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NETW 583 Week 1 Case Study 1: apple case analysis

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Strategy and Competition Final Exam: 50% Students are required to read the “Apple Inc. in 2010” case study and answer FIVE (5) of the following questions. They are required to submit their answers within the stipulated time frame. 1- What, historically, have been Apple’s competitive advantages? Apple’s competitive advantages are its innovation, strong brand and rapid growth. In the Sculley years, Sculley pushed the Mac into new markets, most notably in desktop publishing and education. Apple’s desktop market was driven by its superior software and peripherals. In education, Apple grabbed half the market. Apple’s worldwide market share recovered and stabilized at around 8%. By 1990, Apple had $1 billion in cash and was the most profitable company in the world. Macintosh’s loyal customers allowed apple to sell its products at a premium price. That shows apple’s competitive advantages included customers loyalty. Spindler killed the plan to put the Mac OS on Intel chips and announced that Apple would license a handful of companies to make Mac clones. He tried to slash costs, cut Apple’s workforce, and pushed for international growth. Amelio proclaimed that Apple would return to its premium-price differentiation strategy. Apple’s failure to produce a new OS keep it ahead of Microsoft Windows 95. Steve Jobs acquired NeXT Software and develops OS based on it. Jobs abruptly halted the Macintosh licensing program. Other restructuring efforts involved hiring Taiwanese contract assemblers to manufacture Mac products and revamping Apple’s distribution system from smaller outlets to national chains. Apple launched a website to set up direct sales for the first time. Internally, Jobs focused on reinvigorating the innovation. Apple increased its spending on R&D. Job’s first real coup was IMac in 1998 posted $309 million profit, reversing $1 billion loss. In terms of General external environment, it is difficult to substitute Apple products with other products because of its innovation, creativity, and the technology know-how of easy to use. Apple has strong customers/buyers in the market. Apple has strong suppliers who would give them good deal. Apple has specific complementors such as its own printers and software – iPhoto, some are free, upgradable and downloadable online. The rivalry in Personal Computer Industry is only Dell because it invests 1% of revenue to R&D. It is hard to compete with Apple Computer and Apple products because for personal computers, Apple can function both Mac OS and Windows. SamSung has become Apple’s rival in terms of mobile phones, laptops, notepads, and touch panels. The entry to the market is not easy, otherwise it could be beaten out easily by strong market players in the market or easily taken out by acquisition.

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