Porter's Industry Analysis - Case Study Example

Creative, Samsung and Sony and a plethora of other companies manufacture small, portable music players which is an answer to apple ipod, since ipods are quite expensive people prefer buying other reliable music players which are way cheaper than the ipod. Barriers to Entry: Some of the most important points which should be considered under this section are as follows: Time and Cost of Entry Knowledge Economies of Scale Technology Other Barriers Fake Stores in China: “Recently it was found that there are several fake stores of apple in China, the fake apple products are bound to cost the company losses.” (Fake Apple Stores in China) Several big companies have lost a lot of money because of counterfeit products sold by the fake sellers. These fake stores will directly impact the credibility and the profits of the company, today there are fake stores in China, and tomorrow fake stores may open up in European countries. This will severely impact the brand name of the products and it will also hamper the reputation and the profits, this is a huge barrier and Apple must do something about it. “The favorable brand perception had also increased sales of Macintosh computers. So iPod gives the company access to a whole new series of segments that buy into other parts of the Apple brand. Sales of its notebooks products is also very strong, and represents a huge contribution to income for Apple.” (Apple SWOT) Threat of New Entrants: The following points must be considered under threat of new entrants: Verizon allows streaming audio and video with the help of a software called v-cast New entrants equipped with disruptive technology could affect apple significantly Bargaining Power of Suppliers: Intel, IBM, Motorola and others are big rivals of apple when it comes to processors and computer technology, it could give the new ipad and the iphone a good run for its money Sony, Warner, BMG and others are huge suppliers of music ABC, Fox, Sony and many others are huge suppliers of movies and popular television shows Bargaining Power of Customer: Peer to peer technology provides free music to the customers Distributors may press apple to reduce its price or for better terms Economic downturn will lead to decreased spending of customers Substitutes Present a Substantial Threat: Satellite radio is becoming increasingly popular for music Xbox and the PS3 provide great entertainment, media and music can be enjoyed on these gaming consoles Dvds and Cds provide an alternate source of movies and music Theaters, cable tv and other sources are alternate sources for movies and videos Recommendations for apple: Maintain the same quality but bring down the prices a bit Joint ventures would surely prove profitable plots Focus on knowledge management Open more stores so that customers can easily get their hands on the latest products Work at making the technology better, innovation is the key to success. References Apple has More Money than the US Government (2011). Tech News. Retrieved from ... Read More