Apple iPhone's Competitive Environment - Case Study Example

Name Tutor Course Date Apple Case Study Questions Part 1 Question 1: Competitive environment Apple iPhone faced in 2015 Using the Porters Five Forces model, it is easier in analyzing the competitive aspect of Apple iPhone on how to sustain its profitability. These five porters’ forces are essential in measuring the cost effectiveness, competitive intensity as well as the attractiveness of the product in a market. The five porter’s forces include a threat of new entrants and substitutes, bargaining power of customers and suppliers and finally the industry rivalry. Threat of new entrant: the Apple iPhone has to consider the incoming firms entering into the technological innovation and production of electronic devices. The entry of new companies in the industry would influence the competitive approach of the Apple iPhone. Back in the year 2015, the Apple iPhone made a supernormal profit and hence attracted other companies to enter into the industry. Various players in the electronic technologies and especially in the telecommunication focus in obtaining a share of the advanced industry. The Apple iPhone is supposed to consider enhancing product differentiation to improve in quality. Some of the features in the iPhone product are supposed to be patented to ensure the entrant rival companies do not copy the production procedure. Furthermore, the Apple iPhone has to ensure customer loyalty to the brand, and hence, establishing a market niche. Therefore, the competitiveness of the company would be maintained even after entry of new companies in the industry. Threat of substitutes: the existence of other companies providing similar services like Apple iPhone exists in the market. Substitute products tend to increase the propensity of the customers changing and switching to alternatives. This depends on the performance of the substitute and cost associated with the product and services obtained. The Apple iPhone has the mandate of ensuring the services provided meets the customer's demand (Malhotra 3). It would help in increasing the competitive advantage and hence eliminating the possible substitutes in the market. Poor quality and substandard product contribute in losing the market inch by a greater margin. The Apple iPhone has to consider maintaining and considering an innovative approach to improving its quality and standards. Therefore, it is essential for the Apple Company management to ensure the high-quality production of iPhones to achieve high performance. The Bargaining power of customers: this is the ability of the customers putting the firm into pressure and hence influencing the customers’ sensitivity and the price changes. The customers tend to engage the Apple iPhone on the availability of the iPhones in the market. The nature of the pressure relates to the level of the output that the firm can produce. The existence of other firms producing similar substitutable produce is a threat to the competitiveness of the Apple iPhone. It is important to consider the connection existing in the market switch and how the firm should relate to customer royalty. Also, the bargaining power of the customers is supposed to be held by developing buyer price sensitivity. The Apple iPhone is supposed to introduce essential distribution channel connecting to the royal customers. The bargaining power of the customers should be controlled through enhancing the output with essential attributes and prices meeting the customer's demand within stipulated time. The Bargaining power of suppliers: this aspect focuses on the market inputs. The company depends on the suppliers in obtaining the raw material essential in manufacturing the products. The Apple iPhone uses specified quality to meet the customers’ specification. It is essential to consider the competitive aspect through focusing on the innovative source of raw material that would ensure iPhones meets the customers’ standards. The input cost and differentiation also contribute to Apple iPhone initiating mechanisms to compete effectively. Industry rivalry: the Apple iPhone has to focus on the competitive intensity in the industry and how to develop a framework and mechanism to emerge victoriously. In the telecommunication and electronic devices manufacturing, the Apple iPhone has set appropriate strong ground that ensures its competitive advantage. The achievement is based on the setting powerful competitive strategies, promotion and advertising the iPhones and sustainable innovations. Question 2 Strategy Canvas Framework and Business model of Apple According to the performance of the Apple Company, it is essential to focus on the factors that contributed to its productivity and achievement. The business model expressing the performance is directed by the Canvas framework that relates the output depending on sales and productivity. The firm experienced high productivity and output in the year 2015 after introducing the iPhone into the market. The company focuses on the innovative manufacturing after due diligence on the market needs and the gap. In filling the gap, the strategic measures were focused on the quality and differentiated raw material to manufacturers. High-qualified professional in the IT management and engineering concentrated on producing a high quality product to meet the customer's demand. The objective of the firm was based on the filling the gap in the market with a favorably priced product. According to the market response, the firm captured the global market with the iPhones and hence enjoying the high profit. This shows strategic measures and objective helped the Apple Company to achieve the customer's demand and hence competitive advantage. Relating to the business model, infrastructure, offers, customer, and finance segment shows the performance of the Apple Company. Under the infrastructure aspect of business model, the company considers core responsibilities, partner network and value configuration. The infrastructural approach helps in considering partnership network whereby the firm considers engaging other essential companies for distribution. This covers the suppliers of raw materials, professional engineers, and the distribution channel. Value configuration is based on the innovation mechanism and framework. The value of the iPhones is based on the infrastructural development and innovations. Offer segment constitutes value proposition whereby the firm has to develop measures to improve on the product. The Apple Company considers developing the essential strategic measures to improve the quality of the iPhones to achieve the customers demand. Therefore, the value proposition helps in setting the values that aligns with the customer demands. The customer segment assesses the customer relationship and distribution channel connecting targeted customer. The approach provides the customer relationship with the product. The company has to ensure the customer feedback are valued and incorporated in the manufacturing of the iPhones. The Apple Company has to establish appropriate distribution channel that would avail the product to customers. The distribution has to ensure the products gets to the customers on time and in good condition. The targeted customers provide the market for the Apple Company. The customers are essential in defining the market inch. Therefore, the customer segment in the business model provides the framework in defining the target market. Finance is the last aspect of business model whereby the cost structure and revenue streams. The cost structure indicates the cost of production from outsourcing the raw materials, and other expenditures related to manufacturing. The company has to consider all the costs and expenses related to the production, distribution and marketing. On the other hand, the revenue stream is as a result, sales volume and profitability. The sales per unit help in assessing the profitability of the firm. The Apple Company has to consider defining the level of sales in terms of profit. The units of sales were high up to over 25 million units (Malhotra 10). This shows that Apple Company had 25 million devices sold globally. The market response indicates the competitiveness of the firm and large market size. The rival companies in the industry cannot compete with Apple as it has established its market inch and customer royalty. The company enjoys the wider market and hence focusing on the economies of scale mechanism in production and manufacturing. The channel of distribution is essential the products are supposed to get to the customers within the stipulated time. The organization has set all mechanism that focuses on realizing the customers demand and need. The quality of the product, differentiation and cost are among the factors that Apple Company relates. The company has a connection with the different distributing firm to ensure the products gets to the customers in good condition. Part 2: Question 3 Performance Model The performance of Apple in 2015 was based on setting appropriate strategies that aligned towards the achievement of the positive outcome. The management of the firm focuses on relating the basic consideration in the market to enhance their competitiveness. The innovation, technology and large customer base helped the firm to perform competitively in 2015. Basing on the performance measurement pyramid has different segment in stages. Starting with the key process of the organizational unit covering CSFs and KPIs demonstrates the achievement of the firm. The CSF (critical success factor) helps the firm in setting appropriate strategies in achieving the organizational mission. It is essential for the management to develop appropriate mechanisms to set the organizational goals. KPI (key performance indicator) helps in measuring values essential in demonstrating the effectiveness of the firm in achieving the objectives. It is essential in using the KPI measures to evaluate the success of the firm on the set targets. The Apple Company has developed appropriate mechanisms through the KIP and CSF approaches are essential in achieving the firms’ performance. The second segment is divided into two aspects in the strategic goals of the firm covering CSFs and KPIs of the entire organization. The other aspect considers the unit goals by focusing on the lower levels. The Apple Company has developed the strategic measure and goals relating to the firm performance projection. The unit goals are designed depending on the different units such as departmental targets. The firm has these strategic measures to ensure a comprehensive approach in enhancing the performance. Strategy segment in the performance measurement pyramid indicates the organizational process and channels to achieve higher performance. The Apple firm has to develop the approaches that would enhance the achievement of the firm’s performance. The processes and channels connect to the goals and objective of the firm. The final stage of the performance measurement pyramid is the mission aspect. The Apple firm is supposed to have clear goals and objectives connecting to the organization productivity. The mission statement indicated the value, ethics and moral approach of the firm. These value, ethics and moral principles are essential in defining the firms approach in achieving the organizational objective and goals. Therefore, the performance measurement pyramid helps in defining the performance model that connects to productivity of the firm. The marketing and promotion approach is essential for the company to increase its competitiveness. The latter is realized based on the rate at which the firm establishes itself in the global market. Company relates to the achievement and economies to scale in meeting the demand. Proper mode of marketing through advertisement sets the basis of the customers’ response. The online and offline advertisement mode has enabled the firm to attract customers from different regions. The response of the customers has helped the firm to concentrate on the quality and diversification to achieve their demands. The business model of Apple indicates different products that capture the international market. Diversification has enabled the firm to concentrate on improving quality through innovative manufacturing. The growth of technology has contributed to the extensive production. Apple in 2015 indicates the mechanisms and framework essential in achieving competitiveness. The firm has set its priorities depending on the strategic measures and objectives to ensure the achievement in terms of productivity and performance to compete effectively. The Apple has to consider the performance measurement pyramid through developing an appropriate mechanism to realize its objectives. Therefore, the business model helps in relating the business performance and how it achieves the goals and objectives. Work Cited Malhotra, Sapna. "Apple; Can It Grow Any Further?" Case Study (2015): 1-14. Print. Read More