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Porter's Five Forces Model

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by

Melissa Pan

on 20 January 2014

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Transcript of Porter's Five Forces Model

Apple --- Porter's Five Forces Model
Threat of New Entrants:
(weak)

Introduction:
- About 100 known smartphone companies around the world.
- haven't create high threats to Apple.
- Most of the companies were previously in the technology industry.
Investments
(high)
$100 million USD
1000 employees
30 months
Distribution Channel:
(high)
Dealer Stores:
E-Commerce:
Apple Store:
Numbers:
421 stores in 14 countries
Global Sales:
$16 billion USD (2011)
Average Cost to Open an Apple Store:
$8.5 to $10 million USD
Bargaining Power of Supplier:
Weak
Apple's Suppliers:
more than 200 suppliers in 2013

each contributes to a small % of
final product

supplies not unique
Economy of Scale
(large)
Apple vs. Suppliers
no significant threat of
forward integration

supplies are cheaper to
make than to buy
Unique
Purchase are made in small volume
Number of buyers is large
Bargaining Power of Buyers -

Weak

No significant treat of backward integration
Inter-Firm Rivalry:
Medium
iPhone is a unique product.
design

system: iOS vs. Android

hardware qualities
Industrial Life Cycle: Maturity
Unequally Balanced Competitors
High Exit Barrier
total assets of 207 billion USD
421 retail stores in 14 countries
80 000 employees
largest market cap of 498.4 billion USD
- very hard for firms to
achieve apple's eco-
nomy of scale
Faxconn Plant in China for Apple
- IPhone is the current trend for the public
High demand
- Material: aluminum
- Cost: $199
- Material: Plastics
- Cost: $239
Competitive Retaliation
(high)
- Ongoing lawsuit between technology companies due to the high value market. ($200,000,000)

Apple sued Samsung for $1.05 billion over 4 patents
Threat of Substitute:
Laptop:
(low)
Tablet:
(medium)
Switching Cost:
(high)
Market:
(shrinking)
Switching Cost:
(low)
Market:
(growing)
Strategy:
Function:
iPhone:
Communication
+ Multiple features
Laptop:
Work
+ Multiple features
Price:
$1449.99
$ 719.00
Operation System:
ios 7: Apple's lastest operation system
Windows 8: Microsoft's lastest operation system
2013 dropped 12.29%
2014 are expected to drop 7.15% from 2013
laptop + PC market are expected to shrink
Portability:
- Height: 11 inch - 6.5 inch
- Width: 8 inch - 3 inch
- Weight: 0.68 kg - 0.49 kg
- Height: 4.87 inch
- Width: 2.31 inch
- Weight: 0.112 kg
Price:
$ 719
16 GB
$ 229
$ 499
$ 499
Tablet are expected to grow and replace tablet+ PC
2013 tablets had a growth of 50%
2014 tablets are expected to have a growth of 46.74%
2013 Moblie phones only had 3.33% of growth
switching costs are high
buyers are well informed about the seller's costs
Full transcript