Points to cover in answers:
Vision, Mission and objectives
a) Describe Apple Inc’s Vision for its iPhone business in China.
Answer should draw from
Brand image slogans associated with Apple: Liberty regained; innovation, passion, hopes/dreams/aspirations/people power through technology (page 9) -
really sleek, cool hardware, great software and a cool, hip image” (Clemons, 2007) -
Many firsts in innovation: the mouse, digital music player (iPod), music store service (iTunes), communication/computing technology convergence (iPhone - computer on the street) – Time magazine invention of the year; innovation led company known for user friendly devices -
Derives much from founder’s vision (still with the company)
The vision could be: To expand our international presence by providing the most advanced connectivity and gaining a share in the Chinese mobile phone market
b) Provide a Mission Statement for Apple iPhone in China.
Add specificity to the vision.
Mission statement example: To enter the Chinese market with the iPhone, and to successfully compete with existing players and be number one in five years.
What are Apple Inc’s strengths in terms of resources and core competencies in their home market?
Resources: technology/innovation capabilities, skills and creativity of employees, global company with financial strength. Draw from VRIN/VRIO model.
Core competencies: in technical innovation, legendary user friendliness, new product development & previous market penetration success (1.4 million iPhones sold in the first 4 months of launch in developed markets). Core competency should give access to a variety of markets through many end products. Apple’s core competency of innovation driven user-friendly high-technology product development opens a variety of markets (computers, personal music/ store, communication device/ mobile computing).
External environment, threats and Opportunities
What are the opportunities and threats including the ‘grey market’ for Apple iPhone in China?
Answers are not expected to give detailed PESTLE or Porter’s Five Forces analysis. They are expected to identify opportunities and threats by drawing from the following points:
Political: Mention/draw from- Mobile phone market rising rapidly (figure from Exhibit II here) after 1994 - 1997 restructuring/partial deregulation; duopoly of China Mobile (GSM) and China Unicom (CDMA) as mobile telecom service providers (2008: China Telecom added, also state-owned). Fast growth of both subscriber base. In 1998, the government issued licences and encouraged domestic brands entry (both in GSM and CDMA). Government is a strong regulator of connectivity (affects iPhone) Technological: big technological changes with 3 different standards (T of PESTLE). Hardware supply grew: 80% with Nokia, Motorola and Ericsson, 20% with the rest including Philips, Alcatel, Siemens – all foreign. Economic: China growing rapidly.
PORTER’S FIVE FORCES
Threat of new entrant: Licences issued in 1998 when Ningho Bird, Konka, TCL entered, later Huawei, Lenovo, Amoi. Developed local handsets cheaper, built distribution channels (New entrant threat still remains). Exhibit IV and V relevant for market share figures etc. Can happen again to the advantage of local companies. Rivalry: Above and foreign brands have widened product range; competition increased in all ranges. Buyer bargaining power: Large choice now; very price-conscious buyers so will switch away from smartphones, however also attracted to advanced features (a plus for iPhone). Customers exist for all segments Supplier bargaining power: increasing for telecom operators as they are government backed, also China Mobile (not with iPhone) funding R&D for handset makers for product development and improve 3G service. Threat of substitutes: Low- landphone, email, etc – connectivity...
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