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Current Market Conditions Competitive

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Current Market Conditions Competitive Analysis

Strategic planning requires clear comprehensive information about competitors. One of the first factors needed is knowledge of the market and what their products entail. This includes understanding supply and demand, competitors, potential customers, and potential buyers. Additional factors include competitiveness and long-term profitability related to price elasticity, technological innovation, and cost structure. This discusses factors affecting variable costs and fixed costs, and how they relate to supply and demand for labor. Team C will be discussing such factors in relation to Apple and the iPhone 5S.

A history and description of Apple, Inc. and the iPhone 5s. Apple, Inc. started in theory in 1971, when two friends began creating new and different technologies. In '76 Apple Computer was born, which began selling the Apple I computers, and in '77 started selling the Apple II, a personal computer. In '78 the Apple Disk II, a floppy disk, in '79 the Lisa was created, and in '80 the Apple III. The computer market was very small so they did fine considering.

In '83, Jobs envisioned higher expectations for the company's profitibility and success, leading to the recruit of Sculley, Pepsi-Cola's president. In '84 the Macintosh was created, however, the company remained in financial hardship. In '85 Sculley and Jobs were in disagreement of the company's direction, forcing Jobs to resign from Apple. During this time, Windows and IBM became a threat as they were copying the style and functions of Apple products. In '87 the Mac II was created, and in '90 the Mac OS, to combat the Windows systems. The company went back and forth from an overnight success to barely being able to keep its doors open.

In '91 the new PowerBooks were created providing a faster and more robust operating systems, additional memory, and a sleeker look, and in '94 the PowerMac was released. In'95, Apple Computers realized its potential in creating new and improved technologies; however, they were not equipt to make products. With 1 billion dollars of product on backorder and the release of Windows '95 system, Apple took a big hit forcing them layoff of one fifth of the company's workforce. Between '96-'99, Apple brings Steve Jobs back in hopes of helping the company make a rebound. They partnered with neXt and rhapsody to create new and exciting programs. These productes created the first multi-quarter consecutive increase in profits; the longest the company had seen to date.

In '00 Apple released the G4 cube, a complete disaster. In '01 they added the ability to copy and rewrite CDs. In '02 the flat panel iMac was created, but even with its popularity the company had a steady loss of 45 million dollars. In '03 the bottom line improved by creating the very successful G5, along with iTunes. Within the next few years the company released mulitple generations of iPods even the iPod Mini, and over 70 million songs downloaded from iTunes.

In 2008 the iPhone was created and contracted to AT&T, however non-customers found ways to use the phone on any network with different jailbreaks. In 2011 Verizon was approved to support the iPhone, and in 2013 T-Moblie. The iPhone quickly gained the reputation for being one step ahead of all other technologies. Apple stated, 'iPhone 5s is purposefully imagined. Meticulously considered. Precision crafted. It's not just a product of what's technologically possible. But what's technologically useful. It's not just what's next. But what should be next' ("Iphone 5s", 2013).

The copycat products on the market affect supply and demand. The prices of each, the greater the demand with slightly less supply gives the ability to raise the price. However, if competitor prices drop, they must also lower prices and create more reason to buy their products. The market for the iPhone 5s is endless; anyone who deals with cell phones is in the market including potential customers and potential buyers.

Apple's product portfolio attracts consumers worldwide appealing to a wide array of people including business professionals, college students, teenagers, and children. Although, some more than others, each Apple product has seen success and high demand within the industry holding a lead on their competitors, such as Samsung and Microsoft. With the recent launch of the iPhone 5S, Apple maintains a strong presence in the smartphone market; however, certain elements must be considered for Apple to maintain their competitiveness and long-term profitability.

Price elasticity of demand measures change of quantity demanded as a result of a price change (Colander, 2010). In evaluating the iPhone 5S, some may consider the device to be a luxury, making it an elastic product. However, consumers are finding smartphones to be a necessity these days as they are used as a primary source of communication for majority of people. According to Pearson-McNeil (2013), the rising number of smartphone users claim that their devices assist them in being more productive and efficient with their time. It provides navigation, access to the Internet, and the ability to complete work right from their smartphone.

Apple holds an advantage in the fast paced evolution of smartphones as they not only manufacture their devices, but also develop the operating system for their products. This allows Apple to have full control of the user experience provided to their customers. Based upon the trends of prior iPhone launches, the iPhone 5S is expected to deliver a record breaking launch while maintaining the same price points of $199.99 (16GB), $299.99 (32GB), and $399.99 (64GB). As Apple prepares for the launch of the iPhone 6, they will drop the pricing of the iPhone 5S because it will become less desired and more elastic.

Technological innovation is essential for Apple to maintain their competitive edge in the market. They were the game-changers that revolutionized mobile technology with the iPhone, iPod, and iPad, forcing competitors to step up and follow suit. However, have they become victims of their own success? With the launch of the iPhone 5S, consumers are not impressed with the innovation of the new device, or lack there of. Apple and Samsung continue to compete with faster



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