Competitive Advantage Analysis

This article provides a competitive advantage analysis of Apple iPhone XR in the mobile telecom industry. It includes a detailed analysis of Porter's Five Forces, including competitive rivalry, bargaining power of buyers and suppliers, threat of substitutes, and threat of new entrants. The analysis highlights the challenges and opportunities faced by Apple in the industry.

Running head: COMPETITIVE ADVANTAGE ANALYSIS
Competitive Advantage Analysis
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1COMPETITIVE ADVANTAGE ANALYSIS
Section B1- Industry Analysis
B1a) Porter’s Five Forces Analysis of Mobile Telecom Industry (Apple- iPhone XR)
The Porter’s Five Forces Model Analysis is the most powerful tool which will be
suitable in understanding where the power lies in the respective situation of the business (Tan
and Sousa 2015). It is useful as it assists in understanding the strengths of the current
competitive position along with position in which the company is trying to move in contrast
to the other competitors (Riasi 2015).
Competitive Rivalry
In the telecom industry, Apple iPhone XR faces high level of competition and it is
considered to be the strong force. The different companies like Samsung and LG are the ones
which aggressively competes with Apple and such level of aggressiveness and imitation
imitate strong type of force in the industry environment (Noe et al. 2017). In case of
differentiation of the products, the products which are available in market are similar in
nature which fulfills specific kind of purposes (Pereira-Moliner et al. 2015). For instance-
There are different popular applications which are available in iOS and Android and due to
the same, the customers switch from Apple to other competitors and it leads to tough rivalry
for Apple iPhone XR. Samsung Mobile Phones hold 15.1% of the market share and the other
mobile phone companies holds 44.2% market share that weakens the popularity of Apple
(Economist.com 2019).

2COMPETITIVE ADVANTAGE ANALYSIS
Figure 1: Analysis of Competitors of Apple
(Source: Anton 2015)
Bargaining Power of Buyers
In the current business environment, the bargaining power of buyers is strong which
affects the business of Apple and the other mobile phones company. In the respective field, it
is easy for the different customers to change their brand which makes them powerful in
compelling organizations such as Apple for ensuring satisfaction among the customers
(Molina-Azorín et al. 2015). In the telecom industry, it has been seen that as there is high
level of bargaining power of buyers, therefore the shifting of the preferences of the customers
from Apple to other competitors such as Samsung (Namada 2018).

3COMPETITIVE ADVANTAGE ANALYSIS
Figure 2: Bargaining Power of Buyers
(Source: Bhakar et al. 2016)
Bargaining Power of Suppliers
In case of bargaining power of suppliers, telecom industry experiences moderate
force as Apple has started to design their peculiar chips and it abridged the control of
producers like Foxconn through purchasing engineering equipment and using same for Apple
products (Mao et al. 2016). In addition, Apple has abridged distributor’s control by
captivating over merchandizing related distribution as well as product related facilities
through Apple Store (Albrecht et al. 2015). On the other hand, the other competitors such as
Samsung or Huawei depends on the suppliers which creates strong force for them that helps
suppliers to raise their demands (Huggins and Izushi 2015).

4COMPETITIVE ADVANTAGE ANALYSIS
Figure 3: Comparison Between Samsung and Apple
(Source: Eloranta and Turunen 2015)
From the graph, it has been analyzed that Samsung has gained a strong position in the
market from the year 2011 and due to the same, it has affected the growth of Apple in last
few years. With growth of Samsung in market, it has increased the bargaining power of
suppliers as they are delivering similar services like Apple to the customers (CNBC.com
2019).
Threat of Substitutes
It is moderate force which is affecting the computing technology of different mobile
phone companies such as Apple, Samsung and other brands which are performing equally
well. While the brand loyalty of the Apple customers is high and there are few models of
Samsung and Huawei which are potentially creating threat due to their design and efficiency
(Hinterhuber and Liozu 2017). The respective threat is growing more outside United States
wherein the brand loyalty is comparatively lower in nature (Aithal 2017).

5COMPETITIVE ADVANTAGE ANALYSIS
Figure 4: Threat from Substitutes in Mobile Phones Market
(Source: Eskandari et al. 2015)
From the respective pie-chart, it can be seen that Samsung has taken more than 18%
of the market share and Apple and Coolpad has taken more than 10% of the market share.
The threat of the substitutes will be increasing in future as there are brands which are coming
up and making strong position in market and it will be affecting growth prospects of Apple
iPhone XR model as well.
Threat of New Entrants
It is moderate force as the different companies which are present in the market have
been able to make their position and it will be difficult for the new ones to take the respective
position (Herrera 2015). Apple has created strong brand image in the market through
origination and operative client service that makes it difficult for the new companies to
contest against (Ginter, Duncan and Swayne 2018). In addition, the supply chain practices are
the other inordinate guard against disruption which is low end from the new entrants. From

6COMPETITIVE ADVANTAGE ANALYSIS
the graph, it can be seen that Apple has been able to gain 51% of the total revenues which
was effective in gaining competitiveness in market (Fortune.com 2019).
Figure 5: Revenue Analysis of Apple
(Source: Fortune.com 2019)

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