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Supply and demand analysis of Apple Inc. products
The concept of supply and demand are closely related and need to b well understood in order for any business or company to progress since they determine whether a company will make profits at the end of the financial year or make losses. There ae several factors that influence or affect the supply and demand of products in the market, some of which are price related and others not related to price. This paper will hence look into various factors that influence the demand and supply of the Apple products and how the interaction helps shape the future of the organization in terms of quantity produced and the changes in their products and innovation.
The two non-price variables that affect the demand for the Apple products are customer income and the geographical region. The Apple products are often priced for a given group of income and often target the high earners as opposed to the low earning groups. Apple uses the premium pricing strategy that helps them to define their customer base and in most cases drive up sales (Nielson S., 2014). The premium pricing strategy helps Apple concentrate on the high earning population and monopolize this market as the customers keep buying their products for the pride of belonging to a select class. This hence drives up the quantity demanded in order...
The demography of location or the geographical location of their stores also affects the quantity of demand. Apple has its stores located in selected busy upmarket malls and their outlets are predominant in countries that have the economic muscle to provide the market for the premium priced goods. In developing countries, Apple minimizes its outlets with just one or two outlets at the economic hub in those countries. These geographical locations of their outlets are often tailored to meet the exact demand that there is hence the quantity of demand rarely exceeds the supply.
The two major non-price factors that affect the supply of Apple products are the competitor prices and the goodwill that their products have in most of the markets that they have been supplying over the years. Over the years, there have been competitors like the Samsung and the HTC brands that have posed a real challenge to iPhone and other products of Apple. This threat comes in both the level of technology and the price of the competitor goods. This makes the other competitors to be able to supply in greater quantities than Apple in the low end market which, unfortunately to Apple, is open to both high end and the low end earners. The goodwill that most of the Apple products have bearing their high quality and…
References
Amadeo K., (2015). Five Determinants of Demand with Examples and Formula. Retrieved May 16, 2015 from http://useconomy.about.com/od/demand/a/Determinants-Of-Demand.htm
Nielson S., (2014). Apple's premium pricing strategy and product differentiation. Retrieved May 16, 2015 from https://www.yahoo.com/tech/s/apple-premium-pricing-strategy-product-191247308.html
Hughes N., (2014). iPhone 6 & 6 Plus demand exceeding supply, iPhone 5s selling well as Apple dominates smartphone sales. Retrieved May 16, 2015 from http://appleinsider.com/articles/14/10/13/iPhone-6-6-plus-demand-exceeding-supply-iPhone-5s-selling-well-as-apple-dominates-smartphone-sales
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