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Assignment DSM 401: Consumer Behavior

Name IC No. Student ID Lecturer

: Lam Wai Kit : 921020-08-5475 : 09-201012-00003 : Mr. Jalaluddin

No. Faculty of Business Management. Lam Wai Kit.Why should a consumer want to buy Apple Phone brand instead of Samsung Phone brand? Prepare by. Cosmopoint International College of Technology Ipoh. . Jalan Sultan Idris Shah. 30000 Ipoh Perak. 68.

ACKNOWLEGMENT On the very outset of this report. Jalaluddin for conscientious guidance and encouragement to accomplish this assignment. help. Without their active guidance. LAM WAI KIT . I would like to extend my sincere & heartfelt obligation towards all the personages who have helped me in this endeavor. I would not have made headway in the project. who has always supported me morally as well as economically. cooperation & encouragement. Any omission in this brief acknowledgement does not mean lack of gratitude. I am extremely thankful and pay my gratitude to my faculty of Business Management for their valuable guidance and support on completion of this project in it is presently. my gratitude towards my friends and colleagues. I also acknowledge with a deep sense of reverence. I extend my gratitude to Cosmopoint International College of Technology Ipoh for giving me this opportunity. Thank You. I am ineffably indebted to Mr. At last but not least gratitude goes to all of my friends who directly or indirectly helped me to complete this project report.

TABLE OF CONTENT PAGE Title Page Acknowledgement Table of Content List of Table List of Figure .

is considered to be the most successful electronics company in the world. .. Amazon. Microsoft Corporation. Consumer electronics. Sony Corporation and many others. Inc.1 Company Profile Name Industries served Geographic areas served Headquarters Current CEO Revenue Profit Employees Apple Inc. Ltd. Computer hardware.733 billion (2012) 72.0 Apple Profile Apple Inc. Apple Inc.S..508 billion (2012) $ 41. which designs. Lenovo Group Limited.800 (2012) Samsung Electronics Co.com. Inc.. consumer electronics and software. Table 1. International Business Machines Corporation. manufactures and sells personal computers.CHAPTER 1: INTRODUCTION 1. LG Electronics. The company has experienced a tremendous growth from 2001 when it has introduced its iPod mp3 player... HewlettPackard Company. Dell Inc. and provides related services. Tim Cook $ 156. Digital distribution Worldwide U. Computer software.. Cisco Main Competitors Systems. is an American multinational corporation. Google Inc.

Competitors moves in online music 7.000 margin 43. Apple is a leading innovator in mobile 3. Strong financial cash. Decreasing market share device technology 3. Obtaining patents through acquisitions 6. Android OS growth 8. Strong dollar 7. Damages from patent infringements 6. High price expanding closed ecosystem 2. Strong growth of mobile advertising market market 8. Brand reputation 5. Further changes in management gross profit 6. 2013 tax increases 3. Breached IP rights application processors 5. Retail stores 6. Defects of new products 7. Customer loyalty combined with 1. Strong marketing and advertising teams Opportunities Threats 1. iTV launch 2. Rapid technological change 5 2.000. Incompatibility with different OS Weaknesses 2. Patent infringements performance 5.0 Apple SWOT Analysis 2013 . Price pressure from Samsung over key 4.9% and no debt) 4. 4. Increasing demand of cloud based services Table 2. Long-term gross margin decline ($10. Emergence of the new provider of 4. Rising pay levels for Falcon workers 3. High demand of iPad mini and iPhone 1.000. Growth of tablet and smartphone components markets 5.CHAPTER 2: SWOT ANALYSIS FOR APPLE PHONES Apple SWOT analysis Strengths 1.

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5 billion and was the second most valuable brand in the world in 2012. First.000. 5. software and products that are interlinked and support each other. in turn. buying back company shares and other matters.9%. 6. well designed. Apple is a leading innovator in mobile device technology. which increases due to Apple’s closed ecosystem. 3. Besides. Apple’s stores are one of the most profitable in terms of sales/ft2. Marketing is one of the strongest functional areas Apple has. this has now changed. Brand reputation. It can sell pricier products. Apple brand is valued at $76. Second. is supported by customer loyalty. Strong financial performance (RM 10. 2. which can be used for acquisitions.000. new products and supplements will be released soon (iTV). Apple has a reputation of highly innovative.000.Strength 1. Apple has a strong customer loyalty. It also has higher gross profit margin than its main competitors. Strong marketing and advertising teams. and well-functioning products and sound company performance. which is equal to 43. provide direct contact with knowledgeable staff and increases brand awareness. Apple’s financial performance is one of the best among many companies. While at first Apple’s closed ecosystem was a weakness for the business. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage. Third. Company’s core competency of producing innovative products is the strength the company builds upon and is able to bring the most innovative products to the market. Company currently (end of 2012) holds about $10. Retail stores.000 cash. . Apple has been chosen as the most innovative company in the world for the 3rd time in 2012. hence expanding the ecosystem. 4.000 in cash.000. build superior stores (they are more or less built to achieve marketing goals) and advertise their products in a compelling manner. Customer loyalty combined with expanding closed ecosystem. Apple’s retail stores ensure high quality customer experience. Apple now has a full range of apps.9% and no debt). gross profit margin 43. which. Company has no debt and is not directly affected by interest rates or credit markets.

Apple’s products cost much more than its competitors devices.Weakness 1. Incompatibility with different OS. Apple products price becomes a weakness because consumers can easily opt for similar quality but lower price products. The less market share Apple has. Patent infringements. 7. 3. Defects of new products. the less it can influence its potential customers and persuade them to jump into using Apple’s closed ecosystem products. Decreasing market share. This damages Apple brand and its financial situation. Long-term gross margin decline. 4. When there’s such a fierce competition. The firm is often accused of infringing other companies’ patents and has even lost some trials. Scott Forstall and John Browett (chief of retail) left the company too and this will have an impact on company’s management. 6. Apple has lost Steve Jobs in 2012 and Tim Cook became the new CEO. Some of Apple’s iPod and iPhone releases had clear faults and thus disturbed sales of the products and firm’s reputation of superior product performance. as many think. Hence. will be negative. Further changes in management. Some critics argue that the price is not justified. This is not current Apple weakness but one that jumps out time to time. both in software and hardware. Current Apple’s gross margin is one of the highest in the tech industry but analysts fear that due to increasing component prices and competition current margins will not be sustained. 5. 2. The iOS and OS X are quite different from other OS and uses software that is unlike the software used in Microsoft OS. which. Due to such differences. users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware). High price. glooming firm’s future financial performance. .

when Apple will seize upon the opportunity of being less dependent on its direct competitors. iPad mini sales will increase Apple’s market share in the tablet market and. In addition. Emergence of the new provider of application processors. 7. Apple has to find a new source for the component but could not find a suitable one yet. Thus. 2. 6. Samsung. collecting the damages from the companies that do so is a viable opportunity to not only increase the cash reserves but to damage the competitor’s reputation and sales as well. iTV launch. Strong growth of mobile advertising market. new manufacturers with superior engineering capabilities are arising and it’s just a matter of time. Obtaining patents through acquisitions. Nonetheless. Apple could expand its range of iCloud services and software as the demand for cloud-based services is expanding. Apple patents are often infringed by its competitors. which allows advertising on Apple iPhone. 8.Opportunities 1. Increasing demand of cloud based services. Damages from patent infringements. High demand of iPad mini and iPhone 5. Growth of tablet and smartphone markets. is also the only provider of application processors for Apple’s products. Apple lacks of some patents to sustain its growth and the best way to acquire those patents is to acquire the firms holding them. iTV launch will support Apple TV sales and the products’ ecosystem. iPad and iPod touch. Apple could develop new skills and competencies. will strengthen firm’s competitive advantage. . The growth of mobile advertising market is an opportunity which could be further seized upon. the main Apple’s competitor. 3. 4. Growth of tablet and smartphone markets is a good opportunity to expand firm’s share in these markets. Apple has developed iAd advertising platform. 5.

Foxconn is the main manufacturer of Apple products and the rising pay level for Foxconn’s workers will likely raise the prices for Apple products. Price pressure from Samsung over key components. Rapid technological change. 6. Wal-Mart and online music subscription companies. Android OS growth. even Apple hasn’t unveiled any plans for the new products (except iTV) and may lack new introductions to keep up with competition. while weakening Apple at the same time. Samsung has already asked Apple to pay higher price for its application processors. This is especially hard when a company wants to introduce something new. One of the most severe threats Apple and the other tech companies are facing is rapid technological change. Due to intense competition and no viable substitutes. The one that cannot keep up with the competition soon fails. Strong dollar. 2. . Apple was able to bring very innovative products to the market so far but for the moment. 5. Pay levels for Foxconn’s workers already rose 3 times from 2010 to 2012. 7. Apple earned more than half of its revenues from outside US. Competitors’ moves in online music market. Rising pay levels for Foxconn workers. Dollar appreciation against other currencies reduces potential profits from those countries. The companies that breach Apple patents might not be discovered soon and may benefit from it. Tax increases in USA in 2013 will negatively affect Apple. innovative and successful. Companies are under the pressure to release new products faster and faster. Android OS is the main competitor for iOS in mobile device market. Breached IP rights. such as Spotify.Threats 1. such as Amazon. 4. Apple faces threat from online music stores. 2013 tax increases. Apple may be asked to pay even more. The domination of Android decreases iOS power over influencing consumers to join Apple. 8. 3.