A consideration of Porter’s 5 Forces analysis model can provide some insight into the micro-environmental factors impacting APPLE.
A Formula for Customer Growth
Each New Apple Product is innovative and has a high value proposition. These are core competencies of Apple that align perfectly with what customers value. As a result, Customers are Overwhelmingly Satisfied, because their expectations have been met or surpassed. This causes an attachment to the brand and ultimately, Customer Loyalty.
This now means that there is a higher likelihood of Purchasing Future Apple Products, each time something new is released.
In short, each time a customer goes through this loop, customer satisfaction and loyalty is further enhanced.
See Diagram Below:
There are 5 main Uniqueness Drivers that helps Apple maintain its Competitive Advantage.
- One of the most innovative and transformational pioneers of all time- Steve Jobs. A true visionary- Planted the seeds that made Apple who it is today; iPod, iPhone, Tablet;
- Highly protected IP: Harmonization of hardware and software products
- Distinctive competencies in innovation, quality, ease of use, style
- 82 billion in cash reserves enables them to lock in supplies and carry no debt.
- Rapid growth in demand for Apple products
- Product launches create immense brand exposure and hype.
- Loyal customer base
- Made shopping for electronics an experience
- Customer demand at times exceeds supply of products
- Some Apple stores struggle to keep up with influx of customers
- Opportunities to expand to emerging markets and push sales of Mac’s and iPhones
- Opportunity to Expand the Apple TV segment
- Other well established competitors in each of their segments are quick to follow Apple’s innovation
- Competing operating systems
- Intense competition for ad revenue, Apple’s app advertising platform; iAd competes with Google’s AdSense
- Battle for patents and lawsuits creates negative publicity and affects the share price
- Replica Apple store in China
As we proceed with our own lives, let us remember the inspirational people like Steve Job’s, who has motivated us to explore the vast potential within each one of us.
He has undoubtedly left a mark on this world, and hopefully his words can leave a mark on you.
“We’re here to make a dent in the universe. Otherwise, why even be here?” (Qtd in the movie Pirates of Silicon Valley)
“Your time is limited, so don’t waste it living someone else’s life.” (2005 commencement speech)
“Innovation distinguishes between a leader and a follower.”
“Don’t be trapped by dogma, which is living with the consequences of other peoples thinking” (2005 commencement speech)
There was also an arrogant side to Steve.
To Bill Gates: “We’re better than you are! We have better stuff.” (Qtd in the movie Pirates of Silicon Valley)
However, this side of him was overshadowed by pure brilliance.
STEVE JOBS, (1955 – 2011)