International Business Management and Strategy
Mid Term Paper:
“Apple Inc in 2010”
1. Historically, what were Apple’s main competitive advantages? Apple Computer’s 30-year history is full of highs and lows, which is what we would expect in a highly innovative company. They evolved throughout the years into an organization that is very much a representation of its leader, Steven Jobs. Apple made several hugely successful product introductions over the years. As the outset, Apple had many competitive advantages that allowed it to become a profitable business. Apple's innovation has always been its hallmark. Beginning with the first Apple till the iPad; Apple products have change the development of the market many times, especially during the last decade, with the first iPod's lunch. Although Apple's single technologies have not been walkthroughs created by the company itself, it has developed the characteristics of these technologies and combined them in a way that had never been done before. Apple’s PCs relied on proprietary designs that only Apple could produce. When Apple developed the Macintosh, it was very easy to use, had an industrial design, and technical elegance. People craved these qualities in a PC, but the Mac was very slow and there was very few compatible programs due to the proprietary design. To combat this, Apple was able to tap into the corporate sector, as the Mac became the best PC with respect to desktop publishing. It was also able to hold more than 50% of the education sector. In addition, Apple was able to control the Mac completely in both hard ware and software. It was also able to develop its own peripherals that took advantage of a “plug and play” system. Apple's products are popularly considered as very intuitive and, although MP3 players already existed in 2001 or multi-touch surfaces in 2007, products like the iPod and iPhone allow the use of these technologies and devices in a very practical way with an almost vertical learning curve. Besides this easy-to-use, Apple has oriented designs: devices ready to be used with a series of peripherals without requiring prior knowledge. This has led Mac computers to be the new digital devices. Moreover, Apple has always had a proprietary design. Apple has never licensed any of its products or designs. This means that it has always had a wide control over its value chain, from the designs from scratch of their computers, till the software and its marketing or sales. It has a widely vertical integrated business and nowadays, it is even beginning to design its own microchips. This has led to a very unique differentiation that can be hardly found in competitors' products. That is why one of Apple's most typical characteristics are its products' elegant and state-of-the-art industrial designs and superior software (OS) Many of Apple’s current competitive advantages can be linked to its initial competitive advantages. Users in today’s world still value the user experience just like when the Mac was initially introduced. Thus, the current incarnations of Macs offer attractive design, ease of use, good security, and bundled software that all contributes to an “Everything-ready” system that is very easy to use. The “plug and play” system is still in use, though right now, the Mac has incorporated current standards such as USB ports. Thus, the current Mac is a PC that “offers a cutting-edge, tightly integrated user experience”, meeting the needs of most of the market. In addition, Apple has introduced Apple stores, which offers its own unique retail experience, as people looked forward to a good shopping experience when buying computers. There was also a significant iPod “halo effect” which attracted people to these Apple Stores. This synergy along with iTunes definitely helped to boost sales of traditional PC systems from Apple. iTunes is one of the most strategic elements of the Apple pie. Apple...
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