The iPhone disrupted the mobile phone market in 2007. Uber did the same with the transportation industry in 2011. Disrupting the industry gave Apple a new market to compete in. Apple’s new business model in which they facilitated a network connecting developers with users, changed the game. The most important part of this business model is that Apple controls and coordinates portions of the value chain where they can add value, leaving other areas to organisations with specific competencies. The application development is left to third parties, this openness makes the iPhone a site of co-creation as consumers work with company technologies to create value (Darmody, 2009).
The five forces analysis showed that the iPhone lives in a competitive environment. Strong competitors like Samsung, LG, and many others are rapidly innovating, use aggressive marketing and frequently imitate Apple. A SWOT analysis shows that the iPhone has a strong operating system and a very loyal customer base. These strengths compensate the weakness that the iPhone is relatively expensive. The iPhone can thrive in the next few years. The continued technological advancements can be used to improve the quality of the iPhone. However, Apple needs to watch out that they will not get left behind by their competitors.
The App store was a great way for Apple to build network effects and is also an excellent example of the long-tail business. With a few top-selling apps representing the majority of downloads (Suzuki, 2016). One of which is Uber, an example that was able to disturb the transportation industry by using the smartphone disruption. Uber has developed a smartphone app that acts as a mediator between the customer and the drivers. Through this app, Uber provides several services a normal taxi company does not. Customers can see and give reviews about the driver and the car he or she is driving, which allows them to pick their ride selectively.
Porter’s five forces show that the competitive rivalry of Uber is intense. Uber has some big competitors who use a similar business model. Uber’s competition is not only in regards to the customers but also to the suppliers. The SWOT analysis shows that Uber’s first mover advantage created one of their critical strengths. However, on the other hand, it also created some of it weaknesses like the lawsuits and the insurance and liability questions. These lawsuits are also a future threat, as it can destroy Uber’s entire business model. Lastly, Uber still has the opportunity for expanding towards other geographical areas.
So what about the future? The possibilities seem endless. For Apple to maintain their competitive advantage, they need to keep up, or rather stay ahead, of the innovations that are to come. As for Uber, Uber receives many critics, of which some issues even lead to lawsuits. Still, the steady growth of Uber shows its high potential for the future. Moreover, with the increase of the smartphone market, the amount of customers will rise. Uber is likely here to stay.
References
Darmody, A. (2009). Value Co-Creation and New Marketing. Open Source Business Resource. [http://timreview.ca/article/302]
Suzuki, L. (2016). How Strong are Apple’s iPhone Network Effects?. Onlineeconomy.org. [http://www.onlineeconomy.org/how-strong-are-apple’s-iphone-network-effects/]
