Apple, Inc. Case StudyBUSI 400-003September 24, 2008
Dominant Economic Characteristics
Large Market Size
Steady Growth Rate
Number of rivals is constant/low
Scope of competitive rivalry is intense
Low differentiation of products
Product innovation is key in competition
No surplus of supply as it relates to demand
Pace of technological change is high
Collective Strength of Five Forces on Profitability:
Rivalry among competitors – Strong
Threat of potential entry – Weak
Power of substitutes – Moderate
Power of suppliers – Strong
Power of buyers – Moderate
Changing societal concerns
Attitudes and lifestyles
Diffusion of technical know-how across more companies and countries
Noah’s bubble chart for Competitive Position of Major Companies Key Success Factors
Overall Attractiveness &Competitive Environment
high demand for mp3 and digital music
High profit margins
cost of keeping up to date with technology
Competition is fierce
Broad differentiation strategy
Unique attributes & designs
Not easily copied
1st to market
Control of Hardware AND Software
Cost of constant R&D
Cost of switching
iPod vehicle connectivity
Retail store growth
Microsoft “Sync” in Ford cars
Dell and HP low-budget computers
Weighted Competitive Strength Assessment
Bubble chart from matt????
Strategic Issues Analysis
iPod market maturing
Rising star in the iPhone
What to do about Microsoft?
Maintain image position in market
Strategic Inflection Points
Develop better laptops
Blend trends with products
Build quality assurance above customer expectations.
Strategic Vision & Objectives
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone. Vision statement
“To make a contribution to the world by making tools for
the mind that advance humankind.”
Grow computer/laptop share by 10% in next three years.
Maintain current mp3 market share over next 3 years, after this time, reevaluate mp3 market presence in market.
Increase presence in mobile phone industry through innovation of iPhone by 5% of market in five years.
Increase capabilities of OSX and iLife by 7% over 4 years.
Maintain the growing increase in EPS from 20% a year to 30% per year by 2012.
Functional Area Missions and Task Statements
R & D – allocate 10% resources of R & D to create a competitive advantage over the competition’s innovative process Production – develop more efficient, production alliances to increase production Marketing and Sales – develop multimillion dollar advertising campaign in response to Microsoft’s Human Resources – develop incentives for apple employees to maintain customer loyalty
R & D innovation
Achieving market share goals
Maintaining a Capable Organization
Staffing the organization...