Today, in 2016, Apple’s share price is around US $108 and the company achieved revenues of US $233.7 billion in 2015 with net income of US $53.39 billion. The Apple Case Study Studentâ€™s Name Institution Affiliation The Apple Case Study Question 4-7. Many companies around the world is using this strategy currently since, efficiency of the manufacturing department is very low because of the poor execution sake. Apple Computers Inc is considered to be one of the innovators in the computer industry. Gates recommended that Apple license Macintosh technology to 3-5 significant manufacturers, listing companies and contacts such as AT&T, DEC, Texas Instruments, Hewlett-Packard, Xerox, and Motorola. If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. In 1997, when Apple was seeking a CEO acceptable to Steve Jobs, Jean-Louis Gassee (then-CEO of Be, ex-Products President at Apple) commented, “Right now the job is so difficult, it would require a bisexual, blond Japanese who is 25 years old and has 15 years’ experience!” Charles Haggerty, then-CEO of Western Digital, said, “Apple is a company that still has opportunity written all over it. Apple, Inc. is one of the most successful companies in the world. In the Apple case study, the fact of impact and effect on apple, which is a US-based company, of the political bonds of the US government with the Chinese government is also taken in the account. In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. The company’s worldwide market share, which was between 7% and 9% had now dropped to 4% and sales were decreasing. This Five Forces analysis, based on Porter’s framework, points to the following strengths or intensities of external factors in Apple Inc.’s industry environment: 1. Likewise, to accomplish the objectives of “Become the leading business in the mobile market”, Apple Inc. should plan their strategies with Ansoff’s matrix which is a well known marketing strategic tool. Since the 1980s, Apple Inc. has successfully used product differentiation to separate its products from those of other electronics manufacturers. Please give me a call.” In 1987, Sculley refused to sign licensing contracts with Apollo Computer. It began its operations from its simple marketing strategy of offering technologically advanced, user-friendly personal computers. Apple customers are a devoted group that understand the superiority that they possess but convincing the other 95% of the world because a rather large task. The release of the Macintosh revolutionized, value of Apple’s products and they are willing to pay a higher price to obtain it. The first strategy that use by Apple Inc for their current expansion strategy is creating innovative idea that slightly different from the competitors that already exists in market and industry. The company has been providing robust technology products and exceptional software services. Porter’s three Generic Competitive Strategies…………………………………………………………. However, the difficulties with these drive the formation of strategic alliances. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. A company attempts to make its strategy a sustained competitive advantage. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. He felt that up-and-coming rival Sun Microsystems would overtake Apollo Computer, which did happen. In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. The Causes of the Problem Two critical issues stand out in the case of Apple and have a direct relationship with the underlying problem. “When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits.” (“Apple - Five Forces Analysis,” n.d.) As a result, Apple get discount for bulk purchasing from the suppliers which in turn, lower down the, Apple Inc was incorporated in 1977 by Steve Wozniak and Steve Jobs. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. Bargaining powe… Apple Inc. is globally renowned as one of the leading companies, especially for its specialization in the personal computers and consumer electronics industry. That was a mistake. Competitive rivalry or competition: Strong force 2. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. What we should have done was calculate an appropriate price to license the operating system. Through thebroad differentiation genericstrategy, Applestands out in the market. They are as depicted below. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. APPLE CASE STUDY SAMSUNG CASE STUDY COMPARATIVE CASE STUDY ASSESSMENT TASK APPLE OPERATIONS STRATEGIES & COMPETITIVE ADVANTAGE . In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. The critic challenges investments, goals, and progress. Table of contents Compare And Contrast The Trait Approach To Leadership. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. By iPad Apple choose differentiation strategy and iPad don’t cannibalize other apple devices like MacBook Air. The only person who’s qualified to run this company was crucified 2,000 years ago.”. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. As a startup company Apple Inc went through several management changes and conflicts which caused the company to lose some of its competitive advantage against companies like Dell, Gateway and Microsoft. This role also resolves disputes, particularly among the other leaders. Why Businesses Need an Efficient Management Information System? He pulled the plug, essentially killing its largest licensee (Power Computing). Case Study on Apple’s Business Strategies. Supportive Communication - Meaning and Attributes, Understanding Different Types of Supply Chain Risk, How to Motivate Your Team Through Mobile Messages, Supply Chain Integration Strategies - Vertical and Horizontal Integration, Apple Computers Inc is considered to be one of the innovators in the computer industry. Apple had issues within its organization. We can describe Apple’s strategy in terms of product differentiation [Pt 1] and strategic alliances [Pt 2]. Which of Porterâ€™s Four Competitive Strategies Does Apple engage in? The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. However, Spindler nixed Gateway in 1995 due to cannibalization fears. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. For this to occur, a product differentiation strategy that is economically valuable must also be rare, difficult to imitate, and the company must have the organization to exploit this. If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers. A non-equity alliance should have explicit contracts and legal sanctions. If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. The Story of an iPhone Video. Nowadays many companies have used the various marketing strategies in order to help them develop the effective marketing decisions to achieve their goals and objective. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. “If Apple had licensed the Mac OS when it first came out, Window wouldn’t exist today.” – Jon van Bronkhorst, “The computer was never the problem. Read about "Apple differentiation strategy" Initially under Steve Jobs Apple’s long-term strategy was “to bring an easy to use computer to the market” (Yoffie & Slind, 2008). We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. Apple’s Premium Pricing Strategy, Product Differentiation ... Steve Jobs, whose strategy for Apple had four pillars: Offer a small number of products. Case Study: Apple, Inc. ... following of loyal customers. Focus or Niche strategy…………………………………………………………………………………... Creativeness and utilities are connectedly associated with one name “Apple INC. ” which symbolize an enchant accumulation of engineering genius, dedication, innovation and prosperity in spite of incompetent behavior. Apple Inc. in 1997 vs. Apple Inc. in 2013 were in two completely different scenarios. When reviewing the history of Apple, it is evident that this attitude permeated the … Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. Apple is headquartered in Cupertino, California and was founded by Steve Jobs. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. 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. Combining the old with the new resolves the connection to the past dilemma. A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes. Apple Corporation: Case Study on Pricing Strategies Apple is an American multinational company best known for developing and selling electronic devices and software worldwide. The primary economic value of product differentiation comes from reducing environmental threats. Through product differentiation apple was able to achieve success and become one of the leading organizations in the world’s market. This site uses Akismet to reduce spam. Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers. What Should You Include in a Companies Operating Agreement? Required fields are marked *. The company is most well-known for the iPod, a digital music player and Macintosh, a personal computer released in 1984. 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