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Economic for Sustainable Business

   

Added on  2021-06-16

8 Pages1725 Words60 Views
Running head: Economic for sustainable BusinessEconomic for sustainable BusinessName of the student:Name of the University:Author note

Economic for sustainable Business1Introduction: Among many mobile brands around the world apple is acknowledged as the leadingcontender in the industry due to its large market share in the respective market and owing toits brand value. With explicitly in the design, leap ahead in built quality as well as astonishingfeatures are the things that make it one of its kind, which is known for producing somethingamazing for their customers (Ahmed, 2016). The brand has extensive reach and market sharein the US market and now it has been enhancing its business to the Asian market, which isacknowledged as the largest mobile market, revenue of the brand is on spree. It has been seenthat over the year expansion to the foreign nations has aided the brand to enhance itsbusiness, however, recently there is fall in the market share. Though there is enhancedrevenue due to the outstanding products like Apple X, which was launched dated back in2017, it is one of the main concern for the brand to hold the deteriorating market share aroundthe world (Ma, 2016). This essay is aimed to provide an economic interpretation of thephenomenon because, the apple market operates against the general economic theories ofrevenue and market share. Market structure of Apple:Apple is known for its innovation and high tech gadgets that has aided the brand toovercast all the US market with a sweep and it has been marching at a fast rate to engulf theother market around the world. The brand has extended its business to the EU market as well,where it presently enjoys 17% market share (Biswas, Avittathur & Chatterjee, 2016). On theother hand, when it comes to the Asian market, then brand is facing reducing market share inthe largest mobile market like China and India. Presently apple is accounted for only 2%mobile sell out of total mobile sell in the region. Considering this, it can be seen that the firmoperates in different market structure in different economy (Drucker, 2017). For the USmarket it’s a pure oligopoly, where 4 large market player, namely, Apple, Samsung, LG and

P*Q*Demand ARMC lowerMC upperEconomic for sustainable Business2Lenovo is present. When it comes to the EU market, the market structure is similar as of US,however in the case of the Asian market, Apple has oligopoly market, and however the levelof competition is much higher than any other market. Figure 1: Apple’s market structureSource: (Created by Author)From the figure 1, it can be seen that the apple is being operating in the oligopolymarket, where it produces Q* amount of output at the price of P*. The output level of theapple is not socially optimised and the price level is way higher than the market clearing pricethat leads to fall in demand of the same. Upper portion of the kinked demand curve of theApple represent the market of the US, which is low on inelasticity in nature, due to the factthat more people prefer Apple over other brands (Vogel, 2014). Lower portion of the kinkeddemand curve of the figure 1 depicts the market of the Asia and EU, where the people havehigher number of options for mobiles and can shift to them easily (Hirschey, 2016). From thediversification of the production, Apple enjoys economies of scale in the US market, whereas it has been going through the growth stage in the EU and the Asian market.

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