Management Economics: Market Analysis of Apple

This report explores the market analysis of Apple Inc. in the context of management economics. It covers the description of the company, its products and services, history, market analysis, and characteristics of the company's current and previous market structure. It also provides a suggestion regarding operating in a different market structure.

Management
Economics

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Description of Apple Company along with its products and services.....................................1
2. Market analysis of Apple.........................................................................................................2
3. Characteristics of company’s current and previous market structure......................................4
4 (a) Operating in a different market structure is more optimal for Apple..................................6
4. (b). Suggestion regarding greater or lesser government intervention......................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management economics could be defined as the application of different types of
economic theories and concepts that can help to deal with all the issues that are dealt by an
organisation. While planning to meet all the long-term business goals it will eb very important
for all the entities to make sure that they are focusing upon the economic theories and tools as it
can help to find best suitable solution for all the business-related issues (Alkhudary, Brusset and
Fenies, 2020). With the help of management economics, the companies can formulate effective
decision for future so that growth and development for business could be acquired. Present report
is based upon Apple which is one of the largest entities in smartphone industry. It was founded
by Steve Jobs, Ronald Wayne and Steve Wozniak in year 1976. Since the year of establishment,
it is carrying out all its operations successfully and currently it is market leader. This assignment
covers various topics such as description of company, its products, services, history, analysis of
the market in which it is operating and analysis of that the entity had operated under different
market structure or not. Apart from this, assessment of that if the organisation will operate in
different market structure will be more optimal for it or not along with the suggestion regarding
greater or lesser government intervention are also covered in this project.
MAIN BODY
1. Description of Apple Company along with its products and services
Company initially established in 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak.
Apple Inc. is best known for the innovative nature and selling of iPhones, handheld apps,
streaming services and products online. The firm launched Apple 1st in July 1976, which was
standardized chipset device and installed legal capability as opposed to several other devices at
the period. The business has a variety of products like iPhone, ipad mobile machine, Air Pods,
built-in earpieces, smart TVs and watches, making it the highest grossing brand in the world.
Apple's devices are innovative in understanding the wishes and expectations of consumers
around individual behaviour and technical development.
Apple is seeing immense progress over the last 7 years because of their unique and
innovative way of thinking. Apple has produced a variety of great products with impressive
quality and usability, by developing technology (An, Zhang and Adom, 2019). Apple Inc. has
taken important steps to extend the scope of digital technical developments in software
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engineering. This advancement has also triggered its few competitors to survive and expand
within the business sector with suitable rivalry. Its products and services also included several
range of iPhone , iPad, macbook, iPod, Apple TV, Apple Watch and technical optimisation
techniques, iPhone OS (iOS), OS X and ios applications, iCloud, Apple Pay and a wide range of
gadgets.
Particularly Apple Inc.-produced mobile phones were managed to obtain the study, which
would be officially the most commonly used Smartphone in the global economy. Technological
advancements are very rapid in this market, as many cellular providers announce a new range of
products inside weeks. It was determined that Apple was among the world's biggest mobile
firms, as it has achieved tremendous results in the United Kingdom , the United States, the Asian
market and Europe.
2. Market analysis of Apple
Target markets structure such as oligopoly and monopolistic competition can
be considered. Apple Inc. enjoys oligopoly industry supremacy in competition over Smartphone
upgrades, but Apple Inc. is seen as a dominant market for branded devices. Monopolistic
competition is which a large number of retailers manufacture widely unique product. Rivalry
over monopolies is often called monopolistic competition (Chang, McAleer and Wong, 2018). It
describes the competitive economy as similar to and staring with the dominant market supplier
side. Some expert’s people expect that competition over monopolies is more likely than perfect
competition due to interdependent (non-homogenous) products produced by the rivals. Uncertain
rivalry is not founded on rigid, completely fair activities.
The corporation retains the luxury of price increases in this competitive world with uneven
demand, to make profits. The dis-identical product is being marketed by Apple Inc. That makes
them succeed in the business rapidly and productively. There are now more competitors in the
monopoly industry relative to oligopoly, and the apple's "big laptop" computer is known as a
monopoly market. Many other mobile corporations that have been on the market, such as Sony,
HTC, Samsung, Oppo, Vivo, Xiaomi, Dell etc. are big competitors that dominate a global
handset and laptop computer market. Although the operating gains made by these competing
vendors are somewhat close to those of Apple Inc. which remains profitable. Accurate
Corporation of an incomplete nature, as the term guarantees, imperfect competition industry. The
organization prefers market structure for them is oligopoly and introduces its attributes such as:
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A lot of corporations and a lot of consumers demand this process. For eg, the percentage of
income earned from industry earns very few significant dealers on the business market.
Customers can make non-price differences between the competitors ' products, i.e. product
distinction occurs (Gálová, Rajnoha and Ondra, 2018). Non-price business is facing extreme
competition. Producers have high-quality control-they are not "demand-free loaders" but
"business makers." This competitive advantage allows the organization the ability to exploit its
economic conditions. Barriers of entry and exit are high but in monopoly market, there seem to
be no obstacles to the entry to the dynamic market. This indicates that the short-term external
profit will encourage other providers into the organization and only normal profit has been made
over the long run. Apple Inc. performs and manages robotic operations. The principle of equal
numbers of times resides in the competitive goods. The goal of both businesses is to increase
their profits over a period of time. So the customer tries to maximize healthcare by buying those
companies. Below mention market shares of top Smartphone companies help the individual to
understand customer demand and their overall shares in the world’s mobile sector.
Quarter 2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1
Samsung 23.5% 21.0% 20.3% 18.8% 23.0% 23.0% 21.8% 18.8% 21.2%
Huawei 11.8% 15.9% 14.6% 16.2% 18.9% 17.7% 18.6% 15.2% 17.8%
Apple 15.7% 12.1% 13.2% 18.3% 11.8% 10.2% 13.0% 19.9% 13.3%
Xiaomi 8.4% 9.5% 9.5% 6.7% 8.9% 9.7% 9.1% 8.9% 10.7%
vivo 5.6% 7.9% 8.3% 6.9% 7.4% 8.6% 8.4% 7.7% 9.0%
Others 35.0% 33.6% 34.1% 33.1% 30.0% 30.8% 29.1% 29.5% 28.0%
TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
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Apple placed third with 36.7 million iPhones and identified a small decrease of 0.3 percent
in first quarter of 2020 for YoY. The 11-series iPhone worked to serve drive supplier growth.
nMoving forward, if buyers change their purchasing tastes toward more budget-friendly products
in the volatile economic environment of 2020, the introduction of the latest SE (2020) app try to
targeting the lower segment and manufacture mobile phone in low range to survive from
current economic impact.
3. Characteristics of company’s current and previous market structure
In the preceding period, Apple Inc. used oligopoly structure of market but in the current
moment they used monopolistic structure (Deming, 2018). In context of Apple or monopoly
organizations, enterprise faces no rivals or oligopoly where lesser competitors in the market, it
wants to deal in a monopolistic competition. This legal framework identifies a bunch of
competitor manufacturers who selling similar products, but not identical, goods and enabling for
free entries and exits. As a result, it was evaluated it would only be an ideal way for Apple to
grow sales in a monopolistic competitive industry. It can provide this business with the ability to
improve long-term market share and dominance trends each of its customer goods, to ensure
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sustained success in the technology field. The features of the oligopoly market which the Apple
follows in history are described, those are as follow:
Non-price competitors: Due to various Oligopoly 's concern about price discrimination,
businesses suggest avoiding competitive market and thus depend exclusively on price-based
methods such as advertising, post sales services, guarantee coverage, etc (LaRiviere And et.al.,
2018). It often means that companies can influence rivalry and raise brand awareness.
Few entities: Oligopoly market is one which has few larger companies and the definite
majority of organizations are uncertain. There is interesting relationship, since each company
produces a significant portion of the total manufacturing. The overall number of firms that
operate in an oligopoly market is not always the determining component. In reality, an oligopoly
corporation may have a wide variety of companies, exceeding that of every highly competitive
environment which is monopolistic. The distinctive aspect, even so, is that as opposed to the
scale market, some of the firms are considerably larger. For example, a specified firm with
several firms is considered oligopolistic when the five top firms produce the twice the entire
business sector inputs.
Entry barriers: Under Oligopoly, a corporation will produce supernormal income in the
long term, as there are hurdles to entry such as trademarks, permits, ownership over key raw
materials, etc. Such barriers prevent firms from entering the sector (Le And et.al., 2018). Entry
barriers are indeed the main attribute that separates the elements of business strategies from
oligopoly structure from monopolistic market structure. Companies can enter a challenging
market with monopolistic market with very little, if any, trade restrictions if enterprises formed
gain economic profit. That increases the power of the industry of each specified company.
Nevertheless, with substantial trading gaps found in oligopoly, businesses are unable to exit the
workplace as painlessly as practicable, thereby maintaining higher business dominance among
dominant corporations.
Inter - dependence: Within Oligopoly market structure, when a few firms have an large
share of the overall revenue of the market, each business is influenced by the price and
production decisions of the competing businesses. Therefore there is indeed a lot of
interconnection between companies in an oligopoly. Consequently, even when determining its
profit generating level, a corporation takes into account the operation and reaction of its
competing firms.
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4 (a) Operating in a different market structure is more optimal for Apple
Apple is one of the largest and successful entities that are operating business all around
the world and having strong customer base. The enterprise is currently operating under oligopoly
and monopolistic competition market structure (Sfeir-Younis, 2019). The level of competition
for the entity is very high in the market because there are various smart phone sellers with
android or other operating systems at lower price as compared to the mobiles that are sold by
Apple Inc. The market image of the entity is very good because of good quality of all the items
that are sold by it in the market. It is not only selling the smart phones but also other electrical
devices. The price of all its items is very high due to which individuals from lower class are not
able to afford it. If the company will be operating within another market structure such as
monopoly market where it will be the single seller of the items that are sold by it then it could
have resulted higher demand of it. Apart from this, if it will be used by the enterprise then it can
also help it to be the only seller of all the items that are being sold by it.
Currently there are various competitors of Apple which are selling mobiles with android
and other operating systems so if monopoly market structure will be selected by Apple then it
will help it to reduce the level of competition. Apart from this, it can also facilitate it to attain
higher profits because it will be the only cost leader in the industry. Because of monopoly market
structure the profits of the organisation could be increased because it will result in the single
seller in the market. The specific items that will be sold by the entity could be copyrighted which
will help the enterprise to be the only manufacturer and seller of that item for the time period for
which it has been copyrighted (Zoogah, 2018). Apart from this, it can also benefit it to avoid the
duplication and waste of resources because the item which is sold by the entity with
monopolistic could not be copied by others. It can also help the enterprise to enjoy economies of
scale because the organisations with monopoly market structure make lot of profits and it can
help them to spend more money to research and development activities so that the enterprise can
maintain its monopoly status.
From the above discussion it has been analysed that monopoly structure is highly optimal
for Apple because with the help of it, the organisation will be able to maintain its status, the
profits could be enhanced and it can be at the market leader position.
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4. (b). Suggestion regarding greater or lesser government intervention
Government intervention could be defined as the action which is carried out by the legal
authorities and affecting the economy of the market. Main objective of it is to have the impact
upon the economy so that the trade within the country could be maintained. There are various
types of social issues such as unemployment etc. and because of them the economy of countries
gets impacted and it affects the standard of living of all the individuals living in the nation. It is
very important for all the legal authorities to take appropriate actions for the same so that the
issues faced by the society could be ignored. All the steps which will be taken by government
will be considered as the governmental intervention which will be positive for the society. It
guides all the entities to carry out all their operational activities in ethical manner so that they can
establish a positive image in the market (Teece, 2019). If a company will be operating business
under unethical terms then with the help of governmental intervention all the illegal actions of
them could be controlled. If there will be no specific policies for governmental intervention then
it may leave negative impact upon the society because due to this, the sellers may set very high
prices for the items that are sold by them. Apart from this, it will also affect the consumer rights
because they will not be able to file any type of complaint against the frauds and other unethical
activities of sellers. It shows that if there will be specific policies, rules and regulations regarding
governmental intervention then it will result in ethical society and enhanced standard of living of
all the individuals who are part of community.
CONCLUSION
On the basis of above analysis, it was argued that management economic is the key aspect
that helps an organization to make the correct choice in a fair period by determining the
economic position on the market. To predict future performance, companies can incorporate
different strategy industry principles such as monetary statistics, industry trends, current and
prior position, etc. they can choose the optimal strategic structure of their sector. In addition, it
was made on the Smartphone industry in accordance with this report, by examining the issue in
this selected field, it was evaluated that multinational corporations obtain incentives for more
business growth under any financial situation.
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REFERENCES
Books & Journals
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economics: a systematic literature review. European Business Review.
An, Y., Zhang, L. and Adom, P. K., 2019. Economics of wastewater management in China's
industry. Environment and Development Economics. 24(5). pp.457-478.
Chang, C. L., McAleer, M. and Wong, W. K., 2018. Management information, decision sciences,
and financial economics: A connection (No. TI 2018-004/III). Tinbergen Institute
Discussion Paper.
Deming, W. E., 2018. The new economics for industry, government, education. MIT press.
Gálová, K., Rajnoha, R. and Ondra, P., 2018. The use of industrial lean management methods in
the economics practice: An empirical study of the production companies in the Czech
Republic. Polish Journal of Management Studies.
LaRiviere, J. And et.al., 2018. The treatment of uncertainty and learning in the economics of
natural resource and environmental management. Review of Environmental Economics
and Policy. 12(1). pp.92-112.
Le, H. L. And et.al.,., 2018. Impact of working capital management on financial performance:
The case of Vietnam. International Journal of Applied Economics, Finance and
Accounting. 3(1). pp.15-20.
Sfeir-Younis, A., 2019. Land and soil management: Technology, economics, and institutions.
CRC Press.
Teece, D. J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers. 53(1). pp.1-43.
Zoogah, D. B., 2018. High‐performance organizing, environmental management, and
organizational performance: An evolutionary economics perspective. Human Resource
Management. 57(1). pp.159-175.
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