This scientific paper aims to study the electric computer industry, where Apple Inc. will be used as an example of the company. The five main driving forces of this industry are the level of competitiveness, the possibility of new entrants to the market, the strength of suppliers and buyers, and the threat of replacement products. The analysis of these topics can help companies and researchers to determine the vector of the direction of activity in order to avoid negative trends and obtain the most significant profit and positive results. There are many opportunities for further development for this industry. At the same time, there may also be threats that need to be predicted to minimize their consequences. The computer industry is currently quite large and has a high profit. This is due to the fact that more people are buying personal computers or developing their activities in this area. Thus, the computer industry is engaged in the development and creation of electronic computers (Campbell-Kelly et al., 2018). These technologies help to perform many different valuable actions. For example, they provide the ability to store programs and data about them, access to their free editing by the user, and the use of programs. Among the main products of this industry are digital, analog, and hybrid computers, microcomputers, minicomputers, and personal computers. The study showed that the industry’s profit in 2021 amounted to almost three hundred and nineteen billion dollars (Figure 1). This also shows the stable position of the sphere, characterizing it as a high-intensity industry.
Apple Inc., which is an example in this paper, provides users with many options for its products and services. Computer systems and their components are among the most popular items of the company. Moreover, they allow the company to remain competitive by maintaining a positive image. Among the products can be distinguished “computer software, computer peripherals, personal laptops (Yie et al., 2021). Henceforth, the company has an excellent external position in the market.
Porter’s 5 Forces
For more profound knowledge in the studied topic, it is necessary to use Porter’s Five Forces. This approach is determined by the allocation of specific five forces. These forces are defined as aspects that shape every industry and help determine weaknesses and strengths. Moreover, this method is used for many different spheres of life and can help in the formation of a more successful strategy and the process of making important decisions. In the case of the computer industry, this research method will help determine the competitiveness in the market and increase the profitability of the organization.
Competition in the Industry
The first factor that requires detailed consideration is the level of competition in the industry. Thus, in the computer industry at the moment, there is a relatively high degree of rivalry between different manufacturers. Various companies are constantly improving their projection to provide the most helpful device for users. Apple Inc. holds one of the leading positions in this field. It “has good potential in profitability as in 2019, the company increases 2 percent from the previous quarter and increases 4 percent in earnings per share” (Yie et al., 2021, p. 7). Of particular importance to the competitive position is the financial component, that is, the level of profit of the company and the commitment and loyalty of customers (Hussein & Hartelina, 2021). In addition, most of the manufacturers in the computer industry are engaged in conquering the Western and Asian markets.
Potential of New Entrants into the Industry
The second aspect is the potential for new companies and manufacturers to enter the computer industry. For the computer manufacturing industry, the probability of new entrants entering the market is quite low. Firstly, this is because high financial costs are required to start a new company working in the computer industry (Senvar & Akkartal, 2018). Secondly, there are multiple costs for development, recruitment, data security. Companies that are already operating and successfully closing their targets in the market can use economies of scale, which allows them to produce large volumes at lower costs. On the other hand, in order to achieve this high performance, a much larger infrastructure is required for the most successful functioning. Thus, if companies do not have a tremendous amount to invest, they cannot enter the market.
Power of Suppliers
The following valuable force for the company is the strength of suppliers. However, in this field of human activity, its value is low, but with growth or decline, it can considerably, affect the functioning of the industry. Moreover, this factor is facilitated by the fact that the number of suppliers is sometimes sufficient, as well as strength and investment in the sphere. In this case, financial strength also matters, which determines the prevalence of the company. The intricacy and, at the same time, simplicity lies in the extraction of the necessary goods and the expenditure of such resources in production, such as raw material suppliers.
Power of Customers
It should be emphasized that the power of buyers must not be underestimated because it directly influences how successful a particular company will be in the computer industry. The main aspects that can affect this force are a limited number of well-known brands, the quality of technologies and services, as well as a number of other factors. These include marketing and advertising. Investigated as an example, Apple Inc. is popular all over the world (Yang, 2020). When releasing a new product, there are immense queues in front of brand stores. Thus, in this case, buyers bring the company financial profit and a competitive position.
The Threat of Substitute Products
The threat of the appearance of substitute products is one of the most apparent problems, whose importance has recently increased significantly. This is since more manufacturers are focusing on development in the computer industry. Moreover, the driving force, in this case, was the growth of mobile technologies. Yang (2020) emphasizes that “enormous evidence indicates that many companies tend to focus only on the positive side of innovativeness such as increasing customer loyalty, and ignore potential threats derived from negative customer responses to new products” (p. 443). At the same time, it also has a negative meaning, since fewer and fewer people are attracted to a computer, which is a new phone or tablet. The intensity of the last two points seemed severe for people and manufacturers in the current time and others are medium. The possibility of entry of new buyers by salespeople is not particularly dangerous as it is characterized by a low level of opposition to adverse conditions. Thus, having studied the computer industry, it can come to a conclusion by stating that it is necessary to attract measures for a sound and well-thought-out policy.
References
Campbell-Kelly, M., Aspray, W., Ensmenger, N., & Yost, J. R. (2018). Computer: A history of the information machine. Routledge.
Computer market revenue in the world from 2016 to 2021 (in billion U.S. Dollars). (n.d.). Statista.
Hussein, F., & Hartelina, H. (2021). After sales service for smartphone Iphone to customer loyalty. APTISI Transactions on Management (ATM), 5(1), 62-72.
Yang, Z. (2020). The impact of brand innovativeness on customer loyalty-Take Apple Inc. as an example. 2020 4th International Seminar on Education, Management and Social Sciences, 443-448.
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).
Senvar, O., & Akkartal, E. (2018). An overview to industry 4.0. International Journal of Information, Business and Management, 10(4), 50-57.