Management strategy of Apple Case Study Example | Topics and Well Written Essays - 1750 words

Management strategy of Apple - Case Study Example This research will begin with the presentation of the threat of new entrants. Even though there are great opportunities for emerging companies to compete in the personal computer industry, it is controlled by the five super powers; Apple, Sony, HP, Dell, and Gateway. Hence, Apple plays in an oligopolistic market environment. Probably, the significant challenge to the industry would be a large number of mergers and buyouts prevailing among these industrial movers. They are able to bring together their cost on research and development in order to gain an advantage over others. This process leads to greater competition between the smaller organizations which try to create superior products and bigger companies which generally take up the smaller ones to develop their competitive edge. Implementation of anti-trust agreements within the computer industry does not allow imposters to introduce products of similar types into the market, and so the threat of substitute products and services i s not significant within the industry. On the other hand, the issue that creates a greater threat is the global production of computers. Today, the United States of America is the leader in producing computers in the industry with Japan and Europe as the other key players in the industry. Unlike the other industries where suppliers hold a power over the manufacturers, the computer industry allows the manufacturers to hold a significant amount of power over suppliers. Here the suppliers are competitive in order to maintain exclusive association with the manufactures for supplying their products. And so, they are always forced to adjust their prices or associate with larger firms for surviving the competition. 4. The threat of the bargaining power of buyers The bargaining power of buyers determines the effect that a company’s customers can have on the profitability of the business. Even though the computer industry is getting harder day by day, customers do not possess a greater bargaining power, and hence that does not drastically impact the industry. 5. Industry Rivalry When observing the computer industry with regard to the industry rivalry, it is found that the above said five leading manufacturers are in competition to bring out the most efficient and least expensive machines. Strategic Group Mapping Firms belonging to same strategic group will be having two or more competitive characteristics in common, like selling in same price/quality range, covering same geographic areas, being vertically integrated to same degree, having comparable product line breadth, etc. Obviously, as Huff, Floyd, Sherman and Terjesen (cited in executivemanagementskills.com) point out, firms operating under the same strategic group may possess some common competitive features such as pricing policies, product diversification, and level of vertical integration. Following is the strategic group map for the computer industry (see figure 1). Strategic Group Map (Figure 1. Source: Bamford and West, 123). 2. Apple’s Strategy Apple uses a corporate-level of strategy of competing on many different levels. As Boddie states, Apple follows a comprehensive corporate level strategy through which it competes on different levels.