Apple position in the ecosystem of smartphone industry

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Reference no: EM132196317

Below is a detailed explanation of the critical competitive forces (and their underlying dynamics) in the smartphone industry that may threaten Apple based on a relevant five-forces analysis and other concepts.

Porter's five forces analysis is a very useful methodology to analyze the external environment effect on any organization or industry. By applying the external five forces, we can easily determine the after effects of those forces on the specific organization. Five forces of porter's analysis on mobile phone industry are as follows.

Competition rivalry- As number of competitors are consistently increasing, quality of the competitors for Apple is also consistently increasing in the specific market segment. As couple is dominating in its field and having availability of better brand identity, competition rivalry is getting intense as Google as also launched its devices in the market.

Supplier Bargaining- Availability of many suppliers has a directly decreased the bargaining power of the suppliers as apple is able to take the supply from different suppliers which reduces their overall pardoning power. Any of the organizations are directly importing goods from China and manufacturing them into their own facility and availability of vast options has reduced the overall power of supplier bargaining.

Customer bargaining- As apple has relatively high-class products and does not negotiate with its prices, customer bargaining power is also very less as compared to other Smartphone manufacturers.

Below is a detailed explanation of the potential for new entry and/or effective substitute competition, based on a relevant blue ocean strategy analysis and other concepts.

Threat of new entrants- This is the most prominent part for Apple. As increment in the number of new entrants in the specific market segment has definitely reduce the overall impact of the Apple or dominating the specific market. As apple has increase number of new entrants in the market, ability of different factors as well as other mobile phones have greatly reduced the overall impact of apple over customers.

Substitute threats- Substitute including a Google pixel and other ranges such as Samsung Galaxy range has been threatening the Apple sales by a huge margin. These Android mobile phones are indirect competition with apple in terms of providing service as well as having an understanding of the market and providing large range of products.

QUESTION:

An explanation of the strategic implications of the competitive forces identified above: what are the opportunities and threats to Apple's position in the ecosystem of the smartphone industry that it must factor into its strategy for the future, based on the above analysis, and why?

Reference no: EM132196317

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