APPLE COMPUTER INC.: - CORPORATE-LEVEL STRATEGY REVIEW - A review on the strategy adopted by Apple Inc. at corporate level to ensure that the company remains at the forefront of the electronic media industry either in terms of innovation and range of products
An analysis was done on Corporate-Level Strategies adopted by Apple Computer Inc. (“Apple Computer”) that has brought tremendous success to the firm since it started. Apple Computer started off in 1976 by Steve Jobs and Stephen Wozniak producing the original Apple computer to hobbyist. This single product line later diversified to multi products to what Apple is known today i.e. iPhone, iPod, iPad, iTunes, iMac, iBook and Mac Computer. This report analyzes the corporate level strategy adopted by Apple Computer and proposes the alternative/enhanced corporate level strategy options to optimize the already excellent performance further.
EXTERNAL ENVIRONMENT ANALYSIS – PORTER’S 5 FORCES
An analysis of the external environment of the Apple Computer business was done using the Porter’s 5 Forces Analysis. The result is shown in the table below: - FORCES
Rivalry Among Competing Firm
| Rivalry is HIGH due to numerous competitors e.g. in PC (HP, Dell, Acer), in smartphone (RIM, Samsung, Nokia), in on-line music (Napster)
| Threat of New Entrant
| Threat is LOW to MODERATE due to high barriers to entry e.g. high capital requirement and high R&D capabilities requirement
| Threat of Substitute Products
| Threat is HIGH due to high availability of similar function products e.g. Napster & RealNetworks for iTunes, Blackberry & Samsung for iPhone, Dell & HP for iMac
| Bargaining Power of Supplier
| Bargaining power is LOW due to many alternative suppliers except for CPU where there are only 2 suppliers (Intel & AMD) but due to contractual leverage the bargaining power of these 2 suppliers are also limited
| Bargaining Power of Customer
| Bargaining power is HIGH due to possible switch to another products that are undifferentiated e.g. a customer not satisfied with iBook could easily opt for a Dell laptop of similar specifications
Based on the table above , Apple external environment is difficult as the competition is fierce, many substitute products and switching cost (bargaining power of customers) is low. Thus Apple needs to leverage on its strength and competitiveness to maintain its leadership in the AV media and PC, if Apple decides to continue in these lines of business.
INTERNAL ENVIRONMENT ANALYSIS – SWOT ANALYSIS
| * Innovation; first to enter the market * Product & Market Development * Competent and visionary leader – Steve Job
| * Customer and Product Services * Products are considered niche may put off some potential customers
| * Strategic Alliances with leading communication firms * Pioneering the cloud computing community
| * Forward integration * Becoming a low- end commodity when the innovative product become just another run-of-the mill product
| Based on the table above, Apple Computer needs to improve on its weaknesses i.e. on satisfying customer in term of services and at the same time paying extra attention to some portion of the masses that consider Apple Computer as obnoxious because of the perception of exclusivity niche expensive. Apple Computer also needs to be wary of potential threats of forward integration from the suppliers and its products lose it winning edge – the innovative product becoming just run-of-the mill products.
VALUE CHAIN ANALYSIS
The value chain analysis can represented as per table below: -: PRIMARY ACTIVITIES
| Research & development leading to product and process innovations, timeliness of technology developments, encourage creativity
| Product design, productivity of equipment, effective quality control...
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