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The Electronics Industry Analytical Essay


Introduction

Communication remains one of the most important tools in the current market. The market has become increasingly competitive. As Chaston (2009, p. 78) states, the market is getting very competitive as the world embraces globalization.

The world has been turned into a global village. An American company can now make its productions in China and sell its products in India. The geographical barrier that existed before has completely been eliminated. Transport and communication has enhanced business processes.

Firms can now go beyond their borders. This is considered as one of the biggest achievements in commerce. The market has been expanded for large firms that can manage to operate globally.

However, this also comes at a cost. While an American firm will have an advantage in the fact that the scope of the market is expanded, there will be a price to pay for this. It will also be ready to receive competitors in the local market.

The electronics industry is currently considered one of the largest and the fastest developing industries in the world. This industry has had a huge impact in the world in various fronts. This industry has played the leading role in transforming the world into a global village.

Information can flow very freely from one part of the world to another, thanks to the electronics industry (Viardot 2004, p. 37). Various firms can operate in the world market with much ease because of the improved communication.

The social media has had a massive impact on the lives of people, both economically and socially. Firms are currently relying on Facebook, Tweeter and YouTube to communicate to the populace because of the improved communication strategies. Electronics have become basics in the society.

Analysis of the Industry by Porters Five Forces

According to Handlechner (2008, p. 25), the market for electronics, and specifically personal computers have been on a constant rise in the last two decades. Emerging technologies are changing the social structure of societies around the world.

Communication has become very important in the lives of different individuals in the world. In the office, a personal computer is needed to store data and easily retrieve them. It is also useful in preparing various documents within the office. A manager will need a personal computer to track various records relevant to the organization.

Back at home, computers are very useful for entertainment, especially as a form of social networking. To a student, personal computers will be useful in performing various tasks that are related to their studies, including research. Every organization in the current world cannot operate normally without a personal computer.

With this massive growth of the market for this product, various firms have come out with various brands of computers to tap on the growing opportunity for this product. Apple has been one of the leading firms that have been considered as the leading manufacturers of personal computers.

Dell is facing a serious market competition from Dell in the manufacture and sale of personal computers in the United States and other overseas countries. Apple has proven to be the main threat of Dell in this industry for a number of reasons. The United States still remains that most attractive market for personal computers.

The market is large enough, and the purchasing power is strong enough to support the industry (McLaughlin & Aaker 2010, p. 48). Both Apple and Dell are American companies. They therefore enjoy the same privileges in this market.

The second reason that makes Apple a serious challenger of Dell in the market is the niche it has acquired in the market. Apple has positioned its products as high end products. When Apple introduced its laptops in the market, they were marketed as high end products, and their prices reflected the same.

However, this firm is changing its tact in the market. It is spreading its target to other segments. It is now targeting the middle class consumers with products having fair prices, but still holding to its initial market proposition. This was after realization that this class has the majority of consumers of personal computers.

Besides the two firms mentioned above, there are other electronic firms in this industry specialized in various electronic products such as Samsung, Nokia, and Motorola mostly known for their aggressive marketing of mobile phones.

Apple has been keen with its marketing strategy. According to Ferrell (2011, p. 89), one of the most powerful tools that a firm has in the market is the ability to reach out for the customers with the desired message in the best way possible.

The management of Dell has come to realize that this is one of the strongest tools that Apple is using today as a way of developing competitive advantage in the market. Another very strong brand in this industry is HP.

Recent reports however, indicate that HP is dropping its position and new brands like Lenovo are set to take the lead in the market. Dell comes out as one of the leading manufacturers of laptop. With a market share of about 13%, this firm is the third largest manufacturer of laptops in the current market.

However, the recent incidents are poised to change these figures. The emerging trends are favoring some firms while hurting others. Apple is one of the biggest beneficiaries of the emerging technologies in this industry (Gountas & Mavudo 2008, p. 112). It has become very popular, especially among the college students.

Application of Porters Five Forces in This Industry

This industry faces a number of threats that the concerned firms have to develop mechanisms through which they can counter then. To create an understanding of these challenges, and how this firm is dealing with them, Porters five forces would be appropriate.

In order to bring a clear understanding of these forces, it would be appropriate to narrow down the analysis to one firm in this industry. Apple will be used because it specializes in various electronic products.

Porters Five Forces

New Competitors is one of the threats it has to take care of. New firms will be entering this industry very frequently, especially due to the attractiveness of the industry. To tackle the threat of new competition, this firm has been keen on producing new products to rival those of new competitors.

It has been keen to introduce new products in the market to counter any possible threat. Threat of Substitutes also threatens operations of this firm. To manage the threat of substitute products; this firm has developed different lines of products to satisfy different markets so that they may not be adversely affected if substitute products invade one line.

To increase their bargaining power with the buyers, this firm has continued to produce high-end products with qualities that make it easy for the customers to appreciate their high prices. In so doing, this firm has been keen to ensure that the lower end of the market is not assumed.

To increase its bargaining power with the suppliers, it has created a scenario where is single buyer with various sellers. The merger was one of the ways of achieving this. This makes it able to dictate the terms of buying the products.

To counter the intensity of competition, it has been able to acquire a special niche in this market, rendering their competitors irrelevant as their products are turned into mere substitutes of such company’s products.

Strategically Important Forces for Organizations in This Industry

In order to have a proper understanding of the important forces in this industry, it is important to understand the industry’s external environment by scanning it. Environmental scanning is one of the best ways through which an individual can assess the potential forces within an industry.

There are three variables in the environment, which are the natural environment, societal environment and task environment. The natural environment variables include the climate, wildlife and physical resources.

Societal environment entails economic, political, technological and socio-cultural forces (Gerber 2008, p. 17). Task environment include the government, customers, employees, unions, creditors, suppliers, local community and competitors.

Environmental scanning can be done using STEEP Analysis. This involves the analysis of socio-cultural, technological, economic, ecological, and political environments.

The socio-cultural environment of industry is diversified. This is because this industry has a global presence. There are those countries that cherish equality, and women have equal economic strength just as men. In such countries, firms in this industry do not segment the market on the basis of sex, but age.

The United States is one such country. However, other countries like Saudi Arabia have women as subordinates to men. It forces these firms to target the male members of the society because they have bigger purchasing power.

The technological environment in this industry is very dynamic. Technology in mobile telephony and in computers has been the main challenge and strength of firms in this industry at the same time.

While these firms are left with nightmares of trying to guess what their competitors are going to come up with overnight some are using the same technology to gain competitive advantage over others firms.

For instance, Apple has used this technology to emerge as the leader in Smartphone market. Its recent introduction of iPhones 5 found other firms unawares. The dynamism of technology in this sector has made this firm be seen as the most innovative.

Economically, this industry has had both ups and downs. The industry has been faced with economic recession that hit various countries in the world, especially the US economy which makes its main market.

This had serious negative effects on the revenues of firms in this industry as many of the customers considered the products as non-basic.

However, there have been other seasons why the firms have experienced economic boom in various markets, increasing its revenues. Currently, the United States, and many other countries making up the market of this firm are experiencing steady economic growth, making it have a favorable economic environment.

Politically, this industry has not met challenges in various countries around the world. The United States of America, which is the largest market for electronic products globally, is the leading democracy in the world. It has a very stable government that is very supportive of business operations.

China, where these firms do most of their productions, had some small political strife, but not enough to have significant negative impact to the firm. This has seen these firms prosper in most of their undertakings.

Legally, this industry has been faced by a number of challenges, especially cases where firms are taken to courts over breach of patent rights. Apple for instance, has faced some major challenges. It is currently facing a litigation following the law suit filed by Samsung over copyright infringement on its iPhone 5.

The laws that govern trade in the US, China and many other countries in the world have been very favorable to this firm. This is one of the few cases where this firm is facing serious litigation over infringement of a copyright.

In most of its markets, especially in the emerging markets in Africa, parts of Asia and South America, this firm has met very friendly markets with laws that are conducive to foreign technological firms like it.

Critical Evaluation of the Outward-In Approach to Strategy Formulation

Marketing is gaining a new approach in the current society. Immediately after the Second World War, most companies had huge markets in the developing countries. The level of competition was very low and firms only worried about production. Marketing was considered a unit in the production department.

Most firms used an inside out approach to marketing. However, this has changed with the changing environmental factors. Currently, most firms face stiff competition in their various industries. They have had to change this approach to marketing.

The marketplace is full of so many challenges. Many firms face various challenges that they have to overcome in order to be considered relevant in the market.

There are some environmental concerns that would be considered a challenge for firms in this industry. Qatar is one of the developing nations in Asia. The infrastructural development is not to the standard and this causes serious problems to various businesses in the country.

Although the government has made efforts to improve the road network, others still need serious improvement in order to be considered as of the right standards. The facilities at various institutions of higher learning also need improvement for them to be in a position to churn out fully capable employees.

The main threat that firms in this country have had to deal with is competition. The market has gotten increasingly competitive. Chaston (2009, p. 75) notes that many firms have come up with products, which are close substitutes of those that are offered by other firms in the same market.

This scholar notes that there is lack of creativity in various countries. Various firms that come into the market are not creative, but just copy cuts. They come to the market with similar products as those of existing companies, and this brings about serious competition in the market.

Strengthening Competitive Position: the Strategic Moves

In the current competitive market, firms in this industry have employed a series of strategies that would ensure that they remain relevantly competitive in this market. One of the most relevant strategies that have been used is the marketing strategy.

In this strategy, a firm tries to sell its products at prices that would bring in as many of the customers as possible. Apple has been keen on employing this strategy.

Although the company has some of its products sold at premium prices, it has a number of its products sold at fair prices that can be afforded by the middle class members of the society.

Under this strategy, this firm has ensured that its distribution of the products is efficient and effective to further cut down the cost of delivering the products to the customer.

Another strategy used by this firm to manage competition is market development strategy. In this strategy, the firm has struggled to ensure that it increases its market share in the world market. This has been done through market penetration in the new markets where this firm had not make entries into.

The firm has also developed new markets and new users for its products. It created new users by developing the machines that could be used in the airports and other sensitive places for security check-ups. It also developed new markets by developing cheaper products that could be afforded by new markets at the lower niche of the market.

Taking the product strategy, this firm has ensured that most of their products are up to the market expected standards. This firm has been keen to ensure that most of its products are not only of good quality but also of the right specifications in terms of size.

In its research and extension unit, this firm has been very creative. It has been voted as one of the most innovative firms in the world for a number of years. It has been keen to introduce new products into the market at regular intervals.

Competing in the Domestic and International Market

Understanding Apple’s strategies in the domestic and international market can help define the strategy in this industry that has helped most firms in this industry excel. The domestic market of Apple is the United States. This market is also home market for other giant computer manufactures like the IBM (Hill & Jones 2010, p. 129).

For this reason, the level of competition is very high. The world market is also very competitive for there are numerous firms that have mastered the art of producing the computers and phones around the world.

Various Chinese firms have been able to mimic the technologies used by this firm to produce phones with similar features but at very cheap prices because they use simpler technology with cheaper resources.

This therefore forces this firm to develop competitive procedures both at the local and international markets to ensure that it remains competitive in the market.

Strategically sweet sport is one of the avenues that this firm has embraced both locally and internationally. It has taken advantage that its new products are able to satisfy its customers in a way that other rival firms cannot. This has attracted it a sea of loyal customers.

Strategic windows make another strategy that this firm has employed. Through innovative minds, this firm has been in a position to develop new products in the world market to serve different new markets (Evans 2012, p. 112).

An instance is the security gadget they develop to help in detecting weaponry at the airport. This strategic window has earned it a lot of revenue not only in the local but also the international markets.

Corporate Strategy Used by Apple for Diversification and Multi-Business

Hooley (2008, p. 82) says that it is risky for a large business unit to specialize in a single area of production and a single supply chain strategy. It is important that a firm develops different lines of products that can cushion it in case one of the lines is experiencing a dry spell. Apple stated out as a computer manufacturing firm.

However, as time went by, this firm realized the importance of diversification of its products. Taking research and development as one of the important aspects of the firm, Apple has managed to develop new products to the market, extending its line of production. The firm currently has a series of products targeting various markets.

Some of these products include the iPod, iMac, iPhone, iCloud, Apple TV and a series of software. This has enabled this firm to operate as a multi-business firm. This way, it is able to reap maximally from one line in case the other experiences a low season.

In its early year, it entered into a joint partnership with Microsoft to ensure diversification of its products. This resulted in huge profits, though this partnership later collapsed.

This firm has also been committed to coming up with new supply chain strategies in the market to ensure that its products reaches the market within the required time.

Ethics, Corporate Social Responsibility and Environment Sustainability as Part of Outside-In Strategy in This Industry

Corporate social responsibility has been one of the ways of understanding the society within which a firm operates. A firm should develop a positive relationship with societies in which it operates.

It is after developing a positive relationship with customers that this firm would be in the best position to develop supply chain strategy in this market. Ethics, morality and law are some of the ingredients in a business set up that a firm cannot assume its importance.

A business unit has responsibilities that it has to fulfill in order to be seen as a moral firm. McLaughlin and Aaker (2010, p. 121) reports on Carroll’s four responsibilities. These include economic, legal, ethical and discretionary measures.

The firm has economic responsibility to its owners. Apple has been very responsible to its shareholders. The firm has been paying regular dividends to the shareholders, making them have good value for their investment in the firm.

Legally, this firm has respected laws and regulations that are put in place to protect such asserts as patents. It has been keen to ensure that it adheres to the set laws on patent and copyrights.

Apple is one of the most ethical electronic firms in the world. There has been a clarion call for the world’s major manufacturers to cut down on their emission of greenhouse gases into the environment. It is only a few firms, Apple being among them, that have taken a positive reaction to this call.

It recently launched a corporate social responsibility to help clean the environment in selected cities around the world. It has also sponsored planting of trees in various countries around the world, especially in emerging nations in Africa, Asia and other parts of South America.

It has also endeavored to employ the locals in various locations where it operates. This is to ensure that it is responsible to the locals as much as possible. The firm has also maintained morality and ethics among its employees (Bissoondoyal 2006, p. 89).

It has encouraged ethical behavior among its workforce by defining specific code of conduct for all its employees. This way, its employees are able to asses themselves and determine if they are on the right path as far as their behavior is concerned.

The company has also respected the whistleblowers’ role. When one of the mid management employee reported on the inapplicability of Steve Jobs policies and his excessive pressure on employee when he was the chief executive, the board of directors sent the C.E.O packing, an act that not many firms may attempt.

This was a utilitarian approach to ethics where actions are judged by their consequences. The firm also respects individual’s rights in the firm irrespective of the position held. Justice and fairness is one other guiding principle in the firm that has been relevant to the firm’s current success.

Building a Good Strategy Execution, People and Capability Structure

Strategy can only be beneficial if it is implemented properly. The execution of the strategy is done by people. Some of the pertinent issues that must be determined in the implementation process include determination of what is to be done, who to do which task, and how the entire team would work as a unit in the process of achieving its goals.

In its mission statement, Apple is very clear on what is to be done (Montiel 2011, p. 118). It says that the firm is determined to customer satisfaction by availing products that meets and exceeds customer expectations.

On who should be responsible for the implementation, the firm has its workforce specialized in various duties, ensuring that none of the units overlaps its duties to the other’s and no given task remains unallocated. This has ensured that the firm runs in a very smooth manner.

In its mission to ensure that all its employees work as a team, the firm has ensured that all the employees master the vision of the firm so that in their respective tasks, they know where the firm aims to be at in a near future.

They will appreciate the fact that they are working as a team towards the same direction, with each member of the team having a specific role to play.

List of Reference

Bissoondoyal, U 2006, Total quality management: a practical approach, New Age International, London.

Chaston, I 2009, New Marketing Strategies: Evolving Flexible Processes to Fit Market Circumstance, Sage Publications, London.

Evans, D 2012, Social media marketing an hour a day, Wiley Indianapolis.

Ferrell, C 2011, Marketing Strategy, Cengage Learning, New York.

Gerber, K 2008, Marketing communication, Pearson Education, Cape Town.

Gountas, J & Mavudo, F 2008, Marketing Strategy: A Decision-Focused Approach, McGraw-Hill, North Ryde.

Handlechner, M 2008, Marketing Strategy, GRIN Verlag GmbH, München.

Hill, C & Jones, G 2010, Strategic management theory: an integrated approach, Houghton Mifflin, Boston, MA.

Hooley, G 2008, Marketing Strategy and Competitive Positioning, FT Prentice Hall, Harlow.

McLaughlin, D & Aaker, D 2010, Strategic market management: global perspective, Wiley, Chichester.

Montiel, P 2011, Macroeconomics in emerging markets, Cambridge University Press, Cambridge.

Viardot, E 2004, Successful Marketing Strategy for High-Tech Firms, Artech House, Boston.

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IvyPanda. "The Electronics Industry." June 18, 2019. https://ivypanda.com/essays/the-electronics-industry/.

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IvyPanda. 2019. "The Electronics Industry." June 18, 2019. https://ivypanda.com/essays/the-electronics-industry/.

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IvyPanda. (2019) 'The Electronics Industry'. 18 June.

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