Apple's Competitive Advantage

1297 words (5 pages) Essay

10th Jan 2018 Marketing Reference this

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Apple’s since its inauguration brought an easy to use computers to the market. So that users would not face any problems while using Apple products. Apple practiced horizontal as well as vertical integration. Apple relied on its own designs and refused to authorize its hardware to third parties. Apple used superior software which made help them to grebe the market share. Apple offered a complete package of desktop solution which includes hardware, software and other things. Apple always used typical design for its products. In the era of Spindler’s (1993-1996), he opt the strategy to expand Apple products to international market.

Apple’s competitive advantage are its control of software, Hardware, retail strategy, product differentiation and most important one is Steve Job’s strategically decision making. For the distribution system, Apple launched a website for direct sales for the first time. Apple also spent more money on its Research and Development. Apple’s current competitive advantages can be linked to its initial competitive advantage because user’s now-a-days value the user experience just like when Mac was initially introduced (Bajg, 2012).

Personal Computer Industry and dynamics

IBM brought PC’s into mainstream in 1980’s. Microsoft and Intel products dominated the personal computer industry and more people owned their personal computer. Overall industry continued to boom through early 2000’s. In 2000 and on wards PC’s were very fast, have more memory and storage. But the prices of PC’s continuously dropped. As a result, PC manufacturer’s average profit margin fell down. New PC emerged as well. Also more expensive laptops gained the attraction of the market. But as the price of PC’s fell down, their sales volume increased. As there is expansion of growth so competition in the market also increased (Rich, 2012).

Due to the increase in competition, prices of the products fell down and it provided consumers with more options. There are five categories of Pc buyers: Home, Small and medium sized business, government and corporate education. The biggest segment is represented by home consumers. There are four main vendors of PC: HP, Dell, Acer and Lenovo. There are two types of suppliers; one who make product with many sources and other make products such as microprocessors and operating system (Aquino, 2012).

By viewing the PC industry it can be said that dynamics are very favorable for the Apple. There are good signs for Apple due to certain reasons. Competition is very high in today era and every company wants to provide best products or services so that customer can be retain. Mostly top four vendors are dealing with desktops and laptops. The preferred personal computers may no longer take the form of a desktop or laptop. Indeed a portion of the personal computer industry has already shifted their preference from a desktop or a laptop to a tablet or iPaD. There are many reasons for this change, including convenience and mobility. So there is chance for Apple to come up with new products and capture the market (Rich, 2012).

Apple competitive position in Personal Computers

Since its inception, Apple’s mission is to bring as easy-to-use computer, difference in design elegance to market. Apple also practiced horizontal and vertical integration instead of open system. It relied only o its own designs ad also rejected to license its hardware to the third parties. When Sculley’s was the CEO during 1985-1993, Apple targeted low cost computer. Apple also made an alliance with IBM for OS development on Intel platform, but that ended without any result. One of the Apple main strength is to offer its customers a complete desktop solution; which is simply “Plug and Play”. Apple target market is now increasing. Because people want convenience and they need products which are easy in use (Bajg, 2012).

The creation of Mac boasted Apple sales. And Mac customers allowed Apple to sell its products at a premium price. During 1993-1996 Splinder made the strategy to expand Apple to international market but it did not help Apple in long term. Steve Job took over as CEO in 1997 and restructured company on the original strategy. Jobs also launched a website for direct sale and also he increased its spending on R&D to get further knowledge about the products. Exhibit 3 shows Apple’s worldwide PC market share from 1980-2009. In 1980 Apple has the very high market share. But with the passage of time its market share started to decline. And during 1994 market share fell down substantially. When Steve Jobs joined the company again it started to increase gradually. Now Apple is gaining market share slowly (Rich, 2012).

Apple’s Competitive positioning in MP3 players

Ipod set Apple on the high growth path. Initially iPod was the portable digital music Players based on the Mp3 standard. It has very good design, large storage and a simple user interface. Early MP3 players only stored hour music, can stored up to 1000 songs. But with the passage of time Apple launched new and innovative design one after another. In 2010, Apple has more than 70% of the MP3 market share. Gross margin for IPod is around 40% in 2007. The cost of main component is flash memory which is more than half of the billing material. In MP3 market there are very less competitors for Apple so it will easy o gain more market share for Apple. So in MP3 market Apple performance is very good and it is increasing as Apple delivers innovative designs which are very attractive to the customers (Aquino, 2012).

Apple Competitive position in Smart Phones

Steve Jobs launched the first iPhone and smart phone industry began. Apple smart phone Market share is high. More than 2 billion applications have been downloaded from the Apple iphone App Store. Apple mission is that iPhone gets better with every new app. Apple has just great job of continuously improving the iPhone with new features and capabilities. Also Steve Job did excellently with I Tunes and iPod. And now he is doing it with it iPhones. Apple iPhone created a new class of phone. Apple invented the market and other mobile device maker is chasing Apple. The main competitors of Apple are Google Android, Nokia and Blackberry. Apple provides the best services in iPhones (Bajg, 2012).

iPad and new iPad mini

iPad is the mixture produced by Apple after lending iPhone and iPod technology. iPad is the best way to experience the web. It has revolutionized traditional ways of surfing the internet. It views whole pages in portrait or landscape on the screen of large multi-touch. It’s also deals with checking e-mail and sending email as well. It is also world’s largest cookbook. Storage of iPad is very great and also it has large display. It is also easy to access different books from iPad. iPad is use in businesses, education, health and consumer usage. So iPad is very useful in different areas. And its demand will be increasing in next days. As now a day’s consumer wants more convenience and mobility (Aquino, 2012).

According to Rich (2012) iPad mini is a another amazing product launched by Apple. It has a smaller screen as compared to iPad. iPad is cheaper than iPad. Nd the reason for its cheapness is that it has no retina display. iPad mini is lighter and thinner than iPad. Also it has less powerful processor and it uses a nano SIM. It has fewer functions than iPad. But due to its size and thickness it is very easy to keep in the pocket. In future it will be very helpful for the people to some extent.

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