Market Analysis of Apple Inc.

The report provides a market analysis of Apple Inc. by considering its internal and external environment, market segmentation, current market position, and positioning strategies. It also includes a brief overview of the company, its products, and its market share in Australia.

RUNNING HEAD: MARKET ANALYSIS
FUNDAMENTALS OF MARKETING

MARKET ANALYSIS 1
Contents
Introduction................................................................................................................................2
Company overview................................................................................................................2
Market analysis..........................................................................................................................2
Internal environment (Micro).................................................................................................2
External environment (Macro................................................................................................4
Market segmentation..................................................................................................................5
Current market position..............................................................................................................6
Positioning strategies.............................................................................................................7
Conclusion..................................................................................................................................7
Bibliography...............................................................................................................................9

MARKET ANALYSIS 2
Introduction
The research report focuses on the market analysis of ‘Apple’. A market analysis is a
quantitative and qualitative assessment of a market. It looks into the size of the market both
in volume and in value, the various customer segments and buying patterns, the competition,
and the barriers to entry and regulation (Winston et al., 2013).
The report initiates by providing a brief overview of Apple Inc. The second section
emphasizes on the micro-environmental analysis of Apple by using porters five-force model.
It also includes the macro-environmental analysis through PESTLE model. The succeeding
part comprises of market segmentation by considering IPhone. The report also provides a
brief insight of market position of Apple Inc. in Australia. The key purpose of the report is to
gain knowledge by applying marketing model on a real life company.
Company overview
Apple Inc. is a multinational business enterprise founded by Steve Jobs in the year 1976 in
California, United States (Cribbin , 2019). It has 506 retail stores in 24 countries including
United States, India and China (Macrumours , 2019). In Australia, it has around 24 stores
including Sydney (Chester , 2015). Besides physical stores, it also serves its customers via
digital channels (Mukherjee & Anand , 2019). It forms the part of manufacturing industry. It
is engaged in the production of wide variety of products such as I Phone, Watch, TV,
Macintosh, Mac computer and IPod (Apple, 2019). It is recognized brand with 588 million
apple users in the worldwide (Macflypro, 2019). The major source of sale for the brand is
iPhone, with 8.6 million Australian users (Thenewsdaily, 2018).
Market analysis
A market analysis is a process of gathering information about a market within an industry. In
order to analyse the market of Apple Inc., both internal and external environment has to
consider (Winston et al., 2013).
Internal environment (Micro)
The internal environment analysis of a brand assists in determining the resources,
competencies and competitive advantages. It also helps in knowing the possible strengths and
weaknesses of a business enterprise in an industry (Munizzo & Musial, 2010). Following are

MARKET ANALYSIS 3
the points describing the internal analysis of the Apple Inc. through the usage of Porter’s five-
force model.
1. Industry rivalry: It determines the level of competition prevailing in the industry
within the existing firms (Porter, 2017). Apple Inc. faces low competition in the
market. This is because there are few competitors for Apple Inc. like Samsung and
Microsoft (Owler, 2019). Additionally, its products like ‘IPhone’ are highly
differentiated in its features and functions in comparison to Samsung and Microsoft
products (Fullsacle, 2019).
Figure 1: Apple Inc. major competitors
Source: (Owler, 2019)
2. The bargaining power of the customer: It focuses on the customer power to drive
down the price (Porter, 2017). Apple Inc. customers attain low bargaining power. This
is because a high strength of customers exists in Australia. Additionally, they are less
sensitive to product price (HKTDC, 2019). Moreover, there are less renowned
substitutes including Samsung and Microsoft (Owler, 2019).
3. The bargaining power of the supplier: It emphasizes on the supplier power to drive
up the price (Porter, 2017). Apple Inc. suppliers attain low bargaining power. This is
because there are few buyers in the market. Example, IPHONE uses the software
named ‘IOS’ whereas competitive brands like Samsung relies on ‘Android’ software.
Therefore, only IPHONE uses IOS version (Apple , 2019). Therefore, its software
suppliers have only Apple Inc. as its customers leading to low bargaining power.
4. Threat of new entry: It determines the risk possibility of a firm from the entry of
new firm in the market (Porter, 2017). The Apple Inc. attains intermediate threats

MARKET ANALYSIS 4
from the new entrant. This is because existing companies like Samsung and Apple
possess patents rights and high brand reputation in the Australian market.
Additionally, government attains adequate control over the market. However, the
Australians low loyalty towards their brands develops a risk for Apple Inc. (O'Brien ,
2018).
5. Threat of substitution: It focuses on the risk that a firm has from the substitute goods
and services available in the market (Porter, 2017). Apple Inc. attains high threats of
substitution. This is because switching from Apple to Samsung/Microsoft costs low.
Additionally, competitive brands like Samsung and Microsoft are offering similar
products at attractive prices (Owler, 2019).
External environment (Macro)
The external environment analysis helps in gaining the essential information about the
opportunities and threats of a brand in a concerned market. Through the usage of PESTLE
(Political, Economic Social, Technological, Legal and Environmental) model, external
environment of Apple Inc. is described below.
1. Political factors: It includes factors such as Tax rate, corruption level and
government stability (Perera, 2017). In Australia, the corporate tax rate is marked at
30% (Heritage , 2019). Its average corruption rate until 2018 is 10.04 with fine
government stability (Tradingeconomics, 2019). The average corporate tax rate, low
corruption rate and fine government stability develops favourable political
environment for Apple Inc. in Australia.
2. Economic factor: It emphasizes on factors such as Per capita income, Gross
Domestic Product, unemployment rate, inflation rate and population strength (Perera,
2017). The Per capital income of Australia is marked at $50,334. It GDP is $1.2
trillion with a growth rate of 2.3%. The unemployment and inflation rate is 5.6% and
2.0%. In the 2019, it has a population of 24.8 million (Heritage , 2019). Its high Per
Capita income determines that Australians have high disposable income. That
ultimately enhances their purchasing power. The high GDP and low Inflation rate
states that Australian attains a stable economy. Moreover, its low unemployment rate
depicts that high percentage of Australians have financial resources. Its high
population provides a large customer base for Apple Inc. Therefore, Australia
provides a fine economic market for Apple Inc.

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3. Social factor: It includes factors such as income distribution, customer buying
behaviour, lifestyle and belief patterns (Perera, 2017). Focusing on the buying
behaviour, Australians are favouring online shopping (Roymorgan, 2018). They have
high spending power and less sensitive to price (HKTDC, 2019). Australians high
spending power and low price sensitivity aligns with the Apple Inc. high priced
product. Therefore, Australia provides a positive social environment for Apple Inc.
4. Technological factor: It determines the level of technology prevailing within the
country to benefit the technology business enterprise (Perera, 2017). Australia has
highly advanced technology and provides high internet speed (Cave , 2017).
According to Global Innovation Index, it ranks 17th for innovative nation (Liddy,
2015). Thus, it clearly states that Australia delivers a highly favourable technological
environment for Apple Inc.
5. Environmental factor: It includes factors such as climate, weather and geographical
location of a country (Perera, 2017). Focusing on the climatic conditions of Australia,
it receives low annual rainfall (Cox, 2019). Thus, attaining low rainfall determines
that Apple Inc. will not face problems in making its products sale. Thus, Australia
provides favourable environmental conditions to Apple Inc.
6. Legal factor: It emphasizes on factors such as property rights, judicial effectiveness
and (Perera, 2017). The Australian government lays prior attention in safeguarding
the patent rights of the business enterprise. Additionally, Australia has fine judicial
effectiveness (Heritage , 2019). This states that Apple Inc. will not face any issue
based on product imitation and can easily conduct its operations. Therefore, Australia
provides a decent legal environment for Apple.
Market segmentation
Market segmentation is the process of dividing a market of potential customers into groups,
or segments, based on different characteristics (Dolnicar et al., 2018).
1. Demographic segmentation: As per this category, market is divided based on factors
such as age, gender and income level (Dolnicar et al., 2018). The Apple Inc. focuses
customers that belong to youth and middle age group of Australia (Moorman , 2018).
2. Geographic segmentation: This category divides the market based on particular area.
According to geographical location, it emphasizes on customers that operates within

MARKET ANALYSIS 6
the urban areas (Dolnicar et al., 2018). Therefore, it has developed its retail stores
mainly in major cities like Sydney, Australia (Apple , 2019).
3. Psychographic segmentation: it takes into account factors such as customer’s belief,
attitude, interest and lifestyle (Dolnicar et al., 2018). Apple emphasizes on customers
with high lifestyle that belief in adopting and maintaining high status in the society.
Additionally, it targets customers that show high preference towards innovative and
technical oriented products. This is because its products are also innovative by
features (Lashinsky, 2012).
4. Behavioural segmentation: According to this category, market is divided based on
the customers buying behaviour (Dolnicar et al., 2018). The Apple Inc. focuses on
customers that are fewer prices sensitive and show high brand loyalty. This is because
less price sensitive customers can easily purchase its high priced products like
IPHONE (Lashinsky, 2012).
After assessing the Apple Inc. market segmentation, a customer profile is developed.
S/N FACTOR Description
1 Demographic
a Age Youth and Middle age group
b Income Upper class and higher middle class (high purchasing
power)
c Gender Both male and female
2 Geographic
a Location Urban areas
3 Psychographic
a Lifestyle High
b Belief Focuses on adopting high status
c Interest Innovative products
4 Behaviouristic
a Brand loyalty High
b Price sensitivity Low

MARKET ANALYSIS 7
Current market position
In the smart phone market, Apple Inc. attains a third place in the market (Lovejoy, 2019).
This is because Apple mobiles are highly used by Australians (Hughes, 2019). Apple Inc.
annual revenue is enhancing annually. Therefore, gradual enhancement in annual revenue
has assisted the Apple Inc. in attaining a fine market position (Macrotrends, 2019). It’s high
goodwill and status symbol among the customers have also contributed in providing a strong
market position to Apple Inc. (Aune, 2010).
Figure 2: Apple Inc. (iPhone) market share
Source: (Holst, 2019)
Positioning strategies
Following strategies have also helped the Apple Inc. in achieving high position in the
Australia as well as in International market.
1. Promotion: In Australia, Apple Inc. promotes its products to the customers in the
form of coupon codes, offers and discounts (Cribbin , 2019). It relies on famous youth
icons to sponsor its products.
2. Multichannel presence: Apple Inc. has developed its profile on various digital
channels like Instagram, Facebook and Twitter (Liquidweb , 2019). It has helped the
brand in gaining customer attention and enhancing its overall sales.
3. Product design and quality: Apple Inc. is a recognized multinational brand known
for its high quality products with exclusive designs (Appleinsider, 2012). It prior
attention towards enhancing its products quality has helped the brand in achieving
strong position in the market.

MARKET ANALYSIS 8
Conclusion
The report summarizes the market analysis of Apple Inc. From the above discussion, it is
analyzed that Apple Inc. is a recognized global business enterprise. From the internal market
analysis, it is analyzed that manufacturing industry of Australia provides a fine market for
Apple Inc. Additionally, the external environment analysis it is recognized that Australia
provides a highly favourable external environment to Apple Inc. The market segmentation of
Apple Inc. states that Apple emphasizes on youth and customer that belongs to middle age
group, upper class and upper middle class, maintain high status, less price sensitive, show
high brand loyalty and attains high interest in innovative products. After examining the
market position, it is realized that Apple Inc. attains a fine position in Australia as well in
global market. However, it is assessed that its promotional strategies, multichannel presence
and high product quality have assisted the brand in achieving a renowned position. Therefore,
it concludes that Australia delivers favourable market conditions for Apple Inc. resulting in
better market position.

MARKET ANALYSIS 9
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