Apple Case: How to Maintin Against Fierce Competition
Apple Inc. has become a world leader by building its empire around strong competitive advantages that it was able to maintain against fierce competition. One of the most valuable is the company’s customer base, loyal to the culture and the brand. On the operations side, Apple can also count on high profit margins thanks to its efficient supply chain, worldwide presence of its distribution system and retail structure (iTunes, App Store, etc.). Moreover, a continuous focus on innovation and R&D gives the company the advantage of constantly proposing products combining elegant design, simplicity and performance. Also, while offering narrow product lines simplifying consumers’ decisions, Apple has an important competitive advantage by always bringing complementary devices, software, and content part of a “Digital Hub” strategy.
Personal computers (PC) segment remains an important component of Apple’s strategy. Even with a declining interest from consumers to the profit of tablets and smartphones, this industry has very high rivalry with new technologies and important developments like the ARM design expected to enter the PC market in 2012. However, Apple anticipated this change and invested in two ARM design companies. Furthermore, it is not facing a sole big competitor as market leader changed many times in recent years, but the company does not have a strong presence in emerging countries that represents high potential markets.
Looking at the profit margins in the industry, Apple is able to operate a much efficient level, due to its extremely successful positioning in high-end PC market and effective cost control. On the other hand, standardization of components might be viewed as an unfavorable development. Also, Apple secured a partnership with a powerful and very competitive brand (Intel) for its microprocessors, but finds itself at risk because of little bargaining power. Moreover, even if it has hedged its position with iWork, the company still depends on the
Personal computers (PC) segment remains an important component of Apple’s strategy. Even with a declining interest from consumers to the profit of tablets and smartphones, this industry has very high rivalry with new technologies and important developments like the ARM design expected to enter the PC market in 2012. However, Apple anticipated this change and invested in two ARM design companies. Furthermore, it is not facing a sole big competitor as market leader changed many times in recent years, but the company does not have a strong presence in emerging countries that represents high potential markets.
Looking at the profit margins in the industry, Apple is able to operate a much efficient level, due to its extremely successful positioning in high-end PC market and effective cost control. On the other hand, standardization of components might be viewed as an unfavorable development. Also, Apple secured a partnership with a powerful and very competitive brand (Intel) for its microprocessors, but finds itself at risk because of little bargaining power. Moreover, even if it has hedged its position with iWork, the company still depends on the