3. Threat of Rivalry Personal Computers and the music/audio market are Apple’s two main areas of competition. Their leading competitors are Dell, HP, and Microsoft. Personal computers are quite popular today and with so many choices, the sales price of the computers need to be lowered to a competitive price which can, again, lead to a loss in profit. However Apple has, because of their easy to use and widely available, fair priced iPod(s), cornered the music market.
That is one reason why I believe why apple is "better" than Microsoft, also because they have a much better way of marketing things. Think about how much money you get from games. Microsoft takes a little bit of the money from each game sale yet cannot out profit apple because their marketing isn't very good. Originally Apple only has 4 types of products on the market (iPod, iPhone, iPad, apple tv, iwatch and the mac) just like Microsoft (PC, Xbox, Kinect, and phone) yet apple does better because of the reasons listed above. Microsoft though, since it has a big chunk of market share as far as operating systems is concerned, is for hackers to mess with since 70% of all hacking tools is for windows only.
The larger expenses coming along with high quality and services render salespeople a disadvantage when talking to their clients for business. The standards of performance (SOP) set for extra compensation seem unrealistic, with 75% of salespeople earning no commission in the first half of 1992, and so conceivably, fail to motivate them. This makes the result control less effective as they failed to evoke the desired behaviors – achieving sales targets. Together with other offers by competitors, this resulted in high turnover rate. Profit Sharing - Result controls may serve well with congruence between employees’ and company’s objectives, but employees take for granted the law-required 10% profit sharing of the company’s income and so their motivational effect seems little.
It enables commerce, retailing and digital marketing for merchants. EBay wanted an in-site electronic payment system and went ahead to acquire Billpoint. This acquisition did not work for its purpose because Billpoint was not popular at the time and this created lots of problems for eBay customers. EBay then needed a more popular in-site medium that customers could use to make transactions which lead to the acquisition of PayPal. In the fall of 2012, eBay acquired PayPal for $1.5billion.
It quickly ran away from the pack with its copyrighted PageRank search algorithm which returns superior search results for Web users. It also has developed extensive online advertising services for businesses of all sizes. Google provides value to the user by using an inexpensive, flexible infrastructure to speed up Web searches and provide its users with a vast array of Web-based services and software tools. Microsoft: Its business model originally focused on the desktop computer running the Windows operating system and Office desktop productivity applications. The company and its products are staples for businesses and consumers looking to improve their productivity with computer-based tasks.
Under the high competitive and fast-evolving electronic industry, no change means fall behind. The Financial Report from 1991 to 2000 indicated the sales increased, while the gross profit decreased. It means cost of good sold increased year by year. According to the case, Best Buy offering a self-serve mode rather than pay commissions to sales in order to reduce their SG&A, but Circuit City still kept the same one in its sales model, which resulting in increase the sales cost and declines in operating profit. Also, the worst part of this sales model is to ignore the customer’s needs.
• Supplier The iTunes music store changed the customer perception of album and music bundle. Now, customers have drastically reduced their consumption of album. • Customer Customer will prefer the product with very lower price for their own satisfaction. If someone have a favourite song, so they can download that song via iPad and they would not buy the whole album which is too expensive. • New market entrants When some industries have very low barriers to entry, new companies have several possible advantages.
The EV 1 was also fairly pricey so many people were not interested. Another killer of the electric car was the car companies. General Motors only made a certain amount because of the Zero Emissions Mandate (ZEM) was born. It required 2% of new vehicles sold in California to be emission-free by 1998, 10% by 2003. General Motors knew that this mandate would not last long, and they were more interested in selling gasoline cars.
This make it lucrative for companies to finance with internally generated cash, which is the most liquid asset. A drawback is that Apple earned a mere 0.77% on its cash and investments in fiscal year of 2011 [5]. The disadvantage is that the rate of return is close to the inflation rate. Apple has not debt and therefore no apparent reason to pile up cash, if they cannot invest it at a higher return than their current interest rate allows. Though another way of looking at it is that Apple is only waiting for the really good investments, and that opportunity offset the lost revenue of hoarding cash at a low interest rate.
Their main market of action is obviously the US one but they currently drive their strategy worldwide as it represents a huge reserve of profits. What kind of competition? Both Pepsi and Coke understood that it was better off not to erode their gross profit by playing on prices, even if the customers have showed price sensitiveness in the past history. They have no incentives to fight on prices as long as • there are not many other sellers in the market • prices can be adjusted quickly • there is a history of cooperative pricing (except punctually) Preservation of overall industry profits by Entry Enter the soft drink market is quite risky given the high dominant position of Pepsi and Coke. Hence, there is no real threat to see a new comer eroding the whole market profits by heating up internal rivalry.