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The industry chosen to analyze is the Smartphone industry, also notable the hardware and software development industry. The organization will be Apple Inc. As they are the most noted today for their iPhone, where it has become a household name. Where the iPhone has gained so much steam that statics wises about one in five people in the United States own an iPhone.
Defining Apple Inc. As an oligopoly is kind of an easy task to accomplish given the amount of their competitors which, in this case, is only about eight. These competitors are Apple, Samsung, Nokia, Sony Erricson, HTC, LG and Motorola, Blackberry. Most notably Samsung would be their largest competitor. Entry into this market is very low now that all these firms are at the top of their game. They all have copyrights that are constantly getting offset by one another. Samsung and Apple sue each other back and forth in different countries gaining different results for their infringement of each other.
So any new competitor in the market has to be weary of the different companies in this market. Their design has to be flawless in nature and not go as close as to duplicate on purpose or accident any of these makers’ products that are already available. It would be so easy for any of these companies to squeeze out the new competition as they usually team up against one another in efforts to hurt productivity. As the consortium mainly made up of Apple and Microsoft and a few smaller firms calling itself Rockstar has done mainly against Google and Samsung. So the competition is fierce and any firm entering into this market has to bring a new breed of a smart device to the table.
To the best observation Apple Inc. would be recognized as an Oligopoly. The definition of such a market structure is an industry with really only a few firms that stand to put out product for that type of industry. They closely resemble a monopoly, but they actively compete against the other big firms out there. Recognizing probably Microsoft and Samsung as the other two firms that stand a great output when compared to Apple.
Another example is when in 1997 Apple and Microsoft announced a collusion with each other to support each other in marketing products. The joint venture lasted for more than a decade in which Microsoft had held Apple’s hand and saved them from utter destruction. Microsoft needed to keep Apple afloat, probably because Microsoft was targeted in a large anti-trust suit recently that same year. That helped to solidify Apple’s staying power in the market and help keep the United States government off their back. Afterward it is business as usual competition against each other. This time it is in the Smartphone industry.
In a perfect competition industry, there would be a large number of firms attempting to put out their version of smartphones, at a low-cost rate and high-profit rate. It is unknown how the industry would react to this. At first the phones would be new and innovative. After a while though because research and development would raise, and sales would plateau. One would say that the smartphone industry would be stagnant at best, producing just the bare minimum. Though it would be easier for a firm to enter into the market, in this case, the output would not be optimal. Relying on the fact your brand of smartphone will stay supported in the years that follow. So even after newer versions of the software and hardware are made available. There would be no real guarantee that that would happen.
In a strange twist, you could also consider Apple a monopolistic competition as well, but this only pertains to their computer side. The definition is an industry that contains many competing firms each with a product that, for the most part, is the same with slight variations to their product. Granted these are not identical products, so the cost varies based on different designs, but they are all identical in that they sell computers that require the same components. Each different firm puts their software on that product, but the features are basically all available on each type product.
In a monopoly, this industry would suffer greatly, they would barely have any competition and the open market. Which would leave them to become less innovative and competitive. Driving down production while increasing costs, having other firms in the market breeds way for innovation and constant restructuring of the products.
Possible marketing strategies would be first and foremost the differentiation strategy. Apple already being on this path they are starting to put out new products that people will buy because they love all their products. Such as the new Apple watch, the iPad is always a favorite. Then they have the iTunes store and the app store that connects to the Apple store. All these products are marketing in such a large way, selling more than what another company has done in their position. The only addition would be to pour more money into research and development to keep on differentiating themselves from their competitors.
Next on the list is the differentiation focus, the company to keep on gaining steam. They have had a unique ability to keep up with customer demand. While at the same time putting out a product that has for the most part not let consumers down. They were the first in their field to put out the products that they offer now. There is no stopping what they have become it seems. The brand itself is so different from others; you can spot Apple technology from a mile away. From a sleek design to the Apple logo on the back or front of just about all their products it is hard to escape Apple’s allure.
So what about Apple exactly signifies their product? First and foremost their touch screen. If it’s Apple, there is a great chance that it comes with an easy to use a touch screen. The second less noticed, but probably more important feature is their operating system on their smart devices. The ease of use and access, barely any loading time, and the almost lack of viruses or product failure is what keeps the customers coming back. About twenty years ago there was never so much faith in any company that you see today for Apple. Customers would go out and buy one product from Sony, and then go out and buy another product from Sharp and not think anything of it. All this combined with almost a pristine reputation, (until recently come. that is), keeps customers coming back and probably will keep them coming back for years to.
In all honesty, Apple employs just about all aspects of competitive strategies in one way or another. The cost leadership could also account to how they buy products from one country that is in economic turmoil and go to another country that is ready and willing to manufacture their product for pennies on the dollar. Their need to keep the cost of the products low is something they must do, being that their products are in such high demand they run out of them faster than can produce them. There is no praise for how they have done this but makes sense they would have to. Nearly being forced to by their consumers to find a way to put out a product that is as inexpensive as possible. So, they can maximize profit and keep overhead low.
The end result is a product that is as low cost as it possibly can be. The asking price for their products is somewhere in the median range of three to six hundred dollars. With serious steps taken to make their brand stand out from all the others. Though the steps taken may not always be admirable to reduce the cost of their product. That being said Apple is on a constant rise with stock shares going through the roof. They have not seemed to hit their half-life even now the innovation in Apple products keeps on churning out. With no end in sight, some speculate that they will be worth in the trillions of dollars in years to come.
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