The essence of the five-force, competitive analysis is to examine whether one mi

Question

The essence of the five-force, competitive analysis is to examine whether one might find it attractive or not to compete in a given industry, and where, specifically, there might be “dominant positions” within an industry, and to identify the forces that shape the potential to make money in an industry, given a particular “competitive position.” That is, how will you win? (How will you create unique value?)

QUESTION:

A detailed explanation of the critical competitive forces (and their underlying dynamics) in the smartphone industry that may threaten Apple based on a relevant five-forces analysis and other concepts. Be sure to explain how and why you've focused on the critical forces that you've identified.

A detailed explanation of the potential for new entry and/or effective substitute competition, based on a relevant blue ocean strategy analysis and other concepts. Be sure to explain how and why you've focused on a particular new entry or substitute threats to Apple.

Explanation / Answer

Porter's five forces analysis is a very useful methodology to analyse the external environment effect on any organisation or industry. By applying the external five forces we can easily determine the after effects of those forces on the specific organisation.

Five forces of porter's analysis on mobile phone industry are as follows.

Competition rivalry

As number of competitors are consistently increasing, quality of the competitors for Apple is also consistently increasing in the specific market segment. As couple is dominating in its field and having availability of better brand identity, competition rivalry is getting intense as Google as also launched its devices in the market.

Supplier Bargaining

Availability of many suppliers has a directly decreased the bargaining power of the suppliers as apple is able to take the supply from different suppliers which reduces their overall pardoning power. Any of the organisations are directly importing goods from China and manufacturing them into their own facility and availability of vast options has reduced the overall power of supplier bargaining.

Customer bargaining

As apple has relatively high class products and does not negotiate with its prices, customer bargaining power is also very less as compared to other Smartphone manufacturers.

Threat of new entrants

This is the most prominent part for Apple. As increment in the number of new entrants in the specific market segment has definitely reduce the overall impact of the Apple or dominating the specific market. As apple has increase number of new entrants in the market, ability of different factors as well as other mobile phones have greatly reduced the overall impact of apple over customers.

Substitute threats

Substitute including a Google pixel and other ranges such as Samsung Galaxy range has been threatening the Apple sales by a huge margin. These Android mobile phones are indirect competition with apple in terms of providing service as well as having an understanding of the market and providing large range of products.

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