5 FORCES MODEL OF IPAD

Threat of new entrants or new

entry: Moderate force

Bargaining power of suppliers: Threat of substitutes or Bargaining power of buyers or

Weak force substitution: Weak force customers: Strong force

Competitive rivalry or
competition: Strong force

Competitive rivalry or competition: Strong force

Apple faces the strong force of competitive rivalry or competition. This component of Porter’s Five Forces analysis model determines
the intensity of the influence that competitors have on each other. In Apple’s case, this influence is based on the following external
factors:

1. High aggressiveness of firms (strong force)

2. Low differentiation of products (strong force)
3. Low switching cost (strong force)
 Bargaining
Threat of new
power
entrants
of buyers
or new
or customers:
entry: Moderate
Strongforce
force

Apple
The bargaining
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moderate
is strong
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the threatApple’s
of newbusiness.
entrants. This component of Porter’s Five Forces analysis model
determines
indicates thehow
effect
buyers’
and possibility
purchase decisions
of new competitors
and relatedentering
preferences
the market.
and perceptions
In Apple’s
impact
case, businesses.
new entrantsInexert
Applea moderate
Inc.’s case,
force
buyers’
strongon
based power
the following
is based on
external
the following
factors:external factors:

1. Low
High switching
capital requirements
cost (strong(weak
force)force)
2. High
Smallcost
sizeof
ofbrand
individual
development
buyers (weak
(weakforce)
force)
3. Capacity
High buyer
of information
potential new (strong
entrants
force)
(strong force)

Bargaining power of suppliers: Weak force

Apple Inc. experiences the weak force of the bargaining power of suppliers. This component of Porter’s Five Forces analysis model
indicates the influence of suppliers in imposing their demands on the company and its competitors. In Apple’s case, suppliers have a
weak bargaining power based on the following external factors:

1. Moderate to high number of suppliers (weak force)

2. Moderate to high overall supply (weak force)
3. High ratio of firm concentration to supplier concentration (weak force)

Threat of substitutes or substitution: Weak force

The competitive threat of substitution is weak in affecting Apple Inc.’s computing technology, consumer electronics, and online
services business. This component of Porter’s Five Forces framework determines the strength of substitute products in attracting
customers. In Apple’s case, substitutes exert a weak force based on the following external factors:

1. Moderate to high availability of substitutes (moderate force)

2. Low performance of substitutes (weak force)
3. Low buyer propensity to substitute (weak force)