Apple Strategic Analysis

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Strategic Analysis of Apple Inc.
Brian Masi
Capstone Strategy Course (MGT440), Professor Linda Cohen Barney School of Business, University of Hartford December 15, 2009

MGT 440, December 2009

Masi

Table of Contents

Overview Executive Summary............................................................................................................. 1 Apple Inc. Strategy Facts: Scope, Generic Competitive Strategy, and Value Creation ...... 2

Strategic Analysis 1. Industry Forces and Attractiveness................................................................................ 3 2. Competitive Landscape and Strategic Groups ............................................................... 6 3. Key Resources and Capabilities ...................................................................................... 8 4. Apple Inc. Value Chain and Strategy Implementation ................................................. 10 5. Trends and Opportunities 5.1. General Environment Analysis ............................................................................ 14 5.2. Diversification ..................................................................................................... 17 5.3. New Value Creation Opportunities ..................................................................... 19 6. Recommendations and Conclusion ............................................................................. 21

Appendices A1: Porter’s 5 Forces Analysis .......................................................................................... A-1 A2: Strategic Group Maps ............................................................................................. A-2.1 A3: Key Resources & Capabilities..................................................................................... A-3 A4: Value Chain Analysis ............................................................................................... A-4.1 A5: General Environment Analysis .................................................................................. A-5

Resources Works Cited ..................................................................................................................... R-1

Strategic Analysis – Apple Inc.

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MGT 440, December 2009

Masi

OVERVIEW Executive Summary Apple Inc. (Apple) has managed to create substantial value in the highly competitive personal computer industry, by innovating and forging a path considerably different from those of the largest competitors in the industry, successfully differentiating its products from those of the competition by choosing to focus on quality, design elegance, and superior customer service, while outsourcing actual manufacturing to trusted original equipment manufacturers. Yet, despite the advantages Apple has created for itself, the stiff competition within the industry and other external factors present formidable challenges to the firm. The personal computer/notebook market is becoming increasingly commoditized, leading to intense rivalry among competitors within the industry, driving prices down and creating potentially destructive price wars. Utilizing key resources and capabilities including industry-leading design teams, talented software and hardware engineers, backed by a sizeable research and development budget, which is responsible for a portfolio of thousands of patents, and under the strategically brilliant stewardship of CEO Steve Jobs, Apple has successfully innovated its way to a comfortable market position commanding premium prices. Unfortunately, Apple cannot rest on its laurels. The position is not permanent and Apple must continually find new ways to maintain profits and create value for customers and shareholders. The maturing personal computer market is becoming saturated, leaving fewer new buyers and more replacement buyers. To continue to grow, Apple must also look to new and expanding markets as sources of revenue. After considering...
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