Apple Inc., 2008
1. What were Apple’s competitive advantages?
The PC (personal computer) industry is fairly competitive, making it important for a company like Apple Inc. to stand out among its rivals. Although all computers are not created equally and each model can have vast differences, it is sometimes difficult for the end user to differentiate between brands. One competitive advantage for Apple is that Macs are known to be different than all other brands of PCs. To a consumer it sometimes seems like there are two types of computers: Macs, and all other brands. Adding on to this advantage, there are usually positive differences that separate Macs from all other brands. Macs are known to be more “user-friendly” and are advertised to be used right out of the box. They are also known to be more secure than other PCs, since most viruses cannot attach Apple computers. In the Apple Inc., 2008 case study, an analyst is quotes as saying, “The majority of IBM and compatible users ‘put up’ with their machines, but Apple’s customers ‘love’ their Macs” (Yoffie & Slind, 2008). This sort of affection toward a product leads to another competitive advantage that Apple has capitalized on: brand loyalty. When Apple turned its direction more towards up and coming technology, such as the iPod, iTunes and now the iPhone, consumers already trusted the Apple name and thus were more apt to buy the products. Apple created the iPod in 2001 when MP3 technology was relatively new to consumers. There are portable music players made by other brands, but Apple’s iPod quickly became the industry leader and has remained in that position. A wise choice by the company was to make iPods compatible with Windows operating systems. Initially they could only be used on a Mac, but by opening the technology to other PC users, Apple quickly gained customers. Apple spends a higher percent of their budget on research and development than other competing companies which has been a strong advantage for the company. Technology is ever-changing at this point in time and consumers demand that products are the “newest” and the “fastest.” In recent years Apple has been the first company to launch popular new technology, including the iPod, iTunes, the music store, and the iPhone, with its large range of applications. While there are now many different versions of smartphones, the iPhone was the first of its kind to revolutionize how a phone is used. Essentially Apple combined a computer, a portable music player, and a phone into one handheld device. Apple’s focus to create new technologies that combine various functions has been incredibly successful in the technological age. The company also launches new versions of their devices each year. This helps the company because even people who already own an iPod, for example, are interested in upgrading to a new version in the following year or two. One last advantage for Apple has been its ability to create products that work together. For example, Apple created the music store iTunes to work with the iPod. Consumers buy the iPod for a set price, but then end up spending much more money through Apple on purchasing music. Creating complementary products like these boost the success of the company. If Apple can continue to differentiate their products from others, be the first to create new technologies that are changing the way consumers live day-to-day, and launch complementary products, they will continue to have advantages over their competitors.
2. Analyze the dynamics of the PC industry. Are these dynamics favorable or problematic for Apple?
Overall the PC industry has become more and more advanced through the years and this could be a result of Apple. In our case study, we saw the history of Apple Inc. unfold from its humble start in 1976 to the introduction of the iPod, as well as the iPhone. The analysis did indicate...
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