Oligopoly, Mergers, and Acquisitions. Essay Example

Apple Company is a technology company that designs and develops technologies to the consumer that it sells to. The company develops both hardware and software used on its technological products. The company manufactures a wide range of products including iPhone, apple watches, Apple television and computers that it sells in different parts of the world. The company also produces software applications which include operating systems such as the iPhone operating system and the icloud that allow the customers using apple devices to back up their data. The products and accessories produced by the company continue to be among the best devices produced in the world. The company has grown its market share with discoveries that gives it an upper hand when competing with other companies in the technology world.

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Annual Sales

The annual sales of the apple company have been increasing over the years, in the year 2018 the company generated annual revenue of $265.595B which was a 15.59% increase from the previous year 2017. The table below shows the revenue performance of the company for the last couple of years (Pratap, 2019).

Apple Inc Market Structure

Apple Inc product market maintains an oligopoly market structure. Oligopoly market structures characterized by a few sellers who sell either differentiated or homogenous goods (Tucker, 2008). There are only a few companies that significantly compete with Apple Inc. Apple. This market structure is for smartphones, but when it comes to branded computers, the company enjoys the monopolistic competition. It is expensive for other companies to enter the market hence the reason why they enjoy this type of competition. In a monopolistic competition, many firms offer products which are distinctive in one way or the other. Apple products are branded ad relatively expensive as compared to products from the competitors. Although many companies produce smartphones and computers, customers can easily distinguish Apple's products from the products from other companies such as Samsung.

Market Share

The market share of Apple Company has been growing over the years with the latest data showing that it covers 15.8% of the total market (Pratap, 2019). Other companies have emerged and are offering stiff competition to the company, which can be attributed to the reduction in the growth of the market share. The vast market share is attributed to the ever-increasing revenue that the company generates.

Apple has been able to acquire market share from different regions around the world (Pratap, 2019). The products of apple are meant for the upper-class market of the consumers' market share. The company does not operate in the United States alone. It also operates in other regions of the world, especially in Europe and the Middle East. There is a target audience where the company target the upper class in the society that can be able to afford. The apple company operates internationally. The main competitors of the apple company include Samsung, a Korean company that focuses on producing phones and laptops.

Apple’s Competitors

One of the competitors of Apple Inc is Samsung Group which is a Korean Company. Samsung offers products such as telecommunication appliances, electronics, home appliances, semiconductive, as well as automotive (Pratap, 2019). Samsung competes closely with Apple Inc in the smartphones market. Samsung Galaxy and Apple iPhone are strong competitors, and both are aiming at increasing the market share. In the computers' segment, Apple competes closely with Dell, which is an American multinational company established by Michael Dell. Dell DJ and iPod are two competitive products from these two rival companies. Dell also has produced XPS laptops which closely compete with Apple's MacBook Pro. Although these two companies compete against each other Apple enjoys customer loyalty. Apple also competes with Microsoft, which is the owner of the Windows Operating System. This software closely competes with Mac OS made by Apple. Other Apple's competitors include Hp, Lenovo, Sony, Huawei, Asus, Google, Huawei and Oppo Electronics Corporation.

Brief Overview of the Other Businesses in the Market

The apple company owns several income-generating businesses. Having several sources of income has enabled the company to generate income when the market performance is low (Pratap, 2019). The market of the company is growing as the middle-income people grow in the world who are the main consumers of the company products. The market for technologies has been growing over the last couple of years. The market has also faced high competition because of the many companies that have joined the industry selling similar technologies. The products produced by Apple Company have remained competitive because of the high quality and the brand that the company has created over the years.

Economic Concepts

The economic concepts that Apple Company utilizes include the economies of scale where the company produces the technologies on a large scale to enjoy the economies of scale (Tucker, 2008). The economies of scale are where the company purchases the raw materials on a large scale and therefore, the company enjoys discounts. Apple Company can earn more profits from reduced costs of production. Product differentiation is also a concept that the company focuses on by making its products unique from similar products produced by other companies.

Acquisitions and Their Effects on the Company

In the recent past, the company has acquired several companies which means that they are diversifying since some of the companies are not in the technology industry. One of the companies acquired by Apple is Ikinema which is an animation and film production company. Apple acquired this company in October 2019 for an undisclosed amount. In June 2019, Apple entered an acquisition deal with Drive.ai, which is a company that deals with the design and development of self-driven cars. Apple also acquired Stamplay in March 2019 for $ 5.7 and Laserlike for an undisclosed amount (Pratap, 2019). This shows that Apple Inc does not solely deal with smartphones and computers but has diversified in other fields such as automotive.

Challenges Faced by Apple and How the Firm Can Better Respond to Them

Some of the challenges faced by Apple Inc are technology challenges, economy challenge and technology challenges. The company can deal with the economy challenge by ensuring that they have products that middle-income earners can afford. The company can deal with the challenge of competition by ensuring that they come up with new models. This is because the competitors have been coming up with various models hence providing perfect substitutes for Apple's products.

In conclusion, Apple is a technology company whose annual sales have been increasing. The company maintains an oligopoly market structure. The company has a market share of 15.8 percent and has market share globally. Apple's competitors in both smartphone and computers include Microsoft, Samsung, Sony, Dell Oppo, among others. Apple utilizes economies of scale to reduce the costs of production, thus maximize profits. The company has acquired companies such as Laserlike and Ikinema. The company faces challenges such as competition, the economic challenge, as well as a technology challenge.

References

Pratap, A. (2019). Who are the main competitors of Apple? Retrieved 14 October 2019, from https://notesmatic.com/who-are-the-competitors-of-apple/

Tucker, H. (2008). Apple to the Core. ITNow, 50(3), 20-21. Retrieved from https://ieeexplore.ieee.org/abstract/document/8129005/