help with proj 4 due in 24 hours

Tool analysis

Name

University

BMGT 495

Professor

September 7, 2022

Introduction

Business-level strategies show how companies will compete in their strategies. Some of the business-level strategies include focused cost leadership, focused differentiation, differentiation, and cost leadership. Some companies provide unique products while others keep their prices low. This project explains how organizations develop their strategies to safeguard their competitive positions. It also evaluates the competitive position of Apple Inc. and integrates information from Porter's Five Forces, Competitive Profile Matrices, External Factor Evaluation matrix, and a partial SWOT.

Industry Analysis

Porter's Five Forces Analysis

The threat of New Entrants

New competitors can join a specific industry if the threat of new entrants is low. Industries with strong barriers have a low threat of new entrants while those with weak barriers have a high threat of new entrants. The money costs other companies to enter a specific market and the time to enter determines whether there are high or low threats of new entrants (Dess et al., 1984). The threat of new entrants is relatively low in the online services, software services, and consumer electronics industries. The effect of the Threat of New Entrants is weak on the consumer electronics industry because new entrants might not expand the scale of their businesses easily. There are high capital requirements in the consumer electronics industry.

The threat of New Entrants is moderate to Apple Inc. because of high capital requirements and the costs associated with brand development. High capitalization is required to start a company to compete with Apple Inc (Ketchen et al., 2013). It is expensive to build a strong brand that competes with Apple. Some firms; however, have the financial capacity to enter the consumer electronics industry. These include Google.

Threat of Substitution

Customers can switch to alternatives if there are close substitutes in the market. The threat of substitution reduces the attractiveness of an industry. It also reduces the power of suppliers. Substitute goods used in place of the products of a company pose a significant threat to the company's products (Dess et al., 1984). Companies can increase prices if there are no close substitutes. If there are close substitutes, the companies do not have much power to increase their prices.

The threat of substitution is weak in the consumer electronics industry. Consumers have to rely on products such as tablets, laptops, computers, and televisions. There are no close substitutes for consumer electronics. Households have to rely on consumer electronic products. The threat of substitution in the consumer electronics industry is; therefore, very low (Ketchen et al., 2013). About the focal company Apple Inc., the threat of substitution is also weak. The threat of substitution is low because of the limited features of products competing with Apple's products. Substitutes of Apple products tend to have low performance. Consumers prefer Apple products because of their advanced functions and convenience.

Bargaining power of suppliers

This refers to the ease of suppliers driving up the input costs or prices. Supplier power is driven by the strength and size of suppliers, the uniqueness of the products supplied, and the number of suppliers. If there are few suppliers in an industry, they will have more power (Dess et al., 1984). Those who provide unique products and services will also have more power.

The bargaining power of suppliers in the consumer electronics industry is weak. Suppliers have low bargaining power because they are many. There are many suppliers of consumer electronics materials across the globe. Companies in the consumer electronics industry are few while the suppliers are small and many companies (Ketchen et al., 2013). About Apple Inc., the bargaining power of suppliers is low. The bargaining power of suppliers is a weak force because the company has access to many suppliers. A large number of suppliers reduces the bargaining power of suppliers.

Buyer Power

This assesses the ease of buyers to lower prices. Buyer power is driven by the cost incurred by buyers to switch from one organization or supplier to another, the significance of each customer, and the number of buyers (Dess et al., 1984). The bargaining power of customers in the consumer electronics industry is a weak force. Bargaining power is low because of the relatively few differences in the prices of various goods in the industry. About the focal company Apple Inc., the bargaining power of customers is strong. Customers have high bargaining power because of low switching costs. They can shift from one company to another because of the high availability of information.

Competitive rivalry

This refers to the capability and number of competitors in a specific industry. Market attractiveness is significantly reduced by a large number of competitors. Companies will have a lower power if many competitors are offering similar products and services (Dess et al., 1984). Competitive rivalry is a strong force in the consumer electronics industry. High competition in the consumer electronics industry is because there are no switching costs.

Apple Inc. faces strong competitive rivalry. There are companies such as LG, Samsung, and Microsoft that compete with Apple. Strong competitive rivalry is caused by the aggressiveness of companies in the consumer electronics industry, low product differentiation, and low switching costs. Companies are aggressive in terms of advertising and rapid innovation (Dess et al., 1984). Products offered by companies in the consumer electronics industry are almost similar. Customers can switch from Apple to Samsung or Microsoft without incurring costs. They can switch because of accessibility, function, and prices. This increases the level of competition within the industry.

Competitive analysis

Apple Inc. faces high competition from rivals such as Samsung, Microsoft, and HP. The companies produce quality products for consumers of different preferences, tastes, and incomes. Samsung manufactures various electronic products such as tablets, TVs, smartphones, and home appliances. The company also manufactures cameras, speakers, printers, monitors, hard drives, and semiconductors. Samsung has stores in Korea, Canada, the United States, and India (Li, 2021). The company's products are; however, sold worldwide. Samsung is a close rival of Apple Inc. in the manufacture of smartphones. Samsung phones compete with iPhones. Samsung focuses on customization and versatility while Apple Inc. focuses on simplicity. The company has a larger market share than Apple on smartphones. Samsung produces more affordable phones than Apple. Samsung targets customers aged between 15 and 45 years and willing to follow technology trends.

Samsung has assembly plants in more than 74 countries.

The company is a global enterprise because it operates in more than 200 locations (Li, 2021). Microsoft, Samsung, Apple, and HP are all global companies. Their products are sold worldwide. Due to global outsourcing, effective distribution networks, and a global presence, Samsung is a major competitor of Apple Inc.

Microsoft is also a close competitor because it offers mobiles, gaming Xbox, office, and windows. The company competes with Apple in segments such as smartphones, computers, and operating systems. Microsoft's strengths are brand reputation, loyalty, and distribution channels (Li, 2021). The weaknesses of the company include poor investments and security flaws. Microsoft leads in cloud computing and software. Office and Windows are the most dominant office productivity software and desktop operating system respectively.

Apple Inc. focuses on both hardware and software. There are various product categories of Apple's business model. These include home and accessories, wearables, services, iPad, Mac, and iPhones. Home and accessories and wearables include Apple Watch, Apple TV, iPod touch, and Air Pods. Services include digital content or App Store, cloud, and AppleCare (Yie et al., 2021). Apple's largest revenue contributor is; however, the iPhone. Apple targets middle and upper-income consumers with the ability to pay higher prices because of a better user experience.

HP company deals with scanners, 3D printers, monitors, laptops, and computers. HP is a top company because it has a significant market share in laptops and computers. HP provides high-quality products at low prices. On the other hand, Apple provides products that have exceptional quality but with premium pricing. HP is a strong competitor of Apple's MacBook. The company competes in terms of prices while Apple Inc. competes in terms of innovative products (Yie et al., 2021). Apple's products are priced higher than HP's products. HP targets those who are in the business industry. HP is; however, smaller than Apple Inc., Samsung, and Microsoft in terms of market share.

The competitive analysis shows that there is strong competition against Apple Inc. The competitors are at parity based on their global presence, distribution networks, and technology. There are differences in economies of scale as companies such as Apple Inc. and Samsung produce a higher quantity of goods (Yie et al., 2021). Apple Inc. faces competition in terms of the quality of products and innovative technologies from all the companies.

Critical Success Factors

1. Technology

Companies in the consumer electronics industry have to invest heavily in technology. They should come up with innovative technologies to stay competitive. Consumers are likely to purchase innovative products that solve their problems. Companies such as Samsung have invented voice recognition technology to convert voice messages to text (Ketchen et al., 2013). By inventing new technologies, companies in the consumer electronics industry can increase their market share significantly because they get new customers.

2. Global presence

It is important to sell products all over the world. Companies with a global presence are likely to succeed because they do not rely on a specific country for operations. They exploit the economies of global scale and scope (Yie et al., 2021). Companies with a global presence access new markets and maximize knowledge transfer.

3. Personnel

Employees are a critical resource for companies in the consumer electronics industry. Companies can provide their employees with opportunities for creativity and development (Ketchen et al., 2013). They can provide a good workplace for the employees to enhance their creativity. The level of production increases significantly if employees are motivated to work.

4. Operations

Companies offering electronic products and services succeed if they can manage and control goods and services effectively. They can remain profitable if they manage their activities seamlessly. Companies can produce quality electronic products if they manage operations effectively (Ketchen et al., 2013). They can meet customer expectations of quality. Companies can increase their revenue and achieve customer satisfaction.

5. Online presence

An online presence allows companies to build their brands and attract new customers. Companies can build trust with customers and increase awareness by having an online presence. They can showcase their products and services by having an online presence (Yie et al., 2021). Companies in the consumer electronics industry use their online presence to post photos of their newest products.

6. Product Quality

Product quality affects the success of companies. Product quality is required in the electronics industry to avoid product defects, variations, and product failure. Customers demand high-quality electronics products. Product quality builds trust with the customers, fuels recommendations, and results in few customer complaints (Ketchen et al., 2013). Customers are unlikely to return products when companies deliver high-quality electronics products. Companies can raise prices if they gain the loyalty and confidence of their customers.

7. strategic focus

Companies should have a strategic focus to achieve their greatest competitive advantage. Strategic focus explains what a company does best, its values, mission, vision, goals, and value proposition. Apple Inc. focuses on product differentiation. The company differentiates its products based on advanced functionality and attractive design (Yie et al., 2021). Samsung focuses on creating superior products while Microsoft focuses on product differentiation.

8. customer loyalty

Customers in the electronics industry enjoy quality products. They engage with products with a friendly touch, 3D technology, and flexibility in design. Companies can enjoy customer loyalty if they consider user experience while designing their products (Yie et al., 2021). Some companies such as Apple Inc. have many loyal customers because of the quality of their products and unique features.

Competitor Profile Matrix

	Apple Inc.	Samsung	HP	Microsoft
Critical success factor	weight	Rating	score	Rating	score	Rating	score	Rating	score
Online presence	0.2	4	0.8	4	0.8	3	0.6	3	0.6
Technology	0.15	3	0.45	3	0.45	2	0.3	3	0.45
Customer loyalty	0.11	3	0.33	3	0.33	2	0.22	2	0.22
Global presence	0.1	3	0.3	4	0.4	2	0.2	3	0.3
operations	0.14	2	0.28	2	0.28	1	0.28	3	0.42
Product quality	0.14	4	0.46	3	0.42	2	0.28	4	0.56
Strategic focus	0.05	1	0.05	2	0.1	2	0.1	1	0.05
Personnel	0.11	2	0.22	2	0.22	1	0.11	1	0.11
Total	1	-	2.89		3		1.81		2.71

The Competitor Profile Matrix was developed by assigning weights to the critical success factors. Weights ranging from 0 to 1 were assigned to the critical success factors. The rating in the Competitor Profile Matrix was assigned according to the performance of companies in each critical success factor. The score was the result of the rating and the assigned weight.

The CPM shows that Samsung has the highest weighted score while HP has the lowest weighted score. The order of the companies from the highest to the lowest weighted score is Samsung, Apple Inc., Microsoft, and HP. The Competitor Profile Matrix shows that Samsung performs better than Apple Inc and Microsoft.

Partial SWOT Analysis

There are various threats affecting companies in the consumer electronics industry. The threats include aggressive competition, increased labor costs, tariffs, the slowdown in the consumer electronics market, and falling prices. Companies in the consumer electronics industry face stiff competition. They compete in terms of product quality and prices. Companies are always researching to identify new areas of improvement (Ketchen et al., 2013). Tariffs affect companies in the consumer electronics industry because they operate on a global scale. Some companies such as Apple Inc. and Samsung are likely to face tariffs as they export products to other countries. There have been increased labor costs because companies have to pay more salaries and wages. the consumer electronics industry also slows down due to the lack of product innovation. The prices of various electronic products reduce because of increased competition.

The opportunities for the consumer electronics industry include customer growth, the development of new products and services, the internet, strategic partnerships, and mobile advertising. There will be significant growth in mobile advertising markets. The number of customers is likely to increase as those in developing countries can purchase electronics products (Yie et al., 2021). The internet provides an opportunity for companies in the consumer electronics industry to conduct research and sell various products and services. Companies can form strategic partnerships with others to increase their growth. They can focus on new products and services such as cloud services.

OT Table

Threats	Opportunities
Aggressive competition	Customer growth
Increased labor costs	Development of new products and services
Slowdown in the consumer electronics market	Strategic partnerships
Tariffs	Mobile advertising
Falling prices	Internet

External Factor Evaluation (EFE) Analysis

	Apple Inc.
External factors	weight	Rating	score
Opportunities
Customer growth	0.11	3	0.33
Development of new products and services	0.30	2	0.6
Strategic partnerships	0.06	2	0.12
Mobile advertising	0.21	4	0.84
Internet	0.06	1	0.06
Threats
Aggressive competition	0.03	4	0.12
Increased labor costs	0.08	2	0.16
Slowdown in the consumer electronics market	0.03	1	0.03
Tariffs	0.1	1	0.1
Falling prices	0.02	1	0.02
Total	1	-	2.38

The EFE matrix was developed from the opportunities and threats. Various weights and ratings were assigned to the opportunities and threats. The score was calculated by finding the product of the ratings and weights. The scores were summed to find the total. The score for Apple Inc. was 2.38. This meant that Apple's strategies are not fully effective and the company needs to make improvements.

Conclusion

The analysis has explored the external and internal factors affecting Apple Inc. and companies in the consumer electronics industry. It has identified the threats facing companies in the electronics industry using porter's five forces model and SWOT analysis. The analysis shows that Apple Inc. performs better than Microsoft and HP. However, companies such as Samsung achieve better performance. Apple Inc. should capitalize on opportunities and reduce existing threats.

REFERENCES

Dess, G. G., & Davis, P. S. (1984). Porter's (1980) generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal, 27(3), 467-488.

Ketchen, D. J., & Short, J. (2013). Mastering strategic management. Saylors Academy.

Li, Y. (2021). Apple Inc. Analysis and Forecast Evaluation. Proceedings of Business and Economic Studies, 4(4), 71-78.

Yie, C. E., Zhi, C. E., & Ping, N. T. S. (2021). A Critical Analysis of Internal and External Environment: Case Study of Apple Inc. Journal of International Business and Management, 4(10), 01-14.