January 29, 2012
Professor Erica Atkins
This paper describes the key strategic challenges facing Apple Computer. This paper will also describe the dimensions along which company success can be measured. We will also describe the critical external and internal environmental factors that have strategic implications for Apple’s future. This paper will further explain how Apple’s strategy stands up against industry rivalry. In closing we will provide recommendations to enhance the effectiveness of the company’s strategy or to change its strategic approach for better results.
Key Strategic Challenges facing Apple Computer
Apple Computer, INC.
We will describe the key strategic challenges facing Apple Computer. We will start with services which contribute minimally to Apple’s revenue but provide enormous influence. Content pricing power- Jobs told Mossberg that digital content can be sold when it’s priced for volume. The success of iTune’s .99 per song pricing demonstrates this but doing so also destroyed the music industry’s business model. Without album pricing, musician royalties and major labels CD revenue have dried up. Regression to the mean- As companies grow, their courage and capacity to “Think Different” abates. While this may sound like heresy relative to Apple history and strong, the uniquely demanding strength and influence of Steve Jobs is integral to Apple’s heart and soul. Now that Steve Jobs is gone, other will step up but none will come close to his legacy. Furthermore, Steve Jobs had a unique way of doing business and would be difficult for anyone to imitate. Past issues such as option backdating and disclosure failures regarding his personal health will have larger consequences in Apple’s wider world.
Security- With just 5% market share in the PC market, malware and virus writers have mostly ignored the Mac. Now with the success of Apple’s iPhone it will make them a target that