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Differentiating Between Market Structures Case Study

Market Structures Simulation Table

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Open Source Software

Microsoft

Apple

Health Care Insurance

Goods/services

Linux (O/S)

Operating System

O/S, Devices

Insurance

Barriers to Entry

Medium

Number of Organizations

Few

Few

Medium

Few

Price Elasticity

Limited

Medium

Economic Profit

Limited

Apple Inc. -- Market Structure

There are different perspectives in which to view Apple's market structure since they operate in so many different markets. One perspective could be from an internal approach, in which the organization could be perceived as somewhat monopolistic since their hardware and software is "closed" sourced. Apple protects its proprietary hardware and software and does not willingly provide their source code to unapproved developers. Therefore, it could be said that Apple has monopoly control over the goods, services, and software that will work with its products. This allows the organization to charge a considerable premium for many of its products; especially the accessories that work with main products.

However, when considering the perspective that includes the entire market...

In the pc segment for example, Apple's competes with household names such as Microsoft, IBM, Dell, HP, and Toshiba (Wildstrom, 2009). Additionally, even with revolutionary products like the iPhone, Apple must compete with other innovative companies such as HTC, Palm, Blackberry, and Motorola (Wortham, 2011). Therefore Apple is subject to a healthy amount of competition in the market place. The switching costs to switch platforms are relatively low for most consumers and people can move from product to product with relative ease.
Apple is involved in a multitude of different market segments, even though many of the market segments are directly interrelated. For example, the cellular phone industry is dominated by a few large players who have substantial power in this niche. However, since most of the production capabilities utilized by high-tech companies are being outsourced, and then there may be an opportunity for smaller firms to compete in this industry.

Apple has a dynamic pricing strategy is completely dependent on the product and the market niche which the product is marketed. One pricing strategy that Apple uses as a model to price is dependent on the possibility of future revenue streams. Two prime examples of this strategy are the iPod and iTunes as well as the newer Apple TV and the movies and content that can be purchased with this hardware platform (Bui, 2012). Apple can…

Sources used in this document:
Works Cited

Bui, D. (2012, April 3). Little Known Secrets of Apple's Pricing Strategy. Retrieved from Sales Chase: http://www.saleschase.com/blog/2012/04/03/little-known-secrets-of-apples-pricing-strategy/

Keizzer, G. (2009, October 19). Apple sets sales records 'as if recession never happened'. Retrieved August 22, 2012, from Computer World: http://www.computerworld.com/s/article/9139574/Apple_sets_sales_records_as_if_recession_never_happened_

Landau, T. (2011, August 11). Imitating Apple is a Losing Strategy. Retrieved from Slanted Viewpoint: http://www.tedlandau.com/slantedviewpoint/index.php/archives/2011/823

Oliver, S. (2009, January 28). Global recession catches up to Apple's retail stores. Retrieved August 22, 2012, from http://www.appleinsider.com/articles/09/01/28/global_recession_catches_up_to_apples_retail_stores.html
Wildstrom, S. (2009, November 11). Why Apple Leaves Low-End Computers to the Competition. Retrieved August 21, 2012, from Business Week: http://www.businessweek.com/magazine/content/09_47/b4156000345421.htm
Wortham, J. (2011, December 3). Before Latest Phone Debut, Apple Has Harsher Competition. Retrieved August 21, 2012, from New York Times: http://www.nytimes.com/2011/10/04/technology/apple-iPhone-faces-divided-loyalties.html
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