Consumer preferences and demands
Introduction
Microeconomics is the study of people in the ordinary business of life. As the economic wellbeing depends upon the choices of the people based on the allocation and he usage of the resources. Thus it is important that the normal members of the community and the specialists in the government, education understands the account of these opportunities that I given by the microeconomic theory and this makes it able to develop the analysis of the theory. It is also important that they are also able to recognize the microeconomic evaluation of the problems and the policies (Mas-Colell, & Whinston, 1995).
The microeconomic theory based on the consumer preferences and demands can be explained by the Apple Company. Apple has been innovating new versions of its iPhone and getting more market shares than its contestants. Therefore the research will be based at the Apple iPhone from the microeconomic approach. This is the way it follows behind the demand and the delivery of the iPhone and it also clarifies the validation following the large and the greatest cost cuts by the Apple Company. The research focuses on the cost configuration of the iPhone and also on the plans and the delineation policies that are used by the Company to not just endure but flourish in the huge smartphone sell (Baumol & Blinder, 2009).
Apple is a modernized trendy and the producer of the buyer demand electronics. The corporation has feigned many individual processors and software which had been known as the Apple computer. This concept reflected the Apple’s alternation from the private processors to the end user electronics and portable handsets. The corporation changed the digital harmony business throughout the iPod transportable tune players’ online stores. The Steve Jobs got involved in the itinerant electronic tools and planned to partner with the Apple (Paroutis, Angwin, & Heracleous, 2016). These Steve Jobs had previously shown concentration in the finger screen expertise and overture to the tablets PSs and PDAs.
They later realized the increasing status and the consumer demand for the mobile phones for all conditions including the communication, internet and music. The CEOs from both companies started to realize that rather than having many tools, people would prefer just one tool from many functions. Manufacturing and the expansion of the iPhone was covered from the partners and the community. All the merchant associates were confirmed into the confidentiality and the invention growth squad was not conscious about the artifact they were mounting (Paroutis, Angwin, & Heracleous, 2016)
The requirement for the Apple product has been amazing high. Even prior to the launch of the initial iphone, the customers were lining in front of the Apple and their provisions to buy the new smartphone. There was an elevated responsiveness for the iPhone and many of the American cellular phone customers knew of the succeeding start of the latest iPhone by the Company. Those who knew about the products of the company were ready to purchase them. The demand of the Apple’s products continued to increase in the U.S market (Paroutis, Angwin, & Heracleous, 2016). According to the research carried out, many of the respondents owned a smartphone and planned to buy more. The Apple Company benefited from the increasing trend in the demand of the smart phones as it fixed a large market distributes. This demonstrates that the requirement of the Apple iPhone was high in 2008 when the iPhone 3Gs was commenced and pitched with the discharge of a new model phone or a value slash (Paroutis, Angwin, & Heracleous, 2016).
The interest of the study was based on the collision of the price slice on the order of the manufactured iPhone models. The business strategy that can be seen to have been created by the Company is that the Company asks the customers who were not planning to buy the iPhone to show up the prices at which they would reflect on retailing it. The company has to slash the price of the iPhone so that they would get the other respondents interested in buying the iphone for the same price. Based on the supply of the Apple phone, the Company struggled in continuing with the towering demand but have deficiency o supply. The Company had challenging supply issues when it launched its iPhone. Many of the iphones were sold during that first weekend after it was launched. This was the start of a new design though many supposed that the iPhone could have been improved if there were no delivery complications and supply challenges (Paroutis, Angwin, & Heracleous, 2016).
Some of the doubters believed that this kind of the Apple business strategy was to sustain the control over the market and dynamics, the demand and the consumer prices. This made the Company take more time to supply their products instead of using the 24hours (Paroutis, Angwin, & Heracleous, 2016). The Demand of the remained unmet foe many people in America who was searching it in the rising promotes. Corporations mainly have a gap of 100, 000 elements in each year among the real and the estimated order statistics but for the Apple Company, the space was increased up to one million due to the higher than anticipated global require for the iPhone. This made the contribution chain challenges for the Apple while their supply chains provided evidence for inadequacy. Thus the supply of the Apple iPhones has remained low and incompatible. If the company had maintained its business strategy and convened all the demands, it would have gained more auctions and sell shares in the years (Paroutis, Angwin, & Heracleous, 2016).
The value plan at the Apple iPhone is based on the condition of the requirement and the delivery. Apple could have enlarged the value of its smart phones. The goods which have a high order and low contribution are always sold at higher prices. This was not the case according to the Apple Company cost policy. Apple has been lessening the costs of the different models of the iPhones that it has commenced since 2007. If the demand of the Apple’s products had been low, then it would be assumed that the price cut would be an approach to inspire the demand and sales. The occasioning and the velocity of the cost cut are the business strategy choices while the timing price cut in 2007 was measured more untimely as the Christmas was approaching. The main concept following the cost cuts could be the Apple’s objective to vend the products to more customers and boost the market allocations (Paroutis, Angwin, & Heracleous, 2016).
While the prices are cut, the Apple Company made its products more attractive to the people who could not afford it. The price cut was a good business strategy to allow the Company has more competitors coming from the other smartphone manufacturers. By plummeting the 8GB iPhone cost, the Apple Company prepared the product classier and more striking to the customers in a greater period compared to other goods of the competitive corporations such as Google (Cooke, Schmidt, Alfonso, & Montgomery, 2011).
Based on the economic approach, the prices of the Apple products for its phones can be known as inter-sequential price prejudice. Inter sequential price prejudice refers to the setting of high prices for the products initially to sell to the customers with the highest enthusiasm to buy and the reduction of the prices so as to attract those with lower buying determination. Firms get the price prejudice by developing specific product models and give each model at a different price. According to Apple, the models of the products are different based on their manufacturer time. Apple had a quality model of iphone which was hunted following the technical confidence clients who wanted to buy the smartphone as soon as it was commenced while the inferior prized description was accessible later (Paroutis, Angwin, & Heracleous, 2016). The high esteemed customers recognized themselves by making purchases while the low esteemed customers waited to buy.
The Apple’s products cost decrease was to provoke the little valued clients and those who were not eager to buy the products originally due to the higher costs to buy it at an inferior cost. The Company planned to boost the trade income through superior sales quantity rather than having it in advanced limits. When Apple abridged the prices of its products, its sales increased with a huge percentage. The high price decrease of the Company’s products has been referred to as the price landing. This price approach can be used to clarify the value cut of Apple for its iPhones (Paroutis, Angwin, & Heracleous, 2016).
The microeconomic theory helps us to understand the motivation of the Apple and its decisions to decrease the costs of the iPhones regardless of their high requirement and the low contribution condition. Apple iPhone is an illustration of a creation that has a low time succession thus the requirement for the iPhone differs in the whole life. The maximum order is mainly seen at the initiate of the new iPhone as its elevated quality clients tries to be the first in the acquire line of the original produce (Cooke, Schmidt, Alfonso, & Montgomery, 2011).
The order for the iPhone at the first time of its foundation was inflexible and turned to be more flexible as time continued. The price policy comes in where the elevated cost is thrilling to low flexibility customers and then the inferior costs to sell to the huge marketplace. This may not maximize the income of the company but it will if the customers are willing to predict the price in the by prospect. High esteemed clients may wait to buy the merchandise after the cost slash while the pricing policy would turn to be unproductive (Cooke, Schmidt, Alfonso, & Montgomery, 2011).
The smartphone market has turned to be an oligopoly as there are many few companies that shave the industry supply. According to the market structure, these companies are independent and the measures in use by the company affect the antagonism in the markets and amend the competition strategy. Thus companies try to keep boundaries of entry such as the economics of sales, cost management and the high asset and product variation so as to hinder the new contestants in the market (Cooke, Schmidt, Alfonso, & Montgomery, 2011).
The microeconomic theory has created some advantages and disadvantages to the Apple’s organizational structure. The company’s strong control based on the chain of command in the Apple’s structure maintains its strong support in the organization. The Chain of command in the company controls everything that is carried out in the organization. Through the leadership, the functioning of the organization and the product grouping in the organizational structure, the Apple Company ensures that the directors take the control of the organizational processes (Frank, 2015).
The advantage can be gained from the economics of scale where there are more well-organized interior systems and the location of the natural features with low property expenses. Thus Apple is famous in making the innovative products such as the iPhone and controlling their market leadership through market campaigns to make a privileged brand. The limited flexibility based on the economy of the Company is a disadvantage as it brings the downfall of the organizational structure and creates lower flexibility. The Company’s command chain prevents the lower levels o the structure to the elasticity reaction to the business requirements and the market demands. The Organizational structure does not really support the quick alternations as everything must go through the organization’s managerial structure (Frank, 2015).
Conclusion
The Apple products have been enclosed by disagreements based on their pricing and the harsh competition from the rival smartphone manufactures. The successive features of the company are at the high technology products quality and the factor that has gratifies the requirements of the technology products and the amazing products to the customers. The demand of the Apple’s company products has improved in each year with the new models and the price cuts. Normally in the free bazaar, cost is resolute by the order and the delivery connection and by this, the cost of the iPhone ought to have amplified but in the Smartphone marketplace, the concept does not happen. The microeconomic matters have been increased based on the price prejudice by the Apple Company which has been the normal trend of the company. Apple seems to have gained the balance of economic through the costly and the strategic suppliers’ relationships of the workings and the production of iPhone. This is enabled the company o reduce its prices without harming its gross margins.
References
Baumol, W. J., & Blinder, A. S. (2009). Economics: Principles and policy. Mason, OH: South-Western/Cengage Learning.
Cooke, C. W., Schmidt, J. C., Alfonso, A., & Montgomery, W. (2011). Steve Jobs: Co-founder of Apple.
Frank, R. H. (2015). Microeconomics and behavior.
Mas-Colell, A., & Whinston, M. D. (1995). Microeconomic theory. New York [u.a.: Oxford Univ. Press.
O'Grady, J. D. (2009). Apple Inc. Westport, Conn: Greenwood Press.
Paroutis, S., Angwin, D., & Heracleous, L. T. (2016). Practicing strategy: Text & cases.
