Apple Case Study

Topics: Apple Inc., IPhone, ITunes Pages: 5 (1824 words) Published: September 9, 2013
1. Historically, what were Apple’s major competitive advantages? To have a competitive advantage a company should have a right strategy, consequently to have distinctive competences and as a result to have good resources and capabilities, which bring high profitability to the company. In our case the competitive advantages of Apple is differentiation and innovation, high quality, great customer responsiveness, high level of marketing and having strong sales department. By recruiting Steve Jobs Apple did its first steps. They have done a good research and according to the results offered their production. By having good marketing and sales and good customer responsiveness Apple gained loyal customers. This means that Apple has good capabilities and resources. Moreover, Apple has done an innovation in the world of technology with a high quality by creating different types of products and new hardware and software design. The new technology made the customers satisfied and they felt unique by holding the Apple products in hand.

2. Analyze the structure of the PC industry. How have the dynamics of the PC industry changed? Are the dynamics favorable or problematic for Apple?

I am going to analyze PC industry by help of Porter’s 5 forces: -Rivalry: The current rivalry is very high and Apple faces competition from IBM, HP, Dell and etc. The rivalry is very strong and aggressive and the PC industry also has very low switching costs. -New entrants: This threat is low because for setting up this industry the companies need considerable investment to make and the existing companies have already made strong brand awareness, so new entrants would be unwilling, although there is a scope for White-box PC’s having a share of 36% world-wide in 2006. -Power of Suppliers: In this industry there are two kinds of suppliers` memory chips, keyboards, disk drivers which have lots of suppliers and microprocessors and OS suppliers which are a few. In this case suppliers adjust the pricing and quality and make their products more attractive, so competition is high which leaves them in a low supplier power position. -Power of Buyers: Switching costs are low. The buyer power is in a strong position. This can be handled by only companies who have strong product differentiation that would increase the switching costs. -Substitute products: The more differentiated the product is, the less the probability of switching to a substitute will be. In case the prices are higher the company should provide justification for high prices. Generally, the competition in PC industry is very high and coping with changes in this sector makes life difficult for the players.These dynamics are not favorable for Apple, however Apple has been able to keep its technological perception and designing approach and turned the threats to opportunities to come out of this dilemma.

3. How sustainable is Apple’s competitive position in MP3 players? Smartphones?

Analyzes of MP3 players by Porter’s 5 forces: -Rivalry-Not so high: Competition by iTunes: Other online music stores, such as, Napster, and offered individual songs at a discounted and competitive price compared to that of iTunes, and they became biggest competitors for Apples iTunes music store. Competition by Mobile segment: The mobile phones can be real competitors for iPods, as they offer the same capacity of number of songs.Apple should be innovative, otherwise, other companies’ products which have lower prices will be considered as real threat for iPods. Competition by Music Streams: Internet radio sites offered free music streaming and gave the possibility of creating playlists. -New entrants-Low: ITunes launch was a razor and blade business in reverse method. This did not bring much profit to the company but its impact on iPod sale has been very notable. This means that iPod’s sale increased by 6.5 times after the launch of iTunes. The customers were attracted by this launch, as...
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