BU1903 Economics for Sustainable Business Assignment Sample
Here’s the best sample of BU1903 Economics for Sustainable Business Assignment, written by the expert.
Answer 1
Market Structure of Apple
Apple is a UK based multinational company which introduces technology gadgets in all over the world. Apple is a continuous growing company and it maintains its growth by its innovative imagination and its way of doing business. With the help of its continuous innovation, it has developed an excellent product’s series. As per innovation of modern technology, required steps have been taken by Apple Inc in respect to expansion of information technology world (Ghauri et al., 2016). According to modern technology innovation, the expansion of Apple Inc. forces to its competitors to explosion and stay alive in the market competition. Different market structure like oligopoly and monopolistic, can be considered by the Apple Inc. for market competition.
In present, Apple Inc. uses different market structure for its different products like oligopoly is used for smart phones and monopolistic is used for branded computer. In monopolistic market structure, monopolistic maintains a place in the market in which different sellers are manufacturing highly distinguished products. This type of market structure is too costly and difficult for potential competitors to enter in this industry. This structure creates the entry barriers. At the same time, Apple Inc. uses the oligopoly market structure in which the market is controlled by small competitors. Apple Inc. uses this structure for its smart phone products only (Morton, 2015).
Reasons for selecting market structure
The market structure can be considered as oligopolistic for Apple’s smart phones operating system firms. Apple has been capable to maintain its position in the market because this market structure is too costly and difficult for competitor to enter this industry. Apple Inc. is multinational company which can maintain to outsource from other countries (Morton, 2015). Apple Inc purchases materials which are used to prepare its products, wholesale. That is why it is capable to set its products prices by its own. In this situation, the participants do not need to settle towards industries prices but rather it, the participants often capable to set the prices by their own. Apple Inc. purchases products at low prices and also able to produce the products at low manufacturing costs. This condition permits it to keep its products prices low at the effort of enters the company with the maximum prices out of the competitive market. So that it can be considered that oligopoly is able to increase Apple’s profit margin and keep it market as a market dominant for these products.
Apart from this, the monopoly market structure may not good for Apple Inc. Because the monopolistic aggression of Apple can make its fans worried as they are thought that the product quality of Apple will be reduced soon (Zyskind, 2016). At the same time, Apple app covers up to 83% market size all the mobile application downloads.
Answer 2
It is known that Apple is the largest information technology company in the world as well as second largest manufacturer of mobile phone after Samsung. Apple Inc. enjoys a brand loyalty and it has been gradually graded as valuable brand in the world. In 2017, Apple registered its highest record of revenue and they crushed the revenue estimation of Wall Street (O’Neil, 2017). Apple’s analyst had expected that the company’s revenue will be around $ 50.7 billion but after fiscal year ends, the revenue was posted $ 52.58 billion which was up 12 % from the same quarter of last year and Apple’s profit was $ 10.7 billion which was up 19% in the fourth quarter.
As per the reports, Apple released its product range like Iphone 8, 8 plus as well as Apple watch series 3 before the end of the fourth quarter in 2017. But Apple recorded the strong sales of I phones which was consisted the new version on the horizon (Lanis et al., 2017). In fourth quarter of 2017, Company sold more than 46.6 million I phones which was up more than 1 million from the sales of same quarter in last year. As per the CEO of Apple Mr. Tom Cook, the reason of company’s growth was its new product range. Its product range of the quarter four contained the special features like clips which provide users to create and edit videos, add live animated captions as well as provides a mode to share videos (Aversa et al., 2017). The consumers were agreed to pay more for its new features. This was the reason which was made its product prices deliberately increased.
Answer 3
Cost structure is described as the relative proportion of variable and fixed cost which incurred by the company. This is helpful to decide the market price of the product which shows that product is able to compete in the market or not. The cost structure of Apple Inc. which was differed in order to product portfolio was implemented. Apple’s product prices and bots are relied on the proposition of premium value (Folland et al., 2016). It is achieves for Apple’s core products. Apple’s main products are Mac, Iphone, Ipod, and Ipad as well as. The economies of scale are also examined by Apple Inc. by the cost- determined approach and this is the reason that Reasonable prices are charged by Apple. Apple applies fewer margin techniques to serves its customers. Its cost structure is not so typical. The cost structure is a difficult concept to be overcome. So, the cost structure is developed after focusing on all the factors. Apple’s users are valued for it and that’s why it maintains a strong cost structure which is favorable for it as well as its users. These situations are proved for it as a cost advantages.
The economies of scales are explained as the cost advantages that is exploited through the expending the production scale towards long run (Hirschey, 2016). These kinds of scales are followed by the Apple. The diseconomies of the scale of Apple may the company’s size which is getting to big day by day. Apple is worried about its diseconomies related to its innovation and excellence which has forced it to this situation.
References
Aversa, P., Haefliger, S., & Reza, D. G. (2017). How to assess the value of a business model portfolio?. Mit Sloan Management Review.
Folland, S., Goodman, A. C., & Stano, M. (2016). The Economics of Health and Health Care: Pearson International Edition. Routledge.
Ghauri, P., Wang, F., Elg, U., & Rosendo-Ríos, V. (2016). Market driving strategies: Beyond localization. Journal of Business Research, 69(12), 5682-5693.
Hirschey, M. (2016). Managerial economics. Cengage Learning.
Lanis, R., McClure, R., & Zirnsak, M. (2017). Tax aggressiveness of alcohol and bottling companies in Australia. Canberra: Foundation for Alcohol Research and Education.
Morton, F. S. (2015). Are a Competition Authority and an Industry Regulator Equivalent. J. on Telecomm. & High Tech. L., 14, 9.
O’Neil, C. (2017). Weapons of math destruction: How big data increases inequality and threatens democracy. Broadway Books.
Pettinger, T. (2017). Supernormal Profits. Retrieved from https://www.economicshelp.org/blog/3181/economics/supernormal-profits/ (Assessed: 09 April, 2018)
Wikinimics, W. (2009). Product differentiation in imperfectly competitive markets – the MacBook Wheel. Retrieved from http://welkerswikinomics.com/blog/2009/01/28/product-differentiation-in-imperfectly-competitive-markets-the-macbook-wheel/ (Assessed: 09 April, 2018)
Zyskind, M. (2016). Fighting for Market Share: How a Trade-at Rule Can Improve Market Efficiency. Chi.-Kent L. Rev., 91, 411.
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