Apple Inc. Case Study
July 22, 2013
Apple Inc. was founded in 1976 by Steve Jobs and Steve Wozniak. Apple designs, manufactures, and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and has a revolutionized the way we purchase music and software applications. Its products and services include Macintosh computers, iPhone, iPad, iPod, Apple TV, consumer and professional software applications, music and applications through the iTunes Store, and a range of accessory, service and support offerings. The company sells its products globally through its retail stores, online stores, and direct sales and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. Currently, Apple has 409 retail stores in 14 countries and an online store with global sales of $16 billion in merchandise in 2011, and they lead the United States retail market in terms of sales per unit area. A few years ago, during a talk with an Apple executive, he mentioned that Apple's goal is to always stay at least two years ahead of the competition. Hundreds of people inside Apple spend thousands of hours doing something that most of its competitors don't do, which is to visualize what customers will want in two to five years and architect every detail of that vision across all of its devices. And the operative word here is details. Apple sweats the details across its entire ecosystem of products to make sure that they fit into this broader vision of the future. While most admit that competing with Apple is difficult because of its many strategic advantages, almost all agree that Apple's approach to moving the market forward in innovation and then showing them the way is actually a good thing. Apple's attention to the consumer experience has been a plus for them and forced them to pay much more attention to the customer instead of advancements. Apple also provides an amazing retail experience for its customers. Anyone who has gone into an Apple store knows why Apple attracts millions of people to their stores worldwide each year. There is one other strategic advantage that Apple has that does not make other vendors happy: Apple's $60 billion cash in the bank. Although there has been suggestion from stockholders that some of that should be given back to shareholders, Jobs and team have argued that they need it for acquisitions and other competitive issues. Now add to this Apple's attention to details and focused brainpower and you get a better sense of how Apple's strategic advantage is a rather big one. Apple’s current strategy is to provide new and innovative products while preserving their brand name. Apple has a social and cultural relationship with its fans and community, like a religion. The community is a way of life: work, create, communicate, listen to music, watch movies, and talk with friends and family, and it is all done with Apple. This community makes Apple strong with respect to Microsoft, and allows it to grow. Yet, it will be interesting to observe the fight between Apple and Google on the OS for Smartphones, which has a big "open source" community too. Apple could lose loyal customers because of the loss of its original value. A manufacturer’s brand operates like an umbrella at the highest and broadest level of the brand, often covering multiple product line brands. Apple is an umbrella brand that adds strength to products under it i.e., iPod, Macintosh, etc. These products can also be seen like sub-family-brands. Design is also important and allows it to be identified as a member of the community. Apple takes it to a whole new level in its sleek designs and color options for all of its products. Even though Apple may have competition closing in on them, their strategy is to keep their current customers happy with new and exciting innovations which keep them coming back. The successful product...
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Thompson, Peteraf, Gamble, and Strickland (2012). Crafting and executing strategy: The quest for competitive advantage. 18th ed. New York, NY: McGraw Hill/Irwin.
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