The situational analysis of a company’s product is essential to understanding where a product can best succeed and, often more importantly, where it will fail. To conduct a thorough analysis of a product involves examining the strengths, weaknesses, opportunities, and threats that a product brings to a company. In the case of Apple and the iPhone 5s, these four qualities are simple to ascertain. I. Strengths The Apple iPhone 5s, has several strengths. For instance, Apple has very high consumer loyalty.
In fact, data compiled by Consumer Intelligence Research Partners states that 78% of iPhone users go on to buy another, whereas Android users have a 67% retention rate. These figures are even more impressive when one examines individual Android brands. Here are some of the top smartphone companies and their respective consumer retention rates. It is this remarkably outstanding customer loyalty that allows Apple to churn out massive profits. For whatever reason, most Apple users will only use Apple products. Apple knows this, and continues to offer smartphones at a significant markup, sometimes exceeding 40% of the total cost to produce it.
Due to gross overpricing, Apple is able to make larger profits than its competitors, even though it only holds 13% of the market share. II. Weaknesses While Apple may have an advantage in consumer loyalty, it has a severe disadvantage when it comes to new consumers and emerging markets, primarily because suitable alternatives are readily available. For example, the cheapest (16GB internal storage) iPhone 5s has a retail price of $649(USD), compared to the global average price of all smartphones which is $312(USD).
The Essay on Consumer Product Safety Act
Consumer Product Safety Act The Consumer Product Safety Act states that any company that receives numerous complaints about a products defects must report these claims to the CPSA. According to the CPSA reporting responsibilities belong to manufacturers, importers, distributors and retailers of consumer products. Each is required to notify the Commission if it obtains information which reasonably ...
Since an iPhone can cost more than twice as much as a suitable alternative it becomes increasingly difficult for Apple to penetrate price-sensitive markets. Another weakness the iPhone 5s has is a lack of upgrades from the iPhone 5. When one compares the specifications of these two phones, differences do not exactly stand out. They have the same 8 megapixel camera, the same 640×1136 pixel resolution, the same dual core 1300 MHz processor, a scant 8 MB increase in RAM, the list goes on and on. The only noticeable advantage the 5s has increased in-call battery life by two hours.
When compared to previous iPhone releases, the 5s has the fewest innovations and improvements. This could prompt consumers to wait until the iPhone 6 is released before upgrading. III: Opportunities Apple’s opportunities in the smartphone market stem primarily from its loyal user base. As long as the company continues to innovate its products in order to stay ahead of (or at least on par with) competing enterprises, the iPhone should continue to be a massively profitable product for years to come.
Threats Obviously, the largest threat facing the success of the iPhone 5s is the looming monstrosity that is Android. Currently, Android is dominating the smartphone market, gobbling up an impressive 81% of the market share. This is primarily due to more flexible pricing, vast variety of phones, and compatibility with a larger variety of service providers. If Apple were to increase the variety of phone size and possibly consider lowering profit margins, it is possible to regain lost market share.
