Apple Iphone

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Apple iPhone

Business Strategy
MBA 648

Prepared by:
Dima Hage Hassan 111300363
Nisrin Naamo 111300394
Tasneem AlMajidi 112300103

Table of Contents

Executive Summary ………………………………………………………………….. 3 Introduction ……………………………………………………………………….….. 4 SWOT Analysis ……………………………………………………………………… 5 Michael Porter’s five forces model …………………………………………………... 8 Differentiation ………………………………………………………………………..11 Conclusion and Recommendations…..………………………………………………14 References ……………………………………………………………………………15

Executive Summary
Apple has been one of the most successful companies worldwide in designing, manufacturing and selling desktop and notebook computers, portable digital music players and iPhones for the last couple of years. Apple’s business strategy was highly focused on differentiation and was successful in grabbing a lot of opportunities by being the first mover in a couple of industries and specially the smart phones industry. This report sets out to provide a historical background about Apple in general and iPhone in specific. We will discuss Apple’s business strategy in terms of differentiation, a detailed SWOT Analysis of the company and a 5 forces analysis of the industry. While the smart phone industry continues to grow, iPhone seems to maintain a stable growth rate for a couple of reasons such as the industry’s low entry barriers and the aggressive competition on the price as well as the release of new smart phones that are serving both the recreational and the professional lives. Apple is a master in differentiation, it built through the years a very strong brand image and reputation and in terms of functionality, its products and iPhone in specific is durable, reliable, high tech and designed in a very innovative way. Since Apple wants to maintain and grow its market share in the smart phone industry, it should reevaluate its strategy and start focusing on building a device that can be used by business people. Also it should reconsider its pricing strategy in a market where the competition on price is becoming more and more aggressive especially if it is looking to enter new markets such as Africa and South America.

Introduction
Apple was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. Their first product was the Apple I which was a personal computer kit hand built by Wozniak. In 1977, Wayne sold his share for $800 and the company was incorporated. In 1980, Apple had a staff of computer designers and a production line then it went public at $22 per share creating more millionaires (300) than any company in history. In 2006, Apple stock price reached over $80 per share ($665 in 2012) and its market cap surpassed that of Dell. Despite its growth in the computer industry (8% of desktops and laptops in US), it remained behind competitors using Microsoft Windows. (www.wikinvest.com/stock/Apple_(AAPL)/Price_Range_Common_Stock) Apple has evolved from a computer oriented company to a digital entertainment company. It incorporates most of its product lines, such as the Mac, iPod, iTunes online store and iPhone into its mission statement. Steve Jobs projected since the iPhone’s initial release in 2008 that he intends for it to capture 1% market share by the end of 2008. According to market research firm Gartner, the iPhone has actually captured 20% of smart phone sales during the third quarter of 2007, a market share surpassed only by long established Research in Motion (RIM) BlackBerry, a still maintains a commanding 41% share. Based on the above figures, iPhone, with its first smart phone product has been able to surpass the quarterly sales of Motorola, Nokia, and Palm, an incredible feat in itself. (www.macrumors.com/2008/02/05/iphone-with-28-of-u-s-smartphone-marketshare-for-q4-2007/ ) The company became a leader in the digital entertainment industry with the iPhone alone generating more than $150 billion of revenues since its launch. A quarter of a billion iPhones have been shipped...
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