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Strategic Management - Apple Case

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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 was not compatible with other software and products. Apple tried to forge an alliance with IBM, but eventually it went fail.

PC market also had changed from desktop to laptop. In 2000, Laptop PC represented over 50% of PC sales. PC becomes smaller, portable, easy to use products.

The performance of PC grew really fast but the Price of PC grew relatively slow. This fact contributes small

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