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Apple Case

Apple computers held a strong position in the PC industry throughout many years, flourishing in the 1980’s. Competitive advantages and minimal competition helped the company keep that strong position for years. As the PC industry structure changed, that strong position was now diminishing. The future success of the company will require sound planning and innovative thinking.
Apple’s competitive advantages have been to be known for creating computers that are easier to use, easier to network, and more versatile than those of the competition. Apple is able to provide customers a full package of products to fill their needs such as software, hardware, and accessories, which will be compatible with the computer. Providing this reliability of compatibility created a loyal group of Apple users. Another area that can be seen as a competitive advantage is the proprietary software that Apple computers use, which prevents competitors from copying the product completely.
The PC industry has changed drastically. To begin with, the threat of new entrants in the industry is somewhat low. Economies of scale allow current PC companies to produce at lower costs than potential new entrants. The high amount of capital needed to produce computers also reduces the number of potential entrants. Government policy helps protect Apple from new entrants due to the propriety software that is protected under the law. One other factor that lowers the treat of new entrants is the expected retaliation by established companies towards them.
The bargaining power of suppliers in the PC industry varies. The suppliers of items such as screens, disk drives, keyboards, and memory chips have a low bargaining power because there are a wide number of them to choose from. On the other hand, suppliers of microprocessors do have a higher bargaining power due to there being only few large suppliers. The processors they produce are a critical part of the computer company’s success. The...