Management Principles Assignment (Porter's Five Forces on Apple Inc.)

7477 words 30 pages

Section | Assessment | Page | 1 | Introduction | 4 | 2 | Contents | | | * 2.1 To analyze the company’s practices/operations in relation to the selected topic. | 5-9 | | * 2.2 To identify and explain the relevant principles and concepts of management (in relation to the selected topic) those are being applied in the company. | | | * 2.3 To identify and explain the pros and cons in the application of the relevant principles and concepts of management in order to find the problems that will be encountered by the company | 10- 16 | 3 | Recommendations | 17- 21 | 4 | Conclusion | 22 | 5 | Bibliography | 23-25 | 6 | References | 26- |

1.0 Background
In April 1976, Steve Wozniak and Steve Jobs were
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ii. Bargaining Power of Suppliers It refers to the pressure exerted by supplier on a company. Suppliers are considered as the source of inputs to the firms. The ability of firm to negotiate favourable term are depends on the number of suppliers a firm relies on. If there are only few suppliers in the market, the suppliers will have more bargaining power and it can charge a higher price to the firm. The bargaining power of suppliers for Apple Inc. is moderate. Central processing unit is a necessary component required by almost all the personal computers. “Within the personal computer industry, central processing units (CPUs) are sourced from a duopoly, Intel Corp. and Advanced Micro Devices, Inc. (AMD).” (Brian, 2009, p. 4) In 2005, Apple announced the plan to shift to use Intel Corp microprocessors in its Macintosh computers. With only two firms manufacturing the processors, Apple has to fight against HP, Lenovo, and Dell for the purchasing of processors. If Apple tends to switch to another supplier, it has to bear a high switching cost because different motherboard socket designs are needed by the proprietary chip designs used by these two firms. However, Apple has a strong vertical integration as it became the supplier for some of its own products and the distributor for Apple's products. For example, Apple provides Macintosh computers with its own operating system, Mac OS. For


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