1. What, historically, have been Apple’s competitive advantages? Apple pursues a differentiation strategy since it started in 1976. Only one time they offered a computer aiming for the mass market, but soon came back to their differentiation strategy.
This differentiation strategy was at one point supported by a strong promotion campaign, with the goal of to ‘differentiate the Macintosh amid intense competition in the PC industry. Apple has always been a very innovative PC manufacturer. Through excellent R&D, Apple always managed to launch PC innovations on the market.Although the products sometimes showed weaknesses, the innovative role still gave Apple a lot of attention.
Apple designed its products typically from scratch, using unique chips, disk drives and monitors. This created a high value image of the Apple PCs and made the customers ‘love’ their Macs. These loyal customers allowed Apple to charge premium prices for their products. 2.
Analyze the personal computer industry. Are the dynamics favorable or problematic for Apple? Technology in Pc industry became cheaper and affordable over time.Company?s growth was driven by low prices but revenue growth did not match with the volume growth. This led to a decrease in R&D.
Hence almost all PC suppliers used cost differentiations as their strategy and sell to volume. The consumers cared deeply about price, home consumers also valued design, mobility, and wireless connectivity, business consumers balanced price with service and support and at last education buyers depended on software availability. It can be said, that the dynamics were problematic for Apple because of low prices of different supplier.But on the other hand it can be seen as favorable to Apple.
The reason was Apple had control of both hardware and software. This was a unique strength which other computer industry did not possess. Furthermore, Apple revamped its product line which offered machines that could deliver a cutting-edge, tightly integrated user experience. As a result of several technological innovations and a new retail strategy, Apple became the fourth-largest PC vendor in the U.
S. market. In addition, people could use and experience Apple?s software at the Apple retail store.In any case Apple?s retail strategy was a huge success.
3) How sustainable is Apple’s competitive position in the PC’s? The repositioning of the company in 2007, from Apple Computer to Apple Inc, was a clear indication that the main focus was no longer attributed to the PC market. With this change in prioritization, one could imagine that Apple’s competitive position in regards to PC’s would be weakened, due to capital and R&D efforts being directed elsewhere. But this is not the case. In fact, Apple’s new broadened portfolio and “hub” strategy has only helped to fuel the PC sales even more.
This development boils down to several factors, including a strengthened brand image that the new products have contributed to, and the success of the “ecosystem” that the company has created around its products. Although Apple is now making its profits in many new areas, the PCs still account for a great part of the total sales. The price for a MAC is relatively high compared to the competition, and Apple is able to keep the price at that level because their PCs serve the luxury end of the market. Many design conscious consumers prefer the MAC and this niche strategy contributes to securing Apple’s position.
The company actually tried to introduce a cheaper PC version, but this was not a success. One of the main problems with Apple’s PCs continues to be the dependence on cooperation with Microsoft, as many prefer the operating systems and certainly the office programs, that Microsoft provide. In contrast, the iPod, iPhone and iPad are successful in only using Apple’s operating systems. This surely contributes to weakening their position.
If Jobs is one day able to offer the customers an operation system which can match or even supersede Microsoft’s, this would severely increase Apple’s competitiveness in the PC market.Physical keyboard With the PC’s they are able to service the professional users as well, something which the iPad can not. iPad is more and entertainment device, which appeals to private usage. 4) How sustainable is Apple’s competitive position in MP3 players? With the introduction of the iPod, Apple overran all competitors, such as Creative and Samsung, and became the clear market leaders.
In the US for example Apple now holds approx. 70% of the MP3 market share, which indicates that Apple has a very strong position in this market. Price and profit margin is also a major competitive factor in regards to the iPod.Firstly, Apple is able to sell its products at a higher price than the competition, because the customers favor the brand, design and operating ease.
Secondly, the iPod itself doesn’t cost that much to produce and Apple have even managed to lower the production costs even further, due to large purchase volumes and increased purchase power. This means that the iPods are a very profitable business for Apple. However, it looks as if the popularity of the iPod is declining and the question is whether Apple will be able to keep its leading position.The reason for the decline is of course largely due to the introduction of the iPhone, which can also serve as an MP3 player as well as having many other features.
Because of this the iPhone has actually made the MP3 business less attractive for the competitors, redirecting the industry’s attention towards smart phones, and allowing Apple to continue their lead. In the long run the demand for the iPod might disappear altogether, but until then it represents a huge cash cow for Apple. The high profit margins also leave plenty of room for price reductions, which secures Apple’s competitive position even further. .
How do you assess Apple’s competitive position in smartphones? The first generation iPhone sold approximately 6 million units; people queued through the night to be the first to get their hands on one. The iPhone changed wrote history, in terms of global smartphone sales, the iPhone had the biggest growth. The market for smartphones is due to the fast growing technology very competitive, and Apple who is powerful in both their R&D and branding have competitive advantages that makes it very difficult for other competitors to compete against them.However one of Apple’s weaknesses is that they have a closed system while their competitors are largely run on open platforms, this means that iPhones consumers can not choose the carrier that fit their individual needs.
If Apple wants to resolve this they should figure out how to give the phone capability to use multiple networks or other carriers. Apple entered the mobile devices market with an innovative product that other companies have been imitating, furthermore the iPhone keeps getting improved.In addition to that, I mean that as long as consumers crave for the latest accessories the iPhone will be in high demand until a better product is introduced. 6.
What are the prospects for the iPad? The iPad was a success, also due to Apple’s strategy of creating a huge hype around the launch of the iPad. But still the iPad has some technical problems, for example lack of multi-tasking and no support of Flash video on the internet. There also has been some controversy relating to the publishers about fixing prices for e-books and e-magazines.The market for tablet PC’s is just starting to reach the mass of PC users.
There is still a lot that needs to be figured out, in terms of technology and software, as the available software for a device creates part of its value. In addition many competitors reacted on Apple’s iPad by launching tablet PC’s themselves, thus making the competition more fierce for Apple. I think the tablet PCs haven’t really found their niche in the consumer’s life yet. I would not agree, like Steve Jobs argues that tablet PCs is becoming a substitute for netbooks soon.