Apple 2012

1. Apple competitive advantage

Apple’s competitive advantages are its innovation (Pioneered the first usable PC, cutting edge design and user experience), strong brand equity and rapid growth.

1. PC industry Analysis

• Industry rivalry (degree of competition among existing firms):High

There is intense competition that leads to reduced profit potential for companies in the industry.

1. Dell : struggle with cost controls and poor margins
2. HP : Outsourced most its production to Asia , declined margins and eroded market share
3. ACER

• Threat of substitutes (products or services)- moderate to high

High availability of substitute products limit apples ability to raise prices:

• emergence of Laptop led to the average selling price (ASP) to decline by 25 % in three years (2009-2011)
• The economic downturn of 2009  help notebook category sales  took  off
• 2011  appreance of high performance Ultrabook and low performance tablet (cheap alternative to power PC for web browsing )
• Smartphones
• Game consoles

• Bargaining power of buyers-High

1. Home buyers –50% of all sales, Price sensitive, valued design, conductivity buy from “white box” channels
2. Small-medium business (SMB)- value price , service support , buy from superstores
3. Corporate - value price , service support , buy directly from manufactures
4. Education - value price , service support plus software availability
5. Government - value price , service support

Powerful buyers have a significant impact on prices

• Bargaining power of suppliers- High

Powerful suppliers can demand premium prices and limit Apple profit.

Microprocessors- price stabilized:

• Intel –dominant the market with 80% of the market
• AMD -19.6%

Operating System: