March 12, 2012
Case I Apple Inc.: Taking a Bite Out of the Competition
I. Case Profile
Apple Inc. is concerned that without their CEO Steve Jobs, Apple will not be as innovative then they are with him. Steve Jobs was one of the founders of Apple in 1976. Jobs set the mission of empowering individuals, one person-one computer, which he wanted to with great detail. In 1977 the first version of the Apple II was the first computer available for use by ordinary people. By 1980 Apple was the industry leader and went public in December. Most innovations occurred after 1998, when Apple was under Steve Jobs leadership. During this period the company’s strategy was “its unique ability to design and develop its own operations system, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use seamless integration and innovative industrial design.” This strategy required product design, marketing expertise, and great attention to operational details. When it was announced that Job’s had health problems and he would now only be involved in major strategic decisions Apple shares dropped 7.56 percent. In 2004 Apple was at the top of Business Week’s Most Innovative Companies. They were different than other companies because the excelled in innovation, revenues, and margins. Since then Apple has released its first major non computer product the iPod, which is an MP3 music player. When then they introduced iTunes where people could buy songs, games, movies to download on their iPod. They also introduced the iPhone which is a wireless phone, music and video player, and a mobile internet browsing device. II. Situational Analysis
General external environment
Political/Legal – The debate over ‘Net Neutrality’ has entered the political arena, with bills being drafted in Congress and the FCC waiting in the wings to impose regulation if need be. Changing the way the Internet operates may de-incentivize new innovation which could reduce future value to be derived by Apple. New and innovative technologies are routinely iterated on by hardware companies who strive to offer the best methods of integration in their new products. Reducing this innovation may stifle new value creation for Apple.
| Sociocultural – There is an increase demand for on-the-go devices such as cell phones and tablets. There has been more concern rising about the environment, which will make Apple need to find greener ways to run their company.
| Demographic – Draws a customer base of higher income than the mainstream computer market. Also highly innovative people are drawn to this market.
| Economic – Since the economy has been in a recession it would seem that people would not have money to spend in this market, but it has not affected this market. People are still spending money in this market segment.
| Technological – Advances in portable and personal computers, which has increased a demand for portable devices. Also there is a need to shorten the product life cycle in this market.
| Global – Regulation issues in China. Expanding its presence internationally. Potential worldwide climate regulation. To regulate emissions.
* Strong R&D * Strong Brand Name * Easy Portability * Good Reputation * Environmental Friendly * Innovative
| * Products are Expensive * Some Products Lack Customization * Electronic Device is Distracting
| * International Expansion * Expansion to Doctor Offices * Learning Tool * New Apps
| * Currency Volatility * Cost of Production * Big Rival is Microsoft * Lower Prices * Economic Slowdown
III. Industry Analysis
Competitive Rivalry: There is existing rivalry in Apple’s industry. Some of their rivals are Dell, HP, Samsung, and Toshiba.
New Entrants: There is some threat of new entrants in Apple’s industry, which means there may always be new...
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