...apple computer 2012 Apple Computer 2012 1. What, historically, have been Apple’s major competitive advantages? Early on, although not always profitable, Apple Computer was known for their unique products. A quote worth noting from an analyst, “the majority of IBM and compatible users ‘put up’ with their machines, but Apple’s customers ‘love’ their Macs.” This is truer knowing what Steve Jobs strives to achieve with the company as well as the employees. Job was especially fanatic about industrial design, simplicity, and product elegance. The employees love working for Jobs, however it is very difficult. The employees connect with the passion that Jobs has in this work ethic. “My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary.” Overall, a strong leader in Jobs and Cook has been an advantage of Apple as well as their well-groomed employees who are handpicked by Jobs. Another historical advantage that Apple has is their use of vertical integration. Since they make all the aspects to their products, doing so adds great value to the company and therefore provides a strategic and competitive advantage. 2. Analyze the structure of the personal computer industry using Porter’s Five Forces. Are these dynamics favorable or problematic for Apple? Bargaining power of buyers In terms of technology: PCs, smartphones, and tablets, the product lines of different companies need to be unique. Buyers have...
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...What, historically, have been Apple’s competitive advantages? From the beginning, customer loyalty has been one of Apple’s competitive advantages. Apple owners were much more attached to their Apple computers than PC users. Early on Apple pushed into the publishing and education markets. They were able to grab half the market for education. Their computers were easy to use, had sharp designs, and high quality. Apple also used a plug and play system with all its own peripherals as a major advantage. But with their own hardware and software, Apple’s computers were very slow and came with very few compatible programs. After Steve Jobs came back to the company, he instilled strong teams and leadership. He put the focus back on innovation by increasing R&D. He also establish Apple’s original strategy of premium products and customer service. He then introduces a website to set up direct sales with customers. Jobs partnered with Microsoft and added USB connectors to become more compatible with other applications and software systems. This eliminated a huge disadvantage Apple previously had. Apple products are also harder to duplicate and substitute because of it’s own proprietary design. Industry foresight has been a huge competitive advantage of Apple. Their innovation has shaped the consumer electronics industry. It has also kept competitors on their toes. Apple sets the standards for the industry. With their customer loyalty, Apple has become a strong brand name. They have...
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...Question 1: What, historically, have been Apple’s competitive advantage? Historically, Apple’s competitive advantage has been product differentiation and premium pricing strategy. Apple is known for offering high-end innovative products. Mike Markkula, investor and entrepreneur, was able to attract a lot of venture capital which allowed Apple to place a significant investment into R&D in order to create its premium products. Unlike other “Wintel” firms that manufacture only hardware, Apple controls both hardware and software placing it into a unique position of providing consumers with a complete desktop solution. Their competitive advantage was driven by software such as Aldus Pagemaker and peripherals such as laser printers. This allowed Apple to capture half of the market laying the foundation for their premium pricing strategy. Top of the line Macs were sold for as high as $10,000 and had a gross profit of over 50%. Apple capitalized in the premium priced PC category capturing 91% of the market share. Lower labor and operating costs enabled Apple to achieve very high gross margins Appx 3 in markets traditionally dominated by many low cost alternatives. Apple has also taken advantage of its marketing genius in differentiating the iPhone from other smartphones. Advertised as a trendy, sophisticated, and distinguished combination of hardware and software Apple has also used the iPhone to make a powerful impact on the cellphone market. While only occupying less...
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...1. What historically, have been Apple’s competitive advantages? Apple’s main competitive advantages have been their innovation, large customer base, and large customer loyalty. From its conception, the main goal of Apple was to create cutting edge products that were both aesthetically pleasing and easy to use. They create each computer from scratch, allowing them to be innovated and upgraded as soon as they create a new technology. Due to the fact that they have been creating their own new technology, Apple products are hard to imitate or substitute. Another reason why they have been so competitive is because they have always been the leader in new technology such as touch screen, mp3 players, personal and desktop computers. With this, they have created a large and loyal customer base which allows them to charge their customers at a premium. 2. How sustainable is Apple’s competitive position? In regards to the technology market, their position is pretty sustainable as long as they continue to make their own and new technology. As long as they continue to do this, their customer base will be safe because their product will not be able to be imitated. Due to copyright laws and the rareness of the technology Apple uses, other companies cannot directly copy what Apple does and therefore Apple maintains the advantage. As long as Apple keeps putting money in their R&D department, they will remain a major player in the technology market. 3. Evaluate Apple’s strategy...
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...1. Historically, what were the Apple’s major competitive advantages? We can identify the Apple’s major competitive advantages through The Potential Source of competitive advantage Model by Michael Porter. Apple successfully differentiates its product as the high-quality PC product. While IBM PC has relatively open system and low price strategy, Apple concentrates on their loyal customers. Apple had relatively narrow customer base in PC market. But their products were a lot different from the standard of the market. Loyal Apple customers had some kind of pride in their Apple PCs. So we can say that Apple had built strong relationship with the customers. This relationship allowed Apple to set premium price on their Macintosh. This discernable differentiation was really helpful to gain high margins but it was also a disadvantage for Apple. IBM PC has relatively low price. So the market share of IBM grew quickly. IBM dominating PC market, Apple had lost significant amount of customers. And their revenue dropped. Also, Apple’s limited compatible software was a problem. IBM’s open system spread out around the world quickly, but Apple stuck to its closed system. 2. Analyze the structure of the personal computer industry over the last 15 years. There were also few successful PC manufacturers, like Hewlett-Packard, Dell, Acer, and Lenovo. These companies stably had held their grounds. Apple made their PC and software exclusively. This was the reason why Apple PC...
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...1. How attractive is the PC industry? Conduct an industry analysis on the PC industry (A) in its early stages, and (B) in its later stages. Comment on how the industry has evolved. In personal computer industry, we considered two different time periods. The early stage includes development from 1980s to the early 2000s, and the later stages starts from early 2000s to now. Threat of Entry Early Period PC industry has low entry barrier which is brought by IBM’s entry to the market. In 1980s, IBM adopts open architecture strategy which outsources its operating system (OS) and microprocessors to Microsoft and Intel respectively. This strategy also has several implications: (1) product design and feature information is also available to other potential competitors, (2) IBM does not possess any patents related to product design, which allows competitors to copy the product designs. For small companies, open architecture significantly reduces the risk of market entry as it significantly reduces capital investment for firms to develop their own OS and microprocessors. Another industry environment that sustains lowers entry barrier to 1990s is network effect, which is defined as increase in products’ value due to increase in its popularity among consumers. As IBM converts PC as the mainstream and adopts open architecture strategy, Microsoft and Intel collaboratively develops a new standard known as “Wintel”. Manufacturers, ranging from Dell to generic companies, are able to use...
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...1. What, historically, have been Apple’s competitive advantages? Apple, one of the most famous, valuable, and competitive company in nowadays marketplace. Although it was once almost bankrupt, its competitive advantages of innovation and differentiation bring Apple to the leader position in the industry. At the beginning of Apple, it was only focus on making computers. However, with Steve Jobs’ innovation, it started to diversify its product lines and successively introduced iPod, iPhone and iPad to the market. The first and most important thing Jobs did to make his products different from the others is build Apple’s own operating system（OS）on PCs while almost all the rest of the market are running on Windows. Combine the OS with chips made by Intel, Office software generated by Microsoft and developed their own iLife suite, Macintosh is a well-developed and efficient computer. Apple’s OS was firstly used in its computer, Macintosh, but it is also adapted well on iPhone and iPad in the later dates. From the year 2001-today, Apple keep on innovating impressed products, software and applications. In the year 2001, launch a large storage MP3 and first legal music download side: the iTunes Store. Then, in 2007, released iPhone along with the App Store- the first application center that allow customers to download apps on mobile. 2010, iPad came out with iBook application. As Apple continues developing, applications like iMessage, Facetime and iCloud came out...
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...APPLE CASE: Apple Inc. in 2010 Ipad: 2010: 3rd major innovation launched by Apple over last decade (revolutionary product). 80’s + 90’s: Mac personal computers. Late 80’s: Strong brand, rapid growth, high profits. 96’: almost went bankrupt. Then: Apple Computer=> Apple Inc + innovative non-PC products in early 2000s (=mobile device company). 2009 fiscal year: Iphone+Ipod= 60% of sales (total sales= $43 billion) Apple stock had risen more than 15-fold since 2003. -Macintosh sales growth: faster than the industry in recent years. -Apple’s share of the worldwide PC market had remained below 5% since 97. Apple’s History: Steve Jobs + Steve Wozniak founded Apple in 1976 which led to the release of the Apple II in 1978). Mission: bring easy-to-use computer to market. It sparked a computing revolution and Apple became the industry leader. 81: arrival of IBM which Apple’s competitive position. IBM PC was a relatively “open” system that other producers could clone (Microsoft DOS operating system + Intel microprocessor). Apple was practicing horizontal and vertical integration (no hardware license to 3rd parties). Apple marked a breakthrough in ease of use, industrial design and technical elegance but its slow processor speed and lack of compatible software limited sales (Apple net income fell by 62% between 81 and 84). IBM gained more market share and emerged as the new standard for the industry. 1985: Jobs was forced out and John Sculley recruited...
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...Apple Case Team Assignment 1. What historically have been the sources of Apple’s competitive advantage? (15pt) Apple, since its conception, has been focused on making a superior personal computer. Apple was, at first, ahead of their competition due to their improvements upon the personal computer. Apple was adamant on creating an easy to use personal computer with exceptional design and style; creating a premium product. Apple was focused on being different, rebellious and cutting-edge. Steve Jobs coined the motto, “It’s better to be a pirate than join the navy,” which exemplifies the rebellious and unique nature of Apple’s culture. Innovation and aesthetics were, in Steve Jobs’ eyes, the competitive advantage of Apple. When Apple shifted away from this vision, it took major hits to their profits and lost much of its market share to its competitors. This is because Apple tried to implement the advantage that IBM and other competitors had, which was low-cost mass market appeal products. Apple even started creating desktop peripherals and other products not true to the identity of the brand. This marred the image of Apple and confused its identity; ultimately making Apple lose their competitive advantage. Apple went from a unique, rebellious, and innovative company to just another mass-producing computer company with inferior technology. Once Steve Jobs returned, after all of the chaos, they went back to their roots of being an innovative company focused on creating...
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...1) Historically, what were Apple’s major competitive advantages? * Apple came back with their differentiation strategy. It was supported by a strong promotion campaign, with the goal of to ‘differentiate the Macintosh amid intense competition in the PC industry. Therefore Apple has always been a very innovative manufacturer and for a long time tried to produce a unique product which is easy to use. Apple’s competitive advantages are its control of software and hardware, marketing, digital asset management, retail strategy, product differentiation and Steve Job’s strategically decisions. Decisions such as switching to Intel processor resulted not only reduced power use & design ease but also made Macs able to run windows on it. Apple retails concept implements direct selling, creates first hand experience to customers, customer education, after sales service etc. With these advantages Apple built a barrier to five forces that shapes industry competition. * 2) Analyze the structure of the personal computer industry over the last 10 years. How have the dynamics of the PC industry changed? The shakeout of the decade-old personal computer industry came earlier than expected. Starting in 1990, a PC price war started to brew. Various companies began to cut prices on their existing product lines and at the same time rolled out lower-priced PC models. At the beginning of the 1990s the structure of the personal computer industry changed dramatically after...
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...Historically, what were Apple’s major competitive advantages? Since 1976, the Apple Company used a differentiation strategy on their operations. The company only offer one time which is a computer aiming for the whole market, but they came back to their differentiation very soon. Apple has always been a very innovative PC manufacturer. Although the products have some weaknesses, the innovative role still gave Apple a lot of attention. The major competitive advantages can be divided into several parts. First of all, the hardware design is elegant. There is no better word for it. Apple has the best-designed hardware from an aesthetics point of view of any vendor. For the cellphone market, people are crazy with the advanced and developed iPhone. Because it is so impressive that make your life and work easier. Secondly, another advantage is Apple has total control of their software (OS system) and hardware, marketing strategy, digital asset management, retail strategy and product differentiation. For example, the retail method of Apple includes direct selling; apple has their own store, which can create firsthand experience to customers. Besides, apple has efficient corporation with the cellphone carrier, At&t, Sprint, Verizon. Customers have choice to use different companies’ service. This would make the iPhone affordable to the people who have low income. Last but not least, Steve Jobs, the former CEO of Apple; he used his strategic decisions to make their product...
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...to relatively easy to produce, the price of them became highly competitive. On the other hand, the importance of microprocessor and OS has increased because they were from just few sources. Since assembling computers was not a very difficult job, thousands of manufacturers built PCs around and OS mainly supplied by Intel and Microsoft. Most companies outsourced the production of components manufacturing contractors at high volume plants in low-cost location like Asia. Large contract manufacturers began to build entire PCs for brand-name companies, assembling basic computers in Asia and shipping them to geographic hubs to complete. Many manufacturers changed their operation from a build-to-stock to a build-to-order to reduce cost by reducing inventory. There have been four main types of PC buyers: Business, home, government and education. Business buyers buy direct from vendors or distributors. Consumer markets are serviced by super stores and web-based retailers who can provide service all types of demand at discounted price. Decreased innovation made PC industry saturated with decreasing profit margin. Now, the industry is characterized by low profit margin, oversupply, and highly standardized products. There were top four suppliers: Dell, Compaq, HP, and IBM (IBM sold its PC division to Lenovo of China in 2004 and HP and Compaq were merged in 2005) 2) Historically, what were Apple’s major competitive advantages? Apple can make everything for...
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...questions. They are required to submit their answers within the stipulated time frame. 1- What, historically, have been Apple’s competitive advantages? Apple’s competitive advantages are its innovation, strong brand and rapid growth. In the Sculley years, Sculley pushed the Mac into new markets, most notably in desktop publishing and education. Apple’s desktop market was driven by its superior software and peripherals. In education, Apple grabbed half the market. Apple’s worldwide market share recovered and stabilized at around 8%. By 1990, Apple had $1 billion in cash and was the most profitable company in the world. Macintosh’s loyal customers allowed apple to sell its products at a premium price. That shows apple’s competitive advantages included customers loyalty. Spindler killed the plan to put the Mac OS on Intel chips and announced that Apple would license a handful of companies to make Mac clones. He tried to slash costs, cut Apple’s workforce, and pushed for international growth. Amelio proclaimed that Apple would return to its premium-price differentiation strategy. Apple’s failure to produce a new OS keep it ahead of Microsoft Windows 95. Steve Jobs acquired NeXT Software and develops OS based on it. Jobs abruptly halted the Macintosh licensing program. Other restructuring efforts involved hiring Taiwanese contract assemblers to manufacture Mac products and revamping Apple’s distribution system from smaller outlets to national chains. Apple launched a website...
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...memorandum is to provide an analysis of the consumer technology giant, Apple Inc. Here we will briefly mention Apple’s strategic position in each of the markets that it has become involved in, to better understand how this company has been able to attain financial success despite near bankruptcy in 1996. How Attractive is the PC industry In 1970, a ‘personal computer’ was sold for a ridiculous cost of nearly $100,000 in today’s money, which were only bought and used by enthusiasts. In 1975, Apple Computers was founded by two college students, who created the first PC with the intention that anybody could use it, named Apple I. A year later they introduced an improved version named Apple II, the computer that symbolized the explosive growth in the PC industry. Competition soon arose; by 1981, IBM partnered with Microsoft to launch their first PC, which eventually reached a peak of 85 percent market share within the industry. With the strategic implementation of selling their computers in department stores and the decision to make the PC an open system, IBM’s success was undoubtedly evidential. The latter factor soon proved to be the cause of Apples downfall in the 1980’s, who reverted to a close architecture Macintosh Computer, while IBM invited hardware and software companies to develop on the basis of their computers. Early Stages Industry Analysis: Both IBM and Apple were leaders at the beginning of the boom, setting the course for clone makers who also wanted to get a taste...
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...for people who wanted a computing device. As Apple moved into the market and started designing new devices, along with innovation from other companies, the PC industry has shrunk. Early on, the PC industry could be viewed pretty heavily as an oligopoly. There were several main companies that dominated the market, including Dell, Hewlett-Packard, and Microsoft. Not much has changed over the years in the industry, though. While there are new companies in the market, it is still very heavily dominated by several big companies. The case even mentions that Hewlett-Packard, Dell, Lenovo, and Acer accounted for over 50% of worldwide PC shipments in 2011. In order to conduct an industry analysis on the PC industry both at the beginning, and in the later stages, Porter’s Five Forces and the PESTEL framework can be used. Porter’s Five Forces that can be used to analyze the industry are barriers to entry, supplier power, customer power, threat of substitutes, and rivalry. For the early years of the PC industry, the barriers were relatively high. There were only a few brands that had a lot of brand name power and market share. Creating new technology and building computers would generally require quite a bit of money to do. In Apple’s Case though, the expertise was there, so it required some, but not as much capital as other companies for Steve Jobs and Steve Wozniak to create their first circuit board, and subsequently, their first computer. The supplier power was...
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