Apple Case - Competitive Advantage

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Apple competitive advantage ……………………………………………………………… p 3

The personal computer industry ………………………………………………………….. p 6

Apple’s competitive advantage in PCs …………………………………………………... p 9

The introduction of IPhone as a blue ocean strategy ……………………………………. p 13

Apple’s competitive position in smartphones …………………………………………… p 19

How does the death of Steve Jobs affect Apple’s overall strategy for the next 5 years …. P

References list …………………………………………………………………………….

I. Apple’s competitive advantage

In order to explain Apple’s competitive advantage, we need to look at Porter’s generic strategies. Porter defines 3 strategies: * Differentiation focus
* Cost focus
* Cost leadership

Apple strategy is based on differentiation. In fact, Apple ambition is to be unique on computer and new technologies market. That is the reason why Apple differentiates its products but also its stores and its services. In order to be unique on it segment, Apple offers an other vision of computers and music players. Apple stores are build on the same basis: a futurist concept, with an uncluttered aspect.

The Apple main differentiation is that it produces its owns softwares, that means it does not used Microsoft ones. Thus, its consumers have to use Apple services if they have any problems with their laptops or other Apple’s products.

Apple success begins in 1977 with Apple II. It is the first success of Apple in computers market. This laptop is used as an education tool. It is the first laptop with a screen and a keyboard. The following year, Apple III is commercialised, and it was the first laptop with disk drive blended in it. Apple was the first company to offer an operating system possessing a graphical user interface with icons and programs. In 1984, Apple decides to bring out the Macintosh in order to compete and unhinge IMB’s PC (personal computer) launched in 1981. Macintosh is a sort of Canadian apple. The success of the Macintosh is based on its simplicity: Macintosh is intuitive. Moreover, its success is also based on the computer mouse.

The success story continues with the IMac. The design of this computer breaks all conventional codes of computers industry. In fact, this IMac has a new aspect: it declines in different colours that consumers can choose. And the central processing is included directly on the screen. Apple was the first one on the computer industry to offer this type of laptops. The IMac is dedicated to Internet use. The IMac knew a huge success and was a way for Apple to win some market shares. Apple created the Ibook and other products that found success.

Steve Jobs wanted to link all new technologies: cameras, laptops, and mp3. That is the reason why IMovie was created in 1999. It is the birth of “Digital hub”. In 2001, the new IMac integrated IMovie but also ITunes a new platform used for music applications. In 2002, in addition to those programs, IMac integrated IDvd: a system to burn your own dvds, and IPhoto: a program to stock and organize your photos.

Apple created IPod: the first differentiation of Apple products. IPod was revolutionary: it has a capacity of 1 000 songs, its usage is intuitive, it design is futurist. IPod is a technological innovation.

ITunes Music Store is another success for Apple: a website where you can legally download music. It was launched in 2003. Steve Jobs ambition with this website is to show that music will have a future even if hacking is a reality. One song cost 99 cents. This store, as all Apple products, is really intuitive and easy to use for consumers. IPod permits to increase Apple reputation, and to increase others Apple products sales. Thanks to ITunes Music Store and Apple collaboration with big names of music industry, Apple embraces 70% of music online market shares. In 2004, the number of IPod sold is more important than IMac sold.

In 2004, Apple brings out IPod Mini and IPod...
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