Apple Computer, Inc. was created by Steve Jobs and Steve Wozniak in April 1976. It started as a computer software and hardware manufacturer. Apple Computer, Inc. is famous for having one of the largest and most loyal customer bases that have helped to make concrete consistent growth for the company.
In 2007 Apple Computer Inc., became Apple Inc. to mirror its expansion into the consumer electronics market while still upholding its traditional focus on the personal computer. Apple Inc. has changed from being known as strictly a computer company into a diverse technology company. CEO Steve Jobs is not only the company leader he is one of its major creators He refers to it as a magical device that will change the world.
Apple introduced the iPod, a portable digital music player based on the MP3 compression standard, in November 2001. Thanks to its sleek design, it soon became a symbol of the Digital Age.
To better perception from Apple process will describe Apple’s mission and vision in continue;
MISSION AND VISION OF Apple:
At the outset, it can be interesting that know what was mission and vision of apple.
Vision: Every person around the global should taste at least one apple product.
Mission: Apple is committed to bring the best personal computing experience to consumer around the world through its innovative hardware,software,and internet offering.
Historically, what were apples major competitive advantage ?
At the first for define what the competitive advantage of apple is; we can look at what kind of resources apple has. According to Apple’s marketing department, it is important that Apple computers differentiate from Other computers because of the ‘attractive Apple design factors .
So it seems a valuable resource and imitable resources that competitors cannot copy these factors.
Another Key resource is the apple stores, these stores are valuable resources as they create quite some revenues, Brand recognition and the building of resources is another imitable resource that is a key resource for Apple. As Apple was created during the 1980’s it has had a long time to develop its brand and accumulate resources.
However, what competitive advantages has apple historically?
Competitive advantage has two part , cost advantage and differentiation advantage (Porter, 1998),that Apple was chose differentiation advantage, for prove that ,will argue this issue below:
Apple pursues a differentiation strategy since it started in 1976. Only one time they offered a computer aiming for the mass market, but very soon decided came back to their differentiation strategy. This differentiation strategy was at one point supported by a strong promotion campaign, with the goal of to ‘differentiate the Macintosh amid intense competition in the PC industry. Apple has always been a very innovative PC manufacturer. Apple always managed to launch PC innovations on the market so the innovative role still gave Apple a lot of attention. Apple could create a high value image of the Apple PCs and made the customers ‘love’ their Macs. These loyal customers allowed Apple to charge premium prices for their products.
In other hand at the outset, Apple had much competitive advantage that allowed it to become a profitable business. Apples PCs relied on proprietary designs that only apple could produce. When Apple developed macintosh,it was very easy to use ,had an industrial design, had technical elegance. People craved these qualities in a PC.
Apple makes a difference in the pc market and industry through its innovative product design.macintosh has been the powerful tool to build the success story of company.
Apple was able to control the Mac completely in both hardware and software. It was also able to develop its own peripherals that took advantage of a ‘plug and play’ system.
Many of Apples current competitive advantages are come forms its initial competitive advantages. Users in today word still value the user experience just when the Mac was initially introduced.
At the main view, Apple’s competitive advantages are its control of software and hardware, marketing, digital asset management, retail strategy, product differentiation and Steve Jobs’s strategically decisions. And Macs offer attractive design, ease of use, good security, and bundled software . ‘Plug and play’ system is still in use, though right now.
Apple’s competitive advantage in main view was:
Value in stade of lowering price
Emphasis on direct retailing
Design and qulity excellence
What did apple fail to build on these advantages to lead the industry?
All of PC producer is that none have rare resources as the parts used in building PC’s are largely standardized same as apple. Another problem is that there is always a substitute for a certain PC.
Non-substitutable resources are also limited, as the products mainly need to have the same functions.
Thus, companies need to largely rely on brand name and quality, but quality increases price.
Apple faced with this problem, as its high quality products are more expensive than computers from other companies.
Currently Apple’s share in the PC business is relatively small, thus it can be concluded that wasn’t possible for them as sustainable competitive advantage and the Current resources of apple weren’t enough to create a great and sustainable competitive advantage.
Thereby that seems that Apple’s PC Business does currently have sustainable growth.Part of this growth can be attributed to the Halo effect of the(I)Brand(ipod,itune),that has attracted successful due to products like iPod and iTunes and thus increase the interest in Apple products including the Macintosh computers.
In other hand apple did heavy investment in research and made huge cost for apple and apple has to bear the cost of components and part that it purchases, this expense made bad situation for apple to take advantage and lead the industry.
How has structure of the personal computer industry changed over the last 20 years ? what are the implication for the profitability of personal computer manufactures ? please argue your point using Michael porter 5 forces.
One of the main Drivers of Computer industry change. Gone are the days when people would rely on single personal computers to do their day to day activities – be it business or leisure. In particular the business world demands information to be accurate, at hand and usable for improving decision making. Here is some elements to change the structure of computer industry that are mentioned below :
Time saving is a major driver in the Computer industry. There is a constant demand for faster transactions. Thanks to the internet, connectivity between people and between customers with businesses has become rather instant. Still the demand to cut the time to perform operations even further exists.
Innovations and R&D:
The main reason for this trend is the fact that customers (both people and businesses) only find an upgrade viable when the new product is rich in terms of innovations and can offer feature that the old product or service was not providing. As such, hundreds of millions of Dollars are spent on R&D to ensure companies have the lead over competitors when it comes to innovations. That Apple was very strong in this case.
With the pace that computer industry transforms itself, businesses find themselves forced to upgrade their computer infrastructure every few years. This becomes especially the case when a new wave of changes and innovations are established.
This by itself drives the computer business to always create value for their customers who are ready to take on new, more effective and more efficient technologies.
There is a saying not very old that in order to improve; you must make use of technology. However, before doing so, one must learn how to use technology itself. Thus, IT related education and training has become a considerably large business all over the world.
The structure of the PC industry :
For understand the structure and implication for profitably of PC industry can use the theory (Michael porter 5forces) and apply it to the case as to determine.
Five Force Analyses:
Bargaining power of suppliers:
Sometimes quality components can become a struggle within the PC industry as competitors try to obtain these components and make sure that others cannot use these technologies.
Considering this, a supplier’s power could be changed because of this situation. These days, “declining average selling prices are problematic for the suppliers, which in turn could lead to a decrease in new technologies as these suppliers will have lower incomes and thus less revenues to spend on R&D.
Bargaining power of buyers:
There are a number of different entities to which Personal Computer industry.
However, Apple’s target includes people who have special demands for a computer. For example, in the publishing industry; Apple’s computer was the only effective machine as it allowed companies to edit things digitally. Apple still remains in that industry, because of the fonts, the system, and options it brings. Many companies continue to use Apple’s computers as it is expensive to change the entire system, thus companies are afraid to switch to other systems.
Treat New entrants
is a large enough barrier to make it difficult for new companies to enter this market. Producers continue to lower their prices to try and attract new customers. This large barrier makes sure that new entrants cannot easily start a business. Hence, Entry Barriers are so high that threat of new entrants entering the market is low.
Threat of Substitutes force
Other PC’s from other companies are treated as substitutes for Apple’s computers; the same is true the other way around. Thus in this market there are a number of substitutes which have an influence on the sales of each producer.
Competitive rivalry (Industry competitors force):
Competition between PC company always increasing. That needs special political things such as Cutting costs for required to survive in this a situation.
Moreover, Apple is facing three aspects of conflict in the Personal Computer industry.
By reaching other software producers to the same level with apple can make hard competition for apple.
But Considering this output of five force analysis, can show that why and what are cause to PC computers was profitable for apple.
Apple with using differentiation strategy and innovation made difficult and dangerous situation for the new entrance, indeed with this thing could little decrease the bargaining power of buyer because special costumers chosen apple and this is very important to make progress for apple.
According to the above analysis bargaining power of supplier was low, so all of this evidence cause to PC industry was profitable for apple.
QUESTION 4 :
Evaluate apples strategies since 1990(focus on Scully and the return of Steve jobs) ? How Scully try to save apple ? How did Jobs?
Main factor to success and upswing of apple was Steve jobs. Apple strategy was based on Steve Jobs strong leadership and vision based on technological innovation and strong marketing strategy. Apple for make smooth way for strategy based clear vision and mission. That explain below:
Apple’s vision was : every person around the global should taste at least 1 apple product.
Apple’s mission was : bring the best personal computing experience to consumer around the word through its innovative hardware, software, and internet offering.
In the case of marketing apple focus on diversification and cost effective strategy and innovation technology based device markets.
Indeed the original strategy of apple was turned into a competitive advantage.control of software and hardware, digital asset management, retail strategy, marketing, product differentiation and Steve Jobs’s strategically decisions are Apple’s competitive advantages.
John Sculley had an important position in Apple’s vision. He good knows how Apple can change the world driven by a vision. He worked hard by discipline with creativity and innovation.
Scully knews how to make the apple’s duty correctly and in the right way.
He really knows that the Apple’s future depends on him, and try to make discipline and creativity. He tried to make the future better. But what did do Scully to save apple:
When Steve Jobs intended to remove Scully insidiously from the company, he was quite concerned, but he chose the company’s welfare. For all that at Apple, John Sculley took several measures to save the company, which had become chaotic. In the course of a major reorganization and put the broken parts of the company together. His restructuring saved a lot of costs and consolidated the company. In1986 was Apple’s worst year with a decline in net sales from $1.92 (1985) to $1.90 billion. Gradually, Sculley could persuade software companies, which had turned away from Apple, to write applications for the Macintosh.
Steve Jobs as CEO of Apple displayed the attributes outlined in many leadership theories. For making progress and save the company he was charismatic, powerful, supportive, flexible and indeed, transformational Steve Jobs fits best with the trait theory which is also called the “great man” theory of leadership. Innovative company due to Steve Jobs amazing management style. Jobs has faced a lot of different market situations along with his career and almost in all he has succeeded. According to the case, which describes some typical behaviours of charismatic leadership? To be accurate, Jobs possess a vision, willingness to take personal risks to achieve that vision, sensitivity to follower needs, intelligence, self-confidence, level of energy and activity as well as task-relevant knowledge. Firstly, the vision of Apple is: to focus on software rather than hardware; Moreover, Steve took many risks to achieve their goals to save apple. He could with his style taken apple from bankruptcy to being huge profitable.
According to the john kotter theory can analysis what did do Steve to save and achieving goals:
John Kotter leading change
Establish a sense of urgency
jobs shrewdly examine the market but corporate excesse exit
Form a powerful guiding coalition
Apple’s board share jobs view
Create a vision
Rebirth of brand / unic marketing strategy
Empower other to act on the vision
Coordination between divisions strong discipline encourage staff to perform
Plan for and create short term wins
Visible increase in product quality ,diversification into new industries and expansion of customer base.
The iPod: why has apple been so successful with iPod business?
The production of iPod was a risky game for apple.
Apple has successfully achieved a branding of the iPod like no one else because they were the first to offer an elegant and comprehensive solution between hardware and content.
Key success factors are significant to future success of industry firms. These factors encompass competencies, market achievements, resources, competitive capabilities and product attributes. It is most important for the strategists to be familiar with external environment in order to distinguish the most important competitive success factors. The key success factors of apple in the iPod project are describe below:
Innovative activities for the iPod:
The stylish mp3 player that started its decade of distraction. Before apple unleashed the iPod, no company really did a good job of integrating the player, the computer, and the software that connected the two.
I tune and network:
The iTunes program to help Mac users manage their growing digital music collections. Use the network for downloading music files over the internet without the permission of copyright.
Advertising and differentiation:
Throughout the history, apple has been recognized well for its advertisements, which are planned to imitate set up of marketing its brands to creative persons. Their most campaigns include the ‘think different’ 1990s campaign, and the 200 ‘iPod people’.
They were the first company to offer the full solution in a one-stop shop, and the successful branding at the youth, apple computer has created the mass market for others to follow.
Actually, core competencies of apple make success in iPod business.
apple has been the leader of the consumer electronic industry and music. The core competencies responsible behind the success are mainly the differentiation strategy. It offers the best designed hardware and incomparable software in iPod.
The main factor for success of iPod is cannot decide its sustainable competitive advantage because the industry has intense rivalry. Then apple use innovation and differentiation key to make success business.
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