Apple’sMajor Competitive Advantages
Historically, what were Apple‘s major competitive advantages? To have a competitive advantage a company should have a right strategy, consequently to have distinctive competences and as a result to have good resources and capabilities, Inch bring high profitability to the company. 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. By recruiting Steve Jobs Apple did its first steps.
They have done a good research and according to the results offered their production. By having good marketing and sales and good customer responsiveness Apple gained loyal customers.
This means that Apple has good capabilities and resources. Moreover, Apple has done an innovation in the world of technology with a high quality by creating different types of products and new hardware and software design. The new technology made the customers satisfied and they felt unique by holding the Apple products in hand. 2. Analyze the structure of the PC industry. How have the dynamics of the PC industry Changed?
Are the dynamics favorable or problematic for Apple? Am going to analyze PC industry by help of Porter’s 5 forces: -Rivalry: The current rivalry is very high and Apple faces competition from MM, HP, Dell and etc. The rivalry is very strong and aggressive and the PC industry also has very low switching costs. – New entrants: This threat is low because for setting up this industry the companies need considerable investment to make and the existing companies have already made strong brand awareness, so new entrants would be unwilling, although there is scope for White-box PC’s having a share of 36% world-wide in 2006.
Power of Suppliers: In this industry there are two kinds of suppliers’ memory chips, keyboards, disk drivers which have lots of suppliers and microprocessors and SO suppliers which are a few. In this case suppliers adjust the pricing and quality and make their products more attractive, so competition is high which leaves them in a low supplier power position.
-Power of Buyers: Switching costs are low. The buyer power is in a strong position. This can be handled by only companies who have strong product differentiation that would increase the switching costs. Substitute reduces: The more differentiated the product is, the less the probability of switching to a substitute will be. In case the prices are higher the company should provide localization for high prices. Generally, the competition in PC industry is very high and coping with changes in this sector makes life difficult for the players.
These dynamics are not favorable for Apple, however Apple has been able to keep its technological perception and designing approach and turned the threats to opportunities to come out of this dilemma. 3. How sustainable is Apple’s competitive position in AMP players?
Smartness? Analyzes of AMP players by Porter’s 5 forces: -Rivalry-Not so high: Competition by Tunes. Other online music stores, such as Amazon.
Com, Anapest, and Walter. Com offered individual songs at a discounted and competitive price compared to that of tunes, and they became biggest competitors for Apples tunes music store. Competition by Mobile segment: The mobile phones can be real competitors for pods, as they offer the same capacity of number of songs. Apple should be innovative, otherwise, other companies’ products which have lower prices will be considered as real threat for pods.
Competition by Music Streams: Internet radio sites offered free music streaming and gave the possibility of creating playbills. -New entrants-Low: Tunes launch was a razor and blade business in reverse method.
This did not bring much profit to the company but its impact on pod sale has been very notable. This means that pod’s sale increased by 6. 5 times after the launch of tunes. The customers were attracted by this launch, as they could download the songs from the large storage of tunes. It soon contained movies that could be rented or downloaded.
Tunes was a disadvantage for the competitors. After pod, other companies, such Samsung, Sanding and Creative came with their products, but they had market of 10% and below. The pod is not Just an AMP player, it encompasses many good ideas as it got benefited of its Mac computers. Besides, the design of pod was very stylish.
-Power of Suppliers-High: The main suppliers in this Industry are the song writers, singers and players who are the threat. One of the other threats is the possibility of downloading free songs from different websites.
Although this encourages the AMP Player market, it is a real threat for tunes. -Power f Buyers-Low: The number of buyers is increasing, however, they look for innovative and updated products, their needs have changed, as they are more knowledgeable to use different software. pod has its loyal customers and they pay the price for their favorable products to look stylish.
Thus, the threat is low. -Substitute products-Not so high: The substitutes for pods are the mobile phones, CD players, radio, etc. Tunes music store and other online music stores make the downloading easier. Moreover, most of the people use phone which is a real substitute for pod and decreases the sale of ‘Pods. Analyzes of Smartness by Porter’s 5 forces: -Rivalry-High: There are large numbers of competitors in the market for phone, such as Samsung, LEG, Monika, etc. But, it is remarkable that phone is in the third position of all the smartness.
– New entrants-Low: phones are very similar to the Apple’s computers and ‘Pods.
Nowadays the smartened producers concentrate on adding new features to their products, such as high resolution cameras, internet browsers, dictionaries, large memory, games, applications, etc. Apple offered its products with a much higher price than other existing smartness in the market. But the loyal customers of Apple continued using Apple’s products. For producing its smartness, Apple spent around $150 million to develop its phones in 1.
5 year. They also tried hard on the memory of their phones with different capacity B) of storage.
According to the researches, the applications of phones are much more than those of the Android’s. -Power of Suppliers-Low: Nowadays more developers are willing to create applications for Apple, which decreases the competition (87% phone APS, 81% android APS). As the smartness do Just more than calling and receiving calls, here are lots of applications connected with music playing, cameras, etc. Apple was facing the problem of telecoms operator’s locked policy, which has been solved by cooperating with ;T, however it does not support the atlas memory, it is not a big deal for Apple.
Power of Buyers-Low: Nowadays the need of using smartness is increasing day by day, and people replace many other devices, such as calculators, Matches, cameras, notebooks, etc by these phones. In addition, phones are very stylish and the youth are very attracted towards these devices, which again increases the usage of phones. Substitute products-Not so high: phone does not have a real substitute, however pad is considered as a future threat for phone, as it contains all of the features of a notebook and smartened. 4. Has Apple finally solved their long-standing problems?
Is the company sustainable? In 1997 Apple was in a deep trouble. Its worldwide market share which was fluctuating between 7-9% in 1984 had decreased to 4% and sales were falling.
In July 1997, the expounder of Apple, Steve Jobs, who had been fired from Apple in 1985, returned to the company as the CEO. The problems had occurred because first of all Apple’s SO was not at all compatible with most of the available software which was designed for Winter machines. Second, Apple didn’t actively encourage development by third party programmers and preferred to develop its own software in house.
Mac SO had a very small size of the market and was not compatible with Microsoft office, Inch had a vast usage in the world. At that time Mac had lots of disadvantages comparing to its competitors.
By Steve Job’s return to the company, many changes Nerve made to Macintosh to get rid of the disadvantages and be more competitive in the market. One of the main changes was the porting of the Mac SO to the Intel architecture and the switch from IBM Power PC to Intel processors. This helped Apple to fill the speed gap between itself and Winter competitors.
This switch helped Mac to run Windows and most Windows programs. Jobs also managed to secure a deal with Microsoft to develop a Mac version of the popularization Office software. This was the reason that most of the developers were now willing to write programs for Mac. These changes introduced by Jobs have made ethnocentrism competitive again in the PC market and fixed most of the long-standing problems with the Macintosh brand. These changes raised Apple’s market share in US from 4% to 8. 5%.
Len this manner, Apple will be sustainable and can keep up by growing in legitimacy, transparency and responsiveness. . With Steve Jobs having passed away, does apple require a charismatic leader to continue their long-term growth? It’s almost two years that Steve Jobs has passed away, but we still can notice his influence on the products of Apple. Apple is poised to decline in the post-Steve Jobs era. After presenting phone 5, it is exciting to know if Tim Cook who has replaced Jobs Nil be able to handle his work. It is obvious that Jobs was irreplaceable, but having Cook as the new CEO has not influenced Apple in a bad way; however the expectations are all different now.
Apple which is one of the most valuable companies of the world has had an increase of &265 billion in the value, in the times to Coo Ks People expect Tim Cook to be deterrent and snow his individual Morning method to the world. If Cook continues Job’s way, Apple will have real problems in the future, and it needs new innovations and patents. The problems coming down the road for Apple will stem from Cook’s lack of charisma and the company will fall from being a “great” firm to one that will be Just “good,” with a cline in product innovation and revenue. . What are the key take-sways from this case? In my opinion, we all have a lot to learn from Apple and specially the “magic man” Steve Jobs. First of all it is important to keep in mind, that for a company to be successful it is very important to be innovative and responsive to the needs and changes of the market.
Second, in order to be competitive, the company should collaborate with other companies also. Third, a company should always be ready to have a right person who will be able to replace someone important in the company.
