Apple Inc. is one of the leading companies in the world when it comes to the design, development, and sale of technological devices. The company is the leading company and only competes with Samsung in the global scene when it comes to smartphones in the US market. According to Seitz (2018), the company has been facing challenges that have led to a decline in its stock sales. This raises the question of how the company will be performing in 2019 and if it will go back to its $1 billion valuation that it had in 2018.
The Behavior of the Firm and the Industry
The global smartphone market has Apple competing with Lenovo, Huawei, and Samsung
Samsung is the largest company holding a market share of about 20% in the world.
Apple is the second largest smartphone producer selling over 200 million phones worldwide.
Apple has a market share of about 15.6 % as per the 2018 report.
Market Structure
Apple maintains an oligopoly market structure
Global Environment
Apple operates in a monopolistic competition as the global environment has many competitors who find it easy to enter the market due to the low entry barriers.
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The suppliers have strong bargaining positions due to the few numbers of suppliers
The consumers have a strong bargaining position due to the low cost of searching and switching to the competitors ( Smith, Betts, & Smith, 2018) .
Role of Technology
There is a rapid and sustained technical progress characterized by electronic components becoming better, faster, and cheaper creating the opportunity to improve the devices.
The business model of the company is built on innovation by coming up with new products aimed at increasing the competitive advantage of the company ( Khan, Alam, & Alam, 2015) .
Resource Market the Company Faces
Apple outsources most of its manufacturing services from companies such as China with the aim to reduce costs.
Outsourcing comes with many challenges that emanate from labor relations to the cost of these materials.
Regulatory Environment
Factory conditions
Antitrust campaigns
Privacy issues around the globe
Patent issues
References
Khan, U. A., Alam, M. N., & Alam, S. (2015). A critical analysis of the internal and external environment of Apple Inc. International Journal of Economics, Commerce, and Management , 3 (6), 955-961.
Seitz, P. (2018, December 17). 2019 Outlook: Will The Coming Year Be A Lost One For Apple Stock? Retrieved from https://www.investors.com/news/technology/apple-stock-2019-outlook/
Smith, K. T., Betts, T. K., & Smith, L. M. (2018). Financial analysis of companies concerned about human rights. International Journal of Business Excellence , 14 (3), 360-379.
