Porter’s Five Forces Essay

1686 Words Sep 5th, 2011 7 Pages
1(a) Critical external and internal environmental factors that has a strategic implication for Apple’s future
When relating to the external factor which has a strategic implication for Apple’s future, it can be best described using Porter’s five forces.
Threat of new entrants

Threat of substitutes
Bargaining power of suppliers
Bargaining power of customers
Intense competitors at current state

Porter’s Five Forces Current rivalry: Apple faces an intense and fierce competition in the PC market, which has a very low switching cost. Competition comes from IBM, Dell, HP and Toshiba. In the multimedia solutions category, initial companies such as Napster and Kazaa was the main rivals to Apple’s iTunes and iPod but due
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One of the critical aspects of internal factors which caused Apple a huge drawback was the loss of the exclusive rights to interface design, due to a poorly negotiated contract. With this loss Apple was now in a position in which it needed to gather d its resources and fight a battle toward standardized software as consumers wanted compatible operating systems and the Macintosh ran exclusively on Mac OS, a system not available to other computers. It allowed Microsoft to take opportunity in having successive versions of Windows operating system to use graphical user interface (GUI) similar to Mac. (Hitt, Ireland, & Hoskisson, 2011). But the positive sides are to be mentioned as well. For example, the leadership strength of Steve Jobs has brought Apple to the level it is from the brink of wipeout, with his ambitions, dreams and desires to control the market in its competitive path. (Brian, 2010). Relating to resources and innovations within firm, Apple believes in developing their own hardware, operating systems, applications and development tools suite (Brian, 2010).

1(b) Apple’s strategy against industry rivals Apple’s strategy stands up against industry rivals because of selective diversification controlled and integrated system which is seen in their products such as iPod and iPhone and their stand alone application, iTunes for the music lovers and the applications for phone users. Apple also focuses on getting the share of

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