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Micro Environment

Essay by   •  November 8, 2012  •  Essay  •  255 Words (2 Pages)  •  1,554 Views

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Micro environment is near environment. This environment is actually the direct surrounding of the firm that determines firm

position in competition. This environment can be explained using Porter five forces Based on Porter, firm position

is characterized by rivalry, threat from product substitution, threat from new entrant, bargaining power of supplier and

bargaining power of consumers.

A large number of competitors especially from Wintel family create a 'red ocean' for Apple. Wintel platform is not produced by

single firm rather than combination of firms. These competitors offer similar product to apple with only little different in

features, brand and design. Several Apple competitors are IBM, HP, Compaq, Dell, Lenovo, Gateway, Acer, Fujitsu, Sony, ECS,

Toshiba, etc.

Strong bargaining power of suppliers creates high cost of computer components. As there is only small number of processor

suppliers and only small of them has capability and willingness to provide the best for Apple, the bargaining power of supplier

is high to the Apple. This condition made the price of processor component is high.

At the other side, the great number of competitors with similar product specification and the birth of Internet are also

strengthening the bargaining power of final consumers. This limits the ability for Apple set price too high.

Low threats of substitute product also characterize the industry. Besides Wintel personal computer, there are no pure

substitutions for Apple personal PC. Since Wintel personal computer is the same kind of product with Apple, it is considered as

rivalry instead of product substitution.

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