Threat of New Entrants or New Entry

There are two factors that primarily keep the threat of new entrants relatively weak for Apple
Inc. First is because the cost barriers to establishing a new technology company are very high. And
second, it’s because brands cannot generate Apple’s kind of brand image and recognition overnight. It
simple doesn’t work that way. This component of Porter’s Five Forces analysis indicates the effect and
possibility of new competitors entering the market. In this case study, new entrants exert a moderate
force based on the following external factors: 1. High capital requirements (weak force) 2. High cost of
brand development (weak force) 3. Capacity of potential new entrants (strong force) The above-
mentioned external factors make new entrants weak. However, let’s not overlook the fact that there are
large firms with the financial capacity to enter the market. For example, Google has already done so
through products like Nexus smartphones. Samsung also used to be a new entrant. These examples
show that there are large companies who have the potential to directly compete against Apple Inc.
Thus, the overall threat of new entry is moderate. And based on our research, Apple must maintain its
competitive advantage through innovation and marketing to remain strong against new entrants’
moderate competitive force.

Resource and Capability Analysis

“My favorite things in life don’t cost any money. It’s really clear that the most precious resource
we all have is time.” (Steve Paul Jobs) One the biggest reasons why Apple has been the leading
corporation that manufactures computer software and consumer electronics in the globe is because
they have an outstanding VRIN analysis: valuable, rare, inimitable, non-substitutable resources analysis.
In this case study, we are going to focus on Apple Inc.’s efficient exploitation of its core competencies
and competitive advantages manifested by the intelligent use of its resources. This research aims to
determine the resource and capability analysis of Apple and how the members within the said
organization were able to come up with the best and strategic-wise planning.