Case Study on Apple’s Business Strategies. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. This is why we see “Designed by Apple in California. Co-founded by Steve Jobs in 1976, the company was named under Apple Computers Inc. and its initial product Apple IIe gained relative popularity and success. Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer. Strategic position of Apple Inc .................................................................................................................. 2 Justify your opinion. Since Jobs took over as CEO in 1997, Apple seems to have resolved the innovation dilemmas, evidenced by their numerous innovations. Differentiation………………………………………………………………………………………………. There is economic value in strategic alliances. One of the major concerns of Apple is that if it tries to get an alternative to production in China, it will increase the cost of production, resulting in an increase in prices of Apple products. This site uses Akismet to reduce spam. Business-Level and Corporate-Level Strategies  This Five Forces analysis, based on Porter’s framework, points to the following strengths or intensities of external factors in Apple Inc.’s industry environment: 1. In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. For example, Apple and Foxconn case, when the US factories produce the same products as Foxconn, the output of the US factories is only 80 percent of Foxconn and product defective rate is more than twice than Foxconn although Apple invest manpower into US factories. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. The company designs and manufactures various products in the computer and music industry. In our case the competitive advantages of Apple is differentiation and innovation, high quality, great customer responsiveness, high level of marketing and having strong sales department. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. A U-Form organization resolves the inter-functional collaboration dilemma if there are product development and product management teams. Apple was founded by Steve Jobs and Stephen Wozniak in 1976;  Apple Computers  revolutionized the personal computer industry. Case Study: Apple, Inc. ... following of loyal customers. Apple is buying those inputs in a large volume and it allows Apple to negotiate good terms and pricing with its suppliers. Apple had one of its critical points in history in 1999 when it introduced the iBook. According to the Apple case, Apple has using differentiation strategy create different and new product over it Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. The release of the Macintosh revolutionized, value of Apple’s products and they are willing to pay a higher price to obtain it. Apple is headquartered in Cupertino, California and was founded by Steve Jobs. 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Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining cooperation from “The Big 5” Music companies–BMG, EMI, Sony Entertainment, Universal, Warner. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. Apple and Samsung have achieved high levels of business success over the years. A strategic alliance can be a sustained competitive advantage if it is rare, difficult to imitate, and the company has an organization to exploit it. A company attempts to make its strategy a sustained competitive advantage. “When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits.” (“Apple - Five Forces Analysis,” n.d.) As a result, Apple get discount for bulk purchasing from the suppliers which in turn, lower down the, Apple Inc was incorporated in 1977 by Steve Wozniak and Steve Jobs. 1. The institutional leader creates the organizational infrastructure necessary for innovation. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. The company achieves the unrivaled differentiation of surviving from the beginning of the industry and is still operating prosperously. “If we had licensed earlier, we would be the Microsoft of today.” – Ian W. Diery, Apple Executive VP, I am aware that I am known as the Great Satan on licensing…I was never for or against licensing. The business was worth $400 million. We can describe Apple’s strategy in terms of product differentiation [Pt 1] and strategic alliances [Pt 2]. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. The mentor coaches, counsels, and advises. There are some substitutes for an equity alliance, such as internal development and acquisitions. The products made by the company offer something different. Apple had issues within its organization. Business-Level and Corporate-Level Strategies  Apple customers are a devoted group that understand the superiority that they possess but convincing the other 95% of the world because a rather large task. However, within these similarities, both companies have different corporate cultures, which differentiate the companies’ ideals. In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. Required fields are marked *. Tacit collusion is a valid source of economic value in network industries, which the computer industry is. What we should have done was calculate an appropriate price to license the operating system. Porter’s three Generic Competitive Strategies…………………………………………………………. Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. EXAMPLE OF COMPETITIVE MARKETING STRATEGIES Case Study of MI Smartphone Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. The company’s worldwide market share, which was between 7% and 9% had now dropped to 4% and sales were decreasing. The primary economic value of product differentiation comes from reducing environmental threats. This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. By recruiting Steve Jobs Apple did its first steps. Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. According to Gustin, (2011), the differentiation strategy is an integrated set of actions taken to produce goods or services at an acceptable cost that customers perceive as being different in ways that are important to them. Introduction…………………………………………………………………………………………………. However, both companies have pursued different strategies to achieve their success. Apple’s Premium Pricing Strategy, Product Differentiation ... Steve Jobs, whose strategy for Apple had four pillars: Offer a small number of products. Apple, Inc. was founded in 1976 by Steve Jobs and Steve Wozniak. It began its operations from its simple marketing strategy of offering technologically advanced, user-friendly personal computers. A business strategy, in most cases, doesn't follow a linear path, and execution will help shape it along the way. If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers. Summary of Apple Case Study Analysis 1.0 Introduction 1.1 Introduction of Apple: Apple Inc. is the most famous name in the technology sector, it is an innovative electronics manufacturer, which is giving benefits to the consumers and to the suppliers, and the company is using successful strategies in the market so the best results could be achieved. Focus on the high end. The entrepreneur manages the innovative unit(s). It brought about different changes to the industry; these changes are still visible in the present. (Porter’s generic strategies with particular reference to Apple Inc) A non-equity alliance should have explicit contracts and legal sanctions. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. Music distributor have to make specific investments to broadcast music on … From its MacIntosh home computers to the iPod music players and iPhone and iPad mobile devices, Apple has employed a differentiation strategy to target a section of the consumer market and send a powerful message that its products stand out from the crowd. It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. It released a highly stable operating system in 1999, and updates following 1999. Apple turned the corner in 1993. Supply chain management is inadequate. In the case of Apple, there was the opportunity to manage risk and share costs  facilitate tacit collusion , and manage uncertainty. Apple Inc. in 1997 vs. Apple Inc. in 2013 were in two completely different scenarios. It often doesn’t.” – Steve Wozniak, Apple cofounder. Product Differentiation Apple prides itself on its innovation. Think different in the world of technology and bring greater revenue. For instance, Apple In 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. Compare And Contrast The Trait Approach To Leadership. Case Study on Apple’s Business Strategies, Role of Leadership and Culture in Promoting Innovation and Creativity, Case Study of Apple: Strategic Enablers and Barriers to Innovation, Case Study: The Business Strategy of Apple, Case Study of Steve Jobs: The Ultimate Intrapreneur and Entrepreneur, Case Study: A Phenomenon Called Steve Jobs, Case Study of Apple Inc: An Apple for Your Enterprise. In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. When reviewing the history of Apple, it is evident that this attitude permeated the … There is economic value in product differentiation, especially in the case of monopolistic competition. Case Study on Apple’s Business Strategies We can describe Apple’s strategy in terms of product differentiation and strategic alliances. Table of contents That was a mistake. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. We were also naïve to think that the best technology would prevail. Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995. But my approach was stupid. For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. This generic strate… These forces can limit or reduce the firm’s market share, revenues, profitability, and business development potential. Afterwards several strategic alliances were formed: * The first strategic alliances … Apple engages in “industry-wide differentiation” of Porter’s competitive strategies by differentiating themselves from their competitors by providing better services and products to their customers. Analysis of Apple Inc. business Strategic Unit (iPad unit) Philip W. Schiller, VP of Worldwide Product Marketing for Apple, stated, “iPod is going to change the way people listen to music.” He was right. The case is about the US-based technology giant Apple Inc.’s (Apple) journey in China. However, Spindler nixed Gateway in 1995 due to cannibalization fears. However, the difficulties with these drive the formation of strategic alliances. What Should You Include in a Companies Operating Agreement? Competitive rivalry or competition: Strong force 2. The company’s strategy was. Read about "Apple differentiation strategy" Initially under Steve Jobs Apple’s long-term strategy was “to bring an easy to use computer to the market” (Yoffie & Slind, 2008). Through thebroad differentiation genericstrategy, Applestands out in the market. Introduction .................................................................................................................................................. 2 The case study cites the underlying competitive rivalry within the market as the primary challenge that Apple faces currently as Cook and the other vital managers devise new strategies to counter such competition. Apple Computers Inc is considered to be one of the innovators in the computer industry. This allowed iTunes Music Store online to offer over 200,000 songs at introduction. Apple Computers Inc is considered to be one of the innovators in the computer industry. APPLE CASE STUDY SAMSUNG CASE STUDY COMPARATIVE CASE STUDY ASSESSMENT TASK APPLE OPERATIONS STRATEGIES & COMPETITIVE ADVANTAGE . Apple was on track to lose $378 million on revenues of $7billion on top of a $740 million loss in 1996. They have done a good … The Causes of the Problem Two critical issues stand out in the case of Apple and have a direct relationship with the underlying problem. 4.0 Strategy Implementation. Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. This paper compares the business strategies of both companies and reveals that their production, human resource and marketing strategies are inherently similar. Bargaining power of buyers or customers: Strong force 3. This case study is to begin with a situational analysis that will encompass the industry structure, competitive situational analysis and the firm's self-analysis. An equity alliance should have contracts describing the equity investment. Apple’s strategies are partly based on the need to address forces in the external business environment. In 1997 Apple Computer was in deep trouble. Creativeness and utilities are connectedly associated with one name “Apple INC. ” which symbolize an enchant accumulation of engineering genius, dedication, innovation and prosperity in spite of incompetent behavior. On June 25, 1985, Bill Gates sent a memo to John Sculley (then-CEO of Apple) and Jean-Louis Gassee (then-Products President). Nowadays many companies have used the various marketing strategies in order to help them develop the effective marketing decisions to achieve their goals and objective. This paper proposes that Samsung should re-evalua… Despite high … To continue a product differentiation strategy, Apple must continue its appropriate management of innovation dilemmas and maintain the five leadership roles that facilitate the innovation process. Which of Porter’s Four Competitive Strategies Does Apple engage in? Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business. Apple Corporation: Case Study on Pricing Strategies Apple is an American multinational company best known for developing and selling electronic devices and software worldwide. Cost Leadership…………………………………………………………………………………………… As a startup company Apple Inc went through several management changes and conflicts which caused the company to lose some of its competitive advantage against companies like Dell, Gateway and Microsoft. Through product differentiation apple was able to achieve success and become one of the leading organizations in the world’s market. By iPad Apple choose differentiation strategy and iPad don’t cannibalize other apple devices like MacBook Air. Jobs despised licensing, calling cloners “leeches”. Apple has a history of shunning strategic alliances. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. It also serves as a meter of how products are designed. Although Apple eventually realized the economic value of strategic alliances, it should have occurred earlier. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. Your email address will not be published. The sponsor procures, advocates, and champions. He pulled the plug, essentially killing its largest licensee (Power Computing). A massive reversal occurred in 1997 and 1998. The Story of an iPhone Video. We were just fat cats living off a business that had no competition.” –   Jean-Louis Gassee, Be CEO and ex-CEO of Apple, admitting he made a strategic mistake. The objective of this paper is to examine the business level and corporate level strategies for Edgar Company Apple Inc. Bargaining powe… Contents This mini case study sheds light on the role that design thinking and innovation played in helping Steve Jobs rescue Apple with his consumer-driven strategy and vision for the company. Why Businesses Need an Efficient Management Information System? 1.1 Competitive strategic position ............................................................................ Differentiation Strategy: Case Analysis Of Apple, Inc. There are four primary organizing dilemmas when considering product differentiation as a strategy. AppleInc.’s generic strategyis broad differentiation. For this to occur, a product differentiation strategy that is economically valuable must also be rare, difficult to imitate, and the company must have the organization to exploit this. It doesn’t think outside the box in terms of strategic imperatives, like building differentiation, growing margins or defensibility. If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. Case Study 4 – The Apple of Your i 1. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. The first strategy that use by Apple Inc for their current expansion strategy is creating innovative idea that slightly different from the competitors that already exists in market and industry. Then Apple introduced the iPod, central to the “digital lifestyle” strategy. They are as depicted below. Apple Inc. founded a brand new method in which microchip technology was to be created and used for industrial, Planning Process of Apple Inc. to achieve its Objectives Set Not only does a company have to bear the cost of standard business, it also must bear the costs associated with overcoming the differentiation inherent in the incumbent. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Apple, Inc. is one of the most successful companies in the world. If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate. Apple has focused on broad differentiation strategy that involves … That explains why the top three mobile handset unit sales ‘leaders’ (Nokia, Samsung, LG) are outselling Apple in raw units an astounding 23.5 to 1, yet for all of that effort, combined they are garnering only 82 percent of Apple’s profit level. A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. Combining the old with the new resolves the connection to the past dilemma. The explosive, Introduction Of Apple Inc. Apple Inc. is globally renowned as one of the leading companies, especially for its specialization in the personal computers and consumer electronics industry. Syllabus contents: - supply ... View the below resources to see what logistics and global sourcing strategies Apple uses. In order to make the company more innovative, Steve Jobs focused innovation on competitive pressure and value proposition by stressing his management style on customer center innovation and customer experience. 4. “If Apple had licensed the Mac OS when it first came out, Window   wouldn’t exist today.” – Jon van Bronkhorst, “The computer was never the problem. Apple officially opened its first store in China in 2008, though prior to that Apple products were sold at premium prices in the Chinese grey market. Like the cost focus strategy, the differentiation focus strategy targets a very specific part of a market, but rather than offering at affordable prices to the customer in the market, an organization offers unique products that competitors do not offer. The company has been providing robust technology products and exceptional software services. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. Apple launched its first product ‘Apple 1 … Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. Focus or Niche strategy…………………………………………………………………………………... Apple Inc., led by Steve Jobs virtually rewrote the book of strategy as well as the history of consumer electronics, with its pioneering "i products": the iPod and iphone . It covers all the strategic issues facing the industry and Apple inc. as well as the recommended solutions for these issues on business and corporate levels. The company’s products have always been designed to be ahead of the curve compared to its peers. This case study covers the history of Apple and their strategic approaches implemented by the CEO’s over the years to make it one of the most successful and sustained company in the world. The Apple Case Study Student’s Name Institution Affiliation The Apple Case Study Question 4-7. 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