Apple Computer, Inc. is a well-known designer and retailer of computer hardware, software and electronic entertainment devices. Apple began as a small personal computer manufacturing firm in 1976 with a vision to build computers that could be purchased by anyone. The company has now grown into one of the most powerful technology companies in existence. The path that led to the creation of a brand like Apple is a true testament to the level of innovation and the cultivation of customer focused business strategies that have led to devices and software such as the iPhone and iTunes. By analyzing the challenges Apples faces while putting its strategies into action the information that is gathered could be used to facilitate better strategic management planning for other business scenarios in the same or similar industries. Apple is a world-wide competitor in the electronic device and digital content delivery industry. This dual role creates a broad environment involving a multitude of suppliers, millions of potential buyers and intense rivalries among competitors. An important element that Apple capitalizes on is the demographics it serves in the competitive environment. Creative marketing and innovative, straight forward interfaces for its products allows Apple to position its software and hardware as the “everybody” product. Differentiation is a major part of the competitive environment Apple operates in so well-known competitors like Motorola’s Android operating system and compatible device line up, recently acquired by Google, Inc.; also strive to appeal to everyone. Technologically, Apple sets the standards that competitors struggle to match through what it offers consumers in the way of access to equipment of various types, multiple forms of digital media for download and accessories for us with Apple products. The pace of innovation coming from Apple reflects a strategy heavily devoted to the knowledge capital Apple possesses. Starting in 1976 when the Apple 1 was first introduced there was never more than four years between new products introduced by the company. A clear weakness Apple faces in its environment is failure to protect its intellectual property from being used in ways that could harm the company. Real threats exist for Apple from counterfeiters in addition to its legitimate competitors, especially if the prices set by competitors and counterfeiters are enough to attract customers away from Apple. Apple’s strategy has enabled the company to grow over 18,000% since becoming a publically traded company and serves as a great example for what strategic competitiveness means. (Apple Inc. (AAPL), NASDAQ, 2012) By outsourcing the manufacturing of Apple devices and partnering with top tier business entities like Verizon Wireless and AT&T, Apple is injecting its Brand into the market while minimizing costs. The software that ties all of the users Apple products together, iTunes, creates a large amount of value for users by providing them easy access to the content they want at home or while traveling. A key challenge Apple will face in the future is when its products begin to compete with competitors that are also content suppliers, litigation between Apple and Microsoft are good examples. (Hitt, Ireland, & Hoskisson. 2011) Apple has acquired lots of industry experience thanks to its long tenure and strategic agreements are a regular part of the business strategy Apple uses to remain competitive even though those goals might conflict with the goals of a business partner. Apple could be considered an early participant in global expansion by companies competing in the technology industry; their first international offices were opened in France and England in 1981. Today a growing global presence is a necessity if a business wishes to grow beyond what the domestic market is capable of providing in revenue. Comparing the U.S. market to how Apple products have performed in the Chines market shows how Apple would need to incorporate a good understanding of the subtle differences between cultures. Apple has enjoyed steady market growth for its products in the United Sates despite the somewhat high price for some Apple products. Consumers with more disposable income in both countries will invest in the device of their choice, but U.S. customers may be willing to pay a premium for the brand where Chinese customers would seek a less expensive alternative. Legally the industry that Apple operates within contains many rivalries surrounding different types of intellectual property. The legal obligations Apple must fulfill to execute any elements of its business strategy range from human resource management to obeying anti-trust laws governing business operations in the United States. Apple is also accountable for adhering to the laws established in foreign countries where it operates. As a leader in the technology industry, Apple does enjoy a measure of recognition when contributing to political discussions affecting the technology industry. To gain a better perspective of how intellectual property disputes could seem to entangle the entire industry at times, John P. Mello of PC World created the, “Tech Industry Is Lousy with Lawsuits” Infographic . Economically, Apple is performing solidly and at quarter ending 2011 enjoyed a 24% return on net sales of its products. How Apple reached those objectives has a lot to do with how extensively the Apple brand travels. In the case of China, “$7.9 billion in the first quarter…Sales are on track to nearly double in 2012 from last year's $13.3 billion.” More than 60% of that first quarter revenue was generated outside the United States. (Yee, L. 2012) External factors can influence the internal strategies a company like Apple may decide execute. Economic recession would have a definite and quick impact on the health of the technology industry; the results of an anti-trust lawsuit would affect the entire industry in some way as would the reduction of competitors in a market as a result of bankruptcy. In the past Apple has made mistakes that played a real part in endangering the continued growth of the organization. At one point, Microsoft benefited from Apple's poor negotiation of a contract that cleared the way for successive versions of the Windows operating system using graphical user interface technology...Apple had effectively lost exclusive rights to its interface design." (Hitt, Ireland, & Hoskisson, 2011) There is also the need to be present of what non-traditional competitors are doing, especially Google Apple’s main competitor. New developments concerning one of Apple’s main competitors were discussed online at www.PCmag.com highlighting how Google has grown to be one of Apple’s largest competitors but has never built one personal computer, “The evidence shows that Motorola Mobility has had a long and aggressive history of seeking to capitalize on its intellectual property and has been engaged in extended disputes with Apple, Microsoft and others," the DOJ found. "As Google's acquisition of Motorola Mobility is unlikely to materially alter that policy, the division concluded that transferring ownership of the patents would not substantially alter current market dynamics.” (Albanesius, 2012) It is highly likely that non-traditional competitors like Google and Amazon will continue to diversify their products and services through acquisitions making them stronger competitors for Apple to contend with. Apple retains the benefit of having established its software platform, licensing and content delivery devices ahead of its current and future competitors. Brand recognition helps Apple stay ahead of its competitors and marketing is enhanced through strategic affiliations that endear Apple to consumers of its products and services. Instead of creating and following a business strategy that might generate legal problems, Apple help pioneer quick, reasonably priced digital content downloads to hundreds of millions of potential customers. A commitment to total quality management has allowed Apple to create a well-respected and highly demanded product in the form of Macintosh desktop and laptop computers, the iPod music and video player, the iPad computer tablet and the iPhone. The Apple strategy is successful and its effectiveness is measured in the level of attempted reproduction of Apple tactics in the technology industry.
Albanesius, C. (13 February 2012.) DOJ Approves Google's Acquisition of Motorola Mobility. Retrieved from http://www.pcmag.com/article2/0,2817,2400226,00.asp
Apple Inc. (AAPL)-NasdaqGS. (2012). Key Statistics. Retrieved from http://finance.yahoo.com/q/ks?s=AAPL+Key+StatisticsHitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2011). Strategic management: Competitiveness and globalization, concepts and cases: 2011 custom edition (9th Ed.). Mason, OH: South-Western Cengage Learning.
Lee Chyen Yee, L. (27 April, 2012). Apple sales rocket in China, but growth may slow. Retrieved from http://finance.yahoo.com/news/apple-sales-rocket-china-growth-045258723.html
Mellow, John. (12 October, 2010). Tech Industry Is Lousy With Lawsuits: Infographic. Retrieved from http://www.pcworld.com/article/207606/tech_industry_is_lousy_with_lawsuits_infographic.html