One of the major concerns of Apple is that if it tries to get an alternative to production in China, it will increase the cost of production, resulting in an increase in prices of Apple products. Apple turned the corner in 1993. Bargaining power of buyers or customers: Strong force 3. It also serves as a meter of how products are designed. 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. Think different in the world of technology and bring greater revenue. Strategic position of Apple Inc .................................................................................................................. 2 The business was worth $400 million. We were also naïve to think that the best technology would prevail. To resolve these dilemmas, there must be an appropriate organization structure. 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. Apple had one of its critical points in history in 1999 when it introduced the iBook. If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. For example, Apple and Foxconn case, when the US factories produce the same products as Foxconn, the output of the US factories is only 80 percent of Foxconn and product defective rate is more than twice than Foxconn although Apple invest manpower into US factories. This case study is to begin with a situational analysis that will encompass the industry structure, competitive situational analysis and the firm's self-analysis. The company achieves the unrivaled differentiation of surviving from the beginning of the industry and is still operating prosperously. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. By recruiting Steve Jobs Apple did its first steps. These forces can limit or reduce the firm’s market share, revenues, profitability, and business development potential. Table of contents There is economic value in strategic alliances. In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. The primary economic value of product differentiation comes from reducing environmental threats. According to Gustin, (2011), the differentiation strategy is an integrated set of actions taken to produce goods or services at an acceptable cost that customers perceive as being different in ways that are important to them. 4. The case is about the US-based technology giant Apple Inc.’s (Apple) journey in China. Justify your opinion. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. Analysis of Apple Inc. business Strategic Unit (iPad unit) Your email address will not be published. Apple’s Premium Pricing Strategy, Product Differentiation ... Steve Jobs, whose strategy for Apple had four pillars: Offer a small number of products. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. The objective of this paper is to examine the business level and corporate level strategies for Edgar Company Apple Inc. What Should You Include in a Companies Operating Agreement? Combining the old with the new resolves the connection to the past dilemma. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. The following are some comments about Apple’s no-licensing policy. He pulled the plug, essentially killing its largest licensee (Power Computing). For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. Case Study on Apple’s Business Strategies We can describe Apple’s strategy in terms of product differentiation and strategic alliances. Through product differentiation apple was able to achieve success and become one of the leading organizations in the world’s market. To continue a product differentiation strategy, Apple must continue its appropriate management of innovation dilemmas and maintain the five leadership roles that facilitate the innovation process. Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining cooperation from “The Big 5” Music companies–BMG, EMI, Sony Entertainment, Universal, Warner. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. Part 1: Product Differentiation. Apple, Inc. was founded in 1976 by Steve Jobs and Steve Wozniak. Apple attempts to increase market demand for its products through differentiation, which entails making its products unique and attractive to consumers. The mentor coaches, counsels, and advises. Time will tell whether that happens. It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. This case study covers the history of Apple and their strategic approaches implemented by the CEO’s over the years to make it one of the most successful and sustained company in the world. Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. A strategic alliance can be a sustained competitive advantage if it is rare, difficult to imitate, and the company has an organization to exploit it. 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. The only person who’s qualified to run this company was crucified 2,000 years ago.”. Learn how your comment data is processed. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. That explains why the top three mobile handset unit sales ‘leaders’ (Nokia, Samsung, LG) are outselling Apple in raw units an astounding 23.5 to 1, yet for all of that effort, combined they are garnering only 82 percent of Apple’s profit level. 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. “If we had licensed earlier, we would be the Microsoft of today.” – Ian W. Diery, Apple Executive VP, I am aware that I am known as the Great Satan on licensing…I was never for or against licensing. This allowed iTunes Music Store online to offer over 200,000 songs at introduction. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. Apple Inc. is globally renowned as one of the leading companies, especially for its specialization in the personal computers and consumer electronics industry. Case Study: Apple, Inc. ... following of loyal customers. (Porter’s generic strategies with particular reference to Apple Inc) For instance, Apple pioneered the PDA market by introducing the Newton in 1993. Managerial freedom within broad decision-making guidelines will resolve the institutional control dilemma. This site uses Akismet to reduce spam. Philip W. Schiller, VP of Worldwide Product Marketing for Apple, stated, “iPod is going to change the way people listen to music.” He was right. Case Study 4 – The Apple of Your i 1. Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. Co-founded by Steve Jobs in 1976, the company was named under Apple Computers Inc. and its initial product Apple IIe gained relative popularity and success. Apple had issues within its organization. Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business. That was a mistake. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. Introduction .................................................................................................................................................. 2 Apple has a history of shunning strategic alliances. Apple is headquartered in Cupertino, California and was founded by Steve Jobs. Why Businesses Need an Efficient Management Information System? Apple Inc. in 1997 vs. Apple Inc. in 2013 were in two completely different scenarios. To realize our ambitious plans we must focus all of our efforts in one direction.” This statement was in the wake of Apple divesting significant software holdings (Claris/FileMaker and Newton). 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. Apple has focused on broad differentiation strategy that involves … This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. Music distributor have to make specific investments to broadcast music on … However, within these similarities, both companies have different corporate cultures, which differentiate the companies’ ideals. Apple engages in “industry-wide differentiation” of Porter’s competitive strategies by differentiating themselves from their competitors by providing better services and products to their customers. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer 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. Apple being strictly a personal computer company decided to venture into marketing other products like the iPod, a digital music player, and. This generic strategy focuses on key features that differentiate thecompany and its information technology products from competitors. It began its operations from its simple marketing strategy of offering technologically advanced, user-friendly personal computers. In the case of Apple, there was the opportunity to manage risk and share costs facilitate tacit collusion , and manage uncertainty. For instance, Apple Bargaining powe… Product Differentiation Apple prides itself on its innovation. However, the difficulties with these drive the formation of strategic alliances. A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes. Focus on the high end. The company is most well-known for the iPod, a digital music player and Macintosh, a personal computer released in 1984. The matrix is as follows: In 2001, Apple hit another important historical point by launching iTunes. Apple officially opened its first store in China in 2008, though prior to that Apple products were sold at premium prices in the Chinese grey market. Apple expanded rapidly in the Chinese market through flagship stores and distribution points in China Contents In 1997 Apple Computer was in deep trouble. 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. It doesn’t think outside the box in terms of strategic imperatives, like building differentiation, growing margins or defensibility. A non-equity alliance should have explicit contracts and legal sanctions. Focus or Niche strategy…………………………………………………………………………………... An equity alliance should have contracts describing the equity investment. The company’s strategy was. They have done a good … 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 was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. He felt that up-and-coming rival Sun Microsystems would overtake Apollo Computer, which did happen. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. 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. Apple prides itself on its innovation. Summary of Apple Case Study Analysis 1.0 Introduction 1.1 Introduction of Apple: Apple Inc. is the most famous name in the technology sector, it is an innovative electronics manufacturer, which is giving benefits to the consumers and to the suppliers, and the company is using successful strategies in the market so the best results could be achieved. Although Apple eventually realized the economic value of strategic alliances, it should have occurred earlier. Apple launched its first product ‘Apple 1 … Strategy implementation is considered the toughest stage in the strategic management process. The case study cites the underlying competitive rivalry within the market as the primary challenge that Apple faces currently as Cook and the other vital managers devise new strategies to counter such competition. 4.0 Strategy Implementation. Assembled in China” on lots Apple’s products. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. The Causes of the Problem Two critical issues stand out in the case of Apple and have a direct relationship with the underlying problem. 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