Bargaining Power of Apple’s Customers/Buyers

At first look, one might say that the bargaining power of individual customers of Apple
or any of its competitors is relatively low. It is. However, it is obviously not the case with
regards to the case of customer groups or markets. Say in the last few years, Apple Inc. has lost
a huge market share in Asian markets in PC industry to competitors like Lenovo. Therefore, we
can conclude that when considering the collective bargaining power of the customers in
individual markets, it is high. Buyers’ purchase decisions and related preferences and
perceptions impact businesses. And having determined that the bargaining power of buyers is
strong in affecting Apple’s business, here are some external factors where buyers’ strong power
is based from. 1. Low switching cost (strong force) 2. Small size of individual buyers (weak force)
3. High buyer information (strong force) We can say that it is easy for customers to switch
brands, giving them power to compel companies like that of Apple to ensure their satisfaction.
On the contrary, each buyer’s purchase is relatively small compared to the company’s total
quarterly and annual revenues. However, the availability of detailed comparative information
about competing products’ features empowers buyers to shift from one provider to another
making this external factor able to exert a strong force on Apple and other brands.
Thus, this part of the Five Forces analysis shows that Apple must include the bargaining
power of buyers or customers as one of the most significant strategic variables in the business.