Iphone Vrio Model

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Apple Inc.
Case Study # 1
iPhone

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Professor Chug-Shing Lee
BUSA 499 Capstone
October 1, 2008

Analysis Conducted By Apex

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Ryan Boykin
Ashley Fiorini
Lance Tanaka
Matt Webb

Executive Summary

Apple has demonstrated that innovation can lead to market dominance with products like the iPod. With products such as this, Apple has developed a brand that has built a customer base with astonishing loyalty. According to Business week, Apple was thirty third for top brands in the world. (Businessweek.com, 2007) Since they have developed innovative products with intuitive designs it has helped establish it as the premiere business for handheld electronics. Over the past few years Apple turned its eyes on the cellular phone market which created some issues that our team has been able to identify. Team Apex discovered that the current price did not appear appropriate for the target market. At present the current marketing for most of Apple’s products seems to be for a more youthful and technologically advance demographic. It is difficult to imagine the target market being able to afford the iPhone. This demonstrates that Apple’s target market may not be the right one for the current iPhone. Apple has had success over the past few years with mass production of electronic devices and would appear reasonable for them to exploit their brand to its full potential by developing new products. Currently Apple creates immense value for their consumers by offering products that are difficult to imitate. Unfortunately, this will not stop current and possibly new companies from copying Apple’s success by developing similar products and launching similar target methodologies. One way Apple has continued to be successful is by staying ahead of their competition and keep up on a constant stream of new products. When entering the cellular phone market Apple is facing numerous competitors and must offer a product that is unique to those counter parts. After analyzing Apple’s new product, the iPhone, it seems that there are a few courses of actions that could be taken. When addressing the issues we have identified it seems that Apple should continue with the theme of developing multiple versions of the same product. Team Apex would suggest that Apple create a cheaper version of the iPhone more suited for business professionals and would be primarily used for phone calls, e-mail and web-browsing. This phone would have less memory then the current iPhone allow them to charge a lower price. This would in turn increase the volume of iPhones being produce and allow Apple to charge lower prices for all of their phones. This case study has helped our team discovered new aspects about business that we never believe to be good courses of action. Apple has demonstrated to us that if you are not reaching the right market creating a new product specifically designed for that market. Looking at Apple’s line of iPods it seems almost ridiculous the amount and variety they have developed but when looking at it with the insight from the classes we have taken it can see that Apple has developed a digital music player for almost any type of consumer. In the long term that is what our team would like to see happen with the iPhone. We also found that using strategic analytical tools such as Porter’s Five Forces and VRIO models, can help determine key issues a company faces while determine how they can create a competitive advantage. Developing these competitive advantage has been a key to Apple’s success and they must continue to determine how to sustain in order to stay dominate in the electronics.

Table of Contents

1. Introduction………………………………………………………………………4 2. Background………………………………………………………………………4 3. Mission and Objectives…………………………………………………………..5 1. Apple Inc. Mission Statement……………………………………………….5 2. Issues and Problems………………………………………………………....5 4. Strategic...
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