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Apple Computer Strategy Case Study

Apple historically enjoyed competitive advantages as an innovator in personal computers and from its integrated value chain. However, increased competition eroded margins in the PC industry. Apple's strategies oscillated between differentiation and cost reduction. A SWOT analysis revealed strengths in branding but weaknesses in operations. Opportunities existed in digital platforms that a sustainable advantage was later achieved by combining the iPod and iTunes into an ecosystem locking in users.

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Arnaud Poutre
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21 views7 pages

Apple Computer Strategy Case Study

Apple historically enjoyed competitive advantages as an innovator in personal computers and from its integrated value chain. However, increased competition eroded margins in the PC industry. Apple's strategies oscillated between differentiation and cost reduction. A SWOT analysis revealed strengths in branding but weaknesses in operations. Opportunities existed in digital platforms that a sustainable advantage was later achieved by combining the iPod and iTunes into an ecosystem locking in users.

Uploaded by

Arnaud Poutre
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

STRATEGY CASE STUDY

Apple Computer
Benjamin Royon Master in Management Strategy - Professor Davide SOLA

COMPETITIVE ADVANTAGES SOURCES


A disruptive and innovative company Innovator of personal computer First mover (experience curve, scale effect, size

a different value proposition A complete solution with bundled software plug and play :

With integrated value chain Proprietary designs, non replicable, can manage

An sucessful differentiation strategy Strong brand equity resulted in high customers willingness to pay and stickiness

INDUSTRY TRENDS
TOP 3 PLAYERS MARGIN LEVEL

From a early-stage market to a commodity one Segmented markets with different criteria (customer service) Easy to implement imitation lead to cheap pc clones Wintel leading the way

40% 35% 30% 25% 20%

15%
10% 5% 0% 1997 2000 Apple 2003 Dell 2004 HP 2005

PC INDUSTRY ATTRACTIVENESS
PORTER 5 FORCES ANALYSIS
Buyers

Suppliers

LOW

HIGH rivalry

Substitut es

HIGH

LOW

Entry threats

APPLES STRATEGIES
Sculley/Spindler years: into the mainstream Average prices Focus on innovation and internationalization (resulting in loss of competitive advantage) Focus on cost structure
Amelio/Jobs: back to differentiation Premium prices Not only a PC firm but a diversified organization Focus on cost structure (from 15 to 3 products, selectivity of distributors, 2 days of inventory)

APPLES DIAGNOSIS
SWOT ANALYSIS STRENGHTS
Successful differentiation Brand loyalty Global presence

WEAKNESSES
Cost structure (more R&D, less efficient operations than competitors) Dependency on suppliers

OPPORTUNITIES
Digital platforms (music, video, books, games, applications)

THREATS
Intense and smart competition
High dependency on leadership Closed world U-turn

SUSTAINABLE ADVANTAGE
With the iPod combined to iTunes : a sustainable advantage was created. An echosystem or platform (include third party players) lock the users ( razor/blade business model)

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