Current Market Conditions Competitive Analysis
Current Market Conditions Competitive Analysis
Strategic planning requires clear comprehensive information about competitors. One of the first factors needed is knowledge of the market a firm is in and what their product is. This includes knowing their supply and demand, the competitors, potential customers, and potential buyers. Other factors include competitiveness and long-term profitability related to price elasticity, technological innovation, and cost structure. Last, this discusses the factors affecting variable costs and fixed cost and how these change supply and demand for labor. This paper will discuss such factors about Apple and the iPhone. Apple
Apple was established in 1976 by Steven Wozniak and Steven Jobs. The company’s first product was the Apple I, which did not invoke much interest. Later in 1977 and 1978, Apple débuted the Apple II and received greater popularity. By 1980 Apple had grown and had several thousand employees (Apple History, 2013). In 2013 Apple presented the iPhone 5 with many capabilities including retina display (an Apple only product), a long battery life, an A6 chip that runs the phone fast and smooth without losing the battery life, and millions of apps ran only through Apple that can guard against virus’ with its own malware (Apple.com, 2013). Monopolistic Competition
Apple holds the monopoly over certain products, like the iPhone, but does have competition from companies like Samsung, who have the Android products. Apple works in the market structure of a monopolistic competition. Other companies have similar products, but they have slight differences, making them competition. Consumers are required to make the decision on which product they want to purchase from which company. Much advertising exists to try to convince the consumers why they should or should not purchase a product from Apple and their competitors (Colander, 2010). There are a number of factors that may affect the supply and demand of the prices in the market that Apple operates. Consumers directly affect the supply and demand of a product, as their desires need to be met in order for them to purchase a product. As consumers show the need for a certain product, like the iPhone, the demand curve will change, and move toward the right. When the price becomes lower on a product that consumers desire, the demand will rise. When a product has elasticity, it will steepen the slope of the curve. As products become out-of-date, and the desires of the consumers change, new products are released. When this happens, the demand curve for the old products shifts. If consumers do not feel as if a product is priced correctly, they may not purchase it. This will affect the revenue for the company, and potential consumers may go elsewhere for a similar, yet less expensive product (Colander, 2010). Issues and Opportunities
The Apple iPhone is a brand known around the world and is sought out by almost all ages and varying levels of technological intelligence. The iPhone is a unique brand to review for price elasticity of demand and technological innovation. The demand for this product is significant and thus the standard values to monitor this segment micro economically changes. First, take a look at Apple Inc.’s technological innovation. The company has two major hurdles that it continually must battle to be successful. The first is the rapid advancement of technology in a monopolistic competition. The second is the expectations of its customer base. There is a significant amount of competitors within this market that are constantly dueling to be cutting edge or have the latest technology. The other is the customer base and their requirements to have a product that satisfies their needs and wants for his or her everyday lives. The uniqueness that Apple has is that they are a luxury product maker and thus must provide a product that tips the...
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Apple.com. (2013). iPhone Facts. Retrieved from http://www.apple.com/iphone/why-iphone/.
Boundless. (n.d.). What Affects the Demand for Labor?. Retrieved from http://www.boundless.com/economics/factors-of-production-costs-and-markets/factors-affecting-the-demand-for-labor/what-affects-the-demand-for-labor/
Dediu, H. (2013). How much does it cost to manufacture an Iphone?. Retrieved from http://www.asymco.com/2012/02/22/the-iphone-manufacturing-cost-structure/
Colander, D. C. (2010). Economics (8th ed.). Retrieved from The University of Phoenix eBook Collection.
Fixed Cost. (2013). Retrieved from http://www.investopedia.com/terms/f/fixedcost.asp
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