in niche market centric operations (www.apple/tunes.com).
Apple i-tunes digital music company is in an oligopoly market with limited number of competitors including Sony, Warner, BMG and so on. Oligopoly is a market form where there are a few number of suppliers with similar identical products. Thus the digital music industry is evolving very fast. There is always the threat of a new company introducing something totally new to the market such as wireless technology that could replace the need for a physical music player. It's of paramount importance for Apple iTunes to invest a lot in research, and development and marketing in order to keep up with other companies that could introduce newer products to the market. Apple iTunes could improve the quality of their products. Then due to the greater quality of their music files, manufacturers of MP3, 4, 5 players would be compelled to manufacture their products to make them compatible with these files, because customers would be lured to buy Apple iTunes as they are of superior quality. The popularity of iPod and Apple Mac are subject to demand. If economies are negatively affected the demand for these products would fall.
However customer's interests change often. There is a possibility that a new company might come up with a totally new innovation and thus the demand for Apple iTunes may drop. In fact Apple i-tunes Company as in the oligopoly market requires strategic thinking unlike other market forms in the market such as perfect competition, monopoly and monopolistic competition. In fact oligopolistic competition can provide different range of outcomes. In some cases firm may employ trade practices that are restrictive. In other situations, competition between sellers in an oligopoly market can be relatively low prices and high production. There is always a threat to Apple iTunes from other manufactures who manufacture inferior quality music files at low cost and also the creation of pirated digital music (Presswire, 2007). Customers might be lured to buy these products as they cost less. Other substitutes such as Satellite radio for music, Entertainment media, media and music alternative sources for videos (cable, broadcast) and alternative means to acquire music (Music CDs, DVDs) are potential threats. Thus this could lead to an efficient outcome approaching perfect competition. However the competition in an oligopoly industry can be higher when there are more firms in an industry if, for instance, the firms were only regionally based and did not compete directly with each other.
According to the behavior of the oligopolistic market, firm has to face a kinked demand curve at the existing market price for its widgets (products). In this scenario suppliers do not have the tendency to increase the price, because other competitors in the industry would not follow ...
Cite this document
(“Apple I-tunes Case Study Example | Topics and Well Written Essays - 2250 words”, n.d.)
Retrieved from https://studentshare.net/business/293688-apple-i-tunes
(Apple I-Tunes Case Study Example | Topics and Well Written Essays - 2250 Words)
“Apple I-Tunes Case Study Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.net/business/293688-apple-i-tunes.
From the two readings, Steve Jobs is different from Mary Kay. From the outset, it is difficult to directly compare these two individuals since they are running two different organizational structures which demand different control strategies.
This research informs about Apple Inc. which was founded in 1976 by Steven Wozniak and Steven Jobs. The writer of the research highlights that the mission statement of the firm points out: “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software”.
Another prominent advantage was Apple’s attention to design elements. Building products from the ground up allowed Apple to implement innovative design elements that created a loyal customer base. One considers the iMac released in 1998 with its eggshell design as prominently implementing this technique.
The two individuals were Steve Jobs and Steve Wozniak. They started off with a computer launch which led to introduction of series of products later. Steve Jobs and Apple have a history amongst them and he is considered as one of the best pioneers and entrepreneur the world has seen in recent times (Muller, 2011).
Apple Case Study Answer 1 The products of the company being high on quality as well as innovative features are highly demanded by consumers of all age and sex. Most of the consumers in the developed markets like USA, Canada etc. highlight that the usage of Apple’s products provides them with a style quotient while, customers of the developing markets attach the usage of this product as a symbol of status among their peers.
Apple is a pioneering company in the field of high end gadgets. The company lays its foundation on the pillars of innovation and development of new products. The company has invented the products such as, iPhone, iPad, iPod and the Mac and is one of the most admired brands in the whole world.
This is the highest market cap in the world and was over $200 billion for second placed Exxon. This high market cap can be attributed to several factors. The first is the release of the highly successful iPhone 5 with the iPhone being the company’s most profitable product.
The author of the report states that Apple could further develop its iTunes and music player technology into a mobile phone format. A device of this nature has already been developed by Motorola. It’s called the Rokr mobile phone. It has an advanced camera system, stereo speakers, and a color screen.