Is Apples Strategy Strong Enough?

Q4. Is Apple’s strategy in its computer business strong enough to compete successfully against Dell and HP?

From Exhibit 3 we can see that in 2008 Apple upholds 8.5 % of the U.S. PC Market. Today’s generation are now more techno aware and therefore their expectations are higher than what they used to be. Apples rivals such as Dell and Hewlett-Packard possess a large size of the market at 31.9% and 25.3% respectively.

From analysing the case study it is evident that a vast majority of consumers prefer Dell and HP’s computers to that of Apple’s. Dell offers a variety of computers offering a variety of prices all depending on the type of computer you choose to buy. They offer different packages for the individual consumer. Consumers expect the highest quality at a reasonable price. They offer a diverse mix of products from “low end models to state of the art computers”. The difficulties that Apple is facing as a company is that their designs may be too complicated for some consumers, making them change preferences. Apple has created a select amount of computers and these are targeted towards the more business niche of customers “Mac Pro – aimed at professional and business users”. Apples prices are more prestige in comparison to HP and Dell.

Apples strategy is to continue to create and improve innovation, to be one step ahead of their rivals. Their aim is to create something that no one else has the capability to copy or imitate. Even though there computers attract a certain genre of consumers. Apple are relying on the fact that through the creation of their new technology products such as the “iPod, iTunes, and the iPad” that customers will turn to their computer products with the thought the other apple products are as reliable. “Many analysts still projected that Apple’s greatest opportunity for growth would come from the projected halo effect of iPods and iPhones. Apple has created a huge following with the brand name, however with Apples broad differentiation strategy they may be spreading themselves to thinly.

To help us come to a decision we did a SWOT analysis on Apple Inc to give us an indication whether or not they are strong enough to compete in the computer business.

Strengths • High quality products. • Large consumer base loyal to Apple. • Product diversification (iMac, Mac Book, iPod, iTunes etc.).

Weaknesses • High prices in comparison to Dell and HP. • Difficulties in correcting products defaults. • Minimal focus on marketing and advertising of computers.

Opportunities • To expand shop locations to sell the products. • Product line is current and attractive. • Create new products.

Threats • Forced to develop new products to keep ahead of competitors. • Technology changing at a rapid pace.

From using the Swot analysis it is very clear that Apples current computer strategy is not where it should be. The company need to alter its computer strategy to attract a larger volume of customers. Apple cannot rely on the good “word of mouth” that will be passed on through the use of the iPods. Apple needs to think of who they are targeting. Customer satisfaction must be their priority to succeed in the competitive market in the computer industry. Apple’s rivals Dell and HP have a number of stores in the U.S. and internationally. This is something that Apple would need to consider looking into. The accessibility of their products is hard to come by.

• Expansion of stores locations would be a great investment (easier customer access) • Reduces prices of the computers but maintain the high quality( Attract more customers) • Apple needs to invest more in advertising and marketing of their new innovative products. ( Brand and product awareness) • Perhaps create a joint venture with one of their rivals in the future, combining knowledge and experience could be more profitable than waiting on your own

If Apple were to consider these factors and rectify some of these problems, there should be no reason as to why they couldn’t compete with HP and Dell.