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A Case Study of iWatch

CHAI, Siyu LI, Wei LI, Yinting LI, Shuangyi ZHANG,Zhixin

SWOT Analysis + Porter’s Five Forces + Business Model Canvas + Blue Ocean Strategy

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SWOT AnalysisInternal1. Strength:

a. Branding & Existing loyal customers.b. Easy to use. c. It uses iOS system connecting with iPhone

directly. Such supportive system facilitates UX of Apple users.

d. Aesthetic product appearance and hardware/ software design.

e. Stable supply chain. 2. Weaknesses:

a. High Priceb. Battery capacity limit

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SWOT AnalysisExternal1. Opportunities:

a. High brand awareness / brand loyaltyb. The increasing popularization of smart wearable

devicesc. Bandwagon/ conformity d. Rising consumption levele. Profitable watch market

2. Threatsf. Strong Competitors (Xiaomi, Fitbit, Samsung,

Moto-360)g. Customers are fickleh. Differentiationi. Public concern over privacy issues of smart watchj. Lack of necessity

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Business Model Canvas

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Porter’s Five ForcesThreat of New Entry--relatively low

1. Time and cost of entry: long develop period & high cost2. Specialist knowledge: need both developer & designer 3. Economic of scale: hardware 4. Technology protection: copyright5. Barriers to entry: relatively high

Threat of Substitution--high6. Substitute performance: 7. Substitution within the industry. e.g. Xiaomi, Fitbit, Samsung

Gear, Moto-3608. Substitution from other industries which provides similar function

as iWatch. a. E.g., further developed smart phone; other wearable smart

device like ring, necklace.9. Cost performance: Customers will consider more about cost

performance of the product instead of performance itself 10.Cost of change: relatively high

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Porter’s Five ForcesSupplier Power--low

1. Numbers of suppliers: around 152. Size of suppliers: large3. Uniqueness of service: low labor fee; low technique content e.g.

Foxconn4. Ability to substitute: Those suppliers offer non-substitutable

service so that it’s kind of hard to switch to other suppliers 5. Products are differentiated or there are built-up switching costs

Buyer Power--low6. Number of customers: large7. Differences between competitors: large8. Price sensitivity: low; demand will still increase because of brand

loyalty9. Ability to substitute

Competitive Rivalry-- fierce10. Number of competitors: more than 10 competitors11. Quality differences: relatively large12. Other differences: feature/performance; design; price; homogeneous

functionality 13. Switching costs: relatively high 14. Customer loyalty: high

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Blue Ocean Strategy

Strategy Canvas

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Blue Ocean Strategy

Conclusion:

iwatch is not a Blue Ocean Strategy but it wins in the Red Ocean. iwatch keeps creating new features to beat other competitors in the same industry market.

Eliminate1. Diversity/ richness

of the appearance design

Raise1. Battery 2. Resolution (retina)3. Gravity sensor4. Software

Reduce

N/A

Create1. Voice recognition 2. Payment system

(Apple pay)

ERRC Grid

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