Thus, Windows’ users might have to charge the laptop more often due to the battery consumption is higher than Macintosh. Moreover, Apple Inc’s dominant position in the global market has changed the trend of consumer usage of electronic appliances such as in virtual communication. Apple deals in the designing, production and marketing of software, mobile and media devices, accessories, personal computers, networking solutions, and portable music players. Why Businesses Need an Efficient Management Information System? 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. However, the difficulties with these drive the formation of strategic alliances. There are some substitutes for an equity alliance, such as internal development and acquisitions. Apple was founded by Steve Jobs and Stephen Wozniak in 1976;  Apple Computers  revolutionized the personal computer industry. The mentor coaches, counsels, and advises. In this Apple case study, the aim is to identify the internal as well as the external factors that have an impact on obtaining achieving high performances by Apple. Case Study: The Business Strategy of Apple Apple Inc is a multinational American company that design and sells computer software, consumer gadgets and personal computers. Learn how your comment data is processed. INTRODUCTION APPLE’S HISTORY & PRODUCTS STEVE JOBS ROLE SWOT ANALYSIS PORTERS FIVE FORCES - IPHONE PESTEL ANALYSIS BOSTON I PORTFOLIO SOURCES Today Apple Inc. is very well known in the world because of their advanced technology in products such as iPods, iPhone, Macbooks, Apple TV and other professional software. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. Time will tell whether that happens. The Subject of the following elaboration is the analysis of the strategy of the Apple, Inc., formerly Apple Computer. In reference to Apple’s recent advancements, Jobs said, “We are going to do for digital creation what Microsoft did for the office suite productivity.” That is indeed a bold statement. 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. In this case study, the focus will be on Apple, the world largest publicly traded company by market capitalization with current estimated value of US$530 billion and the second largest mobile phone manufacturer in the world (Booton, 2016) . THE APPLE SUPPLY CHAIN. 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. Learn how your comment data is processed. Furthermore, Apple also created a substantial value in highly competitive market and industry which help them to achieve competitive advantages in an industry with stiff competition. Required fields are marked *. If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. Apple’s business strategy controls its unique ability to design and develop its own operating systems, hardware, application software, and services. To those consumers who prefer lighter and thinner laptops will definitely be attracted to the Macbook Air. This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. This site uses Akismet to reduce spam. A non-equity alliance should have explicit contracts and legal sanctions. People will never need to carry multiple devices where each one only offers a handful of functions. The company is often criticized because a 30% cut is a significant commission for small businesses or app developers. It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. AppleInc.’s generic strategyis broad differentiation. Ionology’s 7 Principles of Digital Business Strategy is applied to the case. A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. Gates recommended that Apple license Macintosh technology to 3-5 significant manufacturers, listing companies and contacts such as AT&T, DEC, Texas Instruments, Hewlett-Packard, Xerox, and Motorola. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. Gaming plays important roles to help Apple to customize in features and specification to make the products more attractiveness and creativity. Apple Inc is a multinational American company that design and sells computer software, consumer gadgets and personal computers. SWOT Analysis of Apple. The differentiation in operating software gives Apple a competitive advantage in the personal computer industry. In terms of design, Apple came out with an ultra-thin Macbook Air which is extremely thin compared to those existing laptops. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. 500; For delivery through courier (within India): Rs. A CASE STUDY OF APPLE SUPPLY CHAIN . The company does not own and operate manufacturing or production facilities. In 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. The company offers various products for the different market it targets. It begins with the emergence and development of Apple and his initial public offering (IPO), followed by proceedings of inter-nationalization. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. 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. A U-Form organization resolves the inter-functional collaboration dilemma if there are product development and product management teams. (Linzmayer, 245-8)   After not receiving a response, Gates wrote another memo on July 29, naming three other companies and stating, “I want to help in any way I can with the licensing. Apple’s vertical integration is one of the major factors that set it apart from the competition. 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. Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer. How Innovation Contributes to Competitive Advantage? It means that Apple will be more focused on looking outwards, market and business drivers rather than at the products or services that already exist. The second strategy applied by Apple is differentiation. Combining the old with the new resolves the connection to the past dilemma. Case Study on Apple’s Business Strategies. Five leadership roles will facilitate the innovation process:   Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor. Apple's Profitable but Risky Strategy 2540 Words | 11 Pages. 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. There are four primary organizing dilemmas when considering product differentiation as a strategy. But, like any other brand, Apple also started as a small company. Apple subsequently acquired Power Computing’s customer database, Mac OS license, and key employees for $100 million of Apple stock and $10 million to cover debt and closing costs. Therefore, Apple is … As from 2013 to 2015, the company has recorded a steady rise in annual revenue. This generic strate… Even the MacBook and iPhones … The institutional leader creates the organizational infrastructure necessary for innovation. It brought about different changes to the industry; these changes are still visible in the present. In most courses studied at Harvard Business schools, students are provided with a case study. 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The entrepreneur manages the innovative unit(s). Today, in 2016, Apple’s share price is around US $108 and the company achieved revenues of US $233.7 billion in 2015 with net income of US $53.39 billion. It released a highly stable operating system in 1999, and updates following 1999. To resolve these dilemmas, there must be an appropriate organization structure. Case Study of Steve Jobs: The Ultimate Intrapreneur and Entrepreneur, Case Study on Apple's iPod: The Marketing of an Idea Project, Case Study: A Phenomenon Called Steve Jobs, Effect of Relationship Marketing on Customer Retention, Porter's Generic Strategies - Differentiation Strategy, Organizational Success through Creativity and Innovation, The Concept of Entrepreneurial Opportunities. In 2012 Cook reduced component suppliers from 100 -24, forcing Suppliers to compete. Case Study: The Business Strategy of Apple, Business Level Strategies - Cases of Wal-Mart, Apple, Zara and Ikea. It is easy to search for any application or software by using Appstore. The matrix is as follows: In 2001, Apple hit another important historical point by launching iTunes. This role also resolves disputes, particularly among the other leaders. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. Apple – A Digital Business Strategy Case Study This is a case study of how in 1997, Apple was able to change their fortunes and transform their business all by having the right strategy. Your email address will not be published. This site uses Akismet to reduce spam. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. To realize our ambitious plans we must focus all of our efforts in one direction.” This statement was in the wake of Apple divesting significant software holdings (Claris/FileMaker and Newton). A company attempts to make its strategy a sustained competitive advantage. Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. Jobs despised licensing, calling cloners “leeches”. He also focused their business and IT strategy on customer center experience. Case Study on Apple’s Business Strategies, Becoming a Successful Learning Organisation: Case Study of Apple, Five Common IT Problems Encountered by Small and Medium Enterprises, Case Study of Steve Jobs: The Ultimate Intrapreneur and Entrepreneur, Porter's Generic Strategies - Differentiation Strategy, Case Study: Apple iPod Silhouette Ad Campaign, Effect of Relationship Marketing on Customer Retention, Case Study of Apple Inc: An Apple for Your Enterprise. Apple charges a 30% cut for in-app purchases through its app-store. Investors and consumers alike see Apple as a powerhouse, which makes it easy to forget the rocky history of leadership within the company. Business Strategy. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. Apple had one of its critical points in history in 1999 when it introduced the iBook. It would have been applicable to the industries in which Apple operated. The company’s strategy was. In 1985 … APPLE’S PROFITABLE BUT ISKY STRATEGY Case Study [Type the author name] CASE STUDY ON PROFITABLE BUT RISKY STRATEGY OF APPLE INTRODUCTION: A long term plan and action that is formulated to help a company to setback and achieve a competitive advantage against its competitor and rival is called competitive strategy. Apple was founded by Steve Wozniak and Steve Jobs in 1976. This is due to the self esteem where consumers feel good by carrying Apple products because it somehow shows their status as being up-to-date and their taste is better than others. The products made by the company offer something different. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. They are as depicted below. By using iTunes, consumers can choose their preferable album cover for their songs. But my approach was stupid. On the other hand, Windows does not have such technology. “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 established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. It also serves as a meter of how products are designed. However, there are still a lot of loyal customers who prefer to spend more money on Apple products. Then Apple introduced the iPod, central to the “digital lifestyle” strategy. This allowed iTunes Music Store online to offer over 200,000 songs at introduction. Since Jobs took over as CEO in 1997, Apple seems to have resolved the innovation dilemmas, evidenced by their numerous innovations. For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. 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. On June 25, 1985, Bill Gates sent a memo to John Sculley (then-CEO of Apple) and Jean-Louis Gassee (then-Products President). The company has been benefiting from its vertical integration immensely. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. It often doesn’t.” – Steve Wozniak, Apple cofounder. 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. The business was worth $400 million. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. This generic strategy focuses on key features that differentiate thecompany and its information technology products from competitors. There is economic value in strategic alliances. As CEO in Apple, Steve Jobs carefully evaluated competitive pressure and opportunity in market place by continuously pursuit customer experience innovation. All the high tech products provide consumers with a better living standard in many different ways. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. 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. Price: For delivery in electronic format: Rs. Macbook users are satisfied with Macintosh performance because it is very energy saving where the processor will automatically “close” those programs which are not in use when it is in standby mode. Focused on segments worldwide and United States the macro-environmental analysis Steve Jobs focused on this strategy because the customers can help the company to understand what customers need and scarcity of the people so that he can use the feedbacks as inspiration to deeply investigate and then to create more innovative, creative and highly advanced technological product or services that can fulfill the needs of the customers. We can describe Apple’s business strategy in terms of product differentiation and strategic alliances. In the case of Apple, there was the opportunity to manage risk and share costs  facilitate tacit collusion , and manage uncertainty. Therefore, now Apple Inc is known as a strong company and the market leader in industry. This is a case study of how in 1997, Apple was able to change their fortunes and transform their business all by having the right strategy. With this trial, Apple force Bloggers to name the source of their information because the company suspected that the information had leaked from its employees. Apple led the global technology market by developing innovative products such as the Mac, the iPod, the iPhone, and the iPad which redefined their respective markets. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. Apple has a history of shunning strategic alliances. Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers. What we should have done was calculate an appropriate price to license the operating system. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. The sponsor procures, advocates, and champions. In 2013, the company annual revenue was … The only person who’s qualified to run this company was crucified 2,000 years ago.”. Your email address will not be published. A business strategy, in most cases, doesn't follow a linear path, and execution will help shape it along the way. Your email address will not be published. Under Amelio, Apple licensed to Motorola and IBM. 500 + Shipping & Handling Charges extra » Business Strategy Case Studies » Case Studies Collection » Business Strategy Short Case Studies » View Detailed Pricing Info » How To Order This Case » Business Case Studies » Area Specific Case Studies » Industry Wise Case Studies Apple products like iPods and iPhones are good examples that show the innovation of Apple Company by creating digital lifestyle. The company is successful because it efficiently … 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. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. Business Case Study: Management at Coca-Cola Next Lesson Business Case Study: Apple's Management Style Chapter 3 / Lesson 8 Transcript When organizing for strategic alliances, a firm must consider whether the alliance is non-equity or equity. Apple is a premium brand and a trillion dollar company. The primary economic value of product differentiation comes from reducing environmental threats. From the study, the conclusion is if the company wants to continue to succeed the same way then it must consider macro and micro environmental factors. Suppliers at Apple register on SID (Supplier Information Database). If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. He pulled the plug, essentially killing its largest licensee (Power Computing). If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate. Besides that, iTunes also allow consumers to transfer photos from iPhones to PCs. Managerial freedom within broad decision-making guidelines will resolve the institutional control dilemma. Apple Computers Inc is considered to be one of the innovators in the computer industry. 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. iTunes allow consumers to categorize and download songs easily. Therefore, Apple products design is always attractive and elegant compared to those existing competitors. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. Apple is an American company based View our Apple case study presentation slides Get our Brand Toolkit Our most comprehensive package includes over 100 PowerPoint slides for a brand plan presentation, brand plan on-a-page, brand strategy roadmap, business review, brand positioning presentation, creative brief, mini brief, brand concept, brand credo, and brand story We were also naïve to think that the best technology would prevail. 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. They can also “synchronize” and update the songs in their iPhone with a laptop. Specifically, an important source of Apple … As for pricing, Apple is using skimming pricing strategy where they set high selling price for their products. April 28, 2014 April 28, 2014 / obsurvival. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. Beside this, Apple also emphasizes customizability on the part of entertainment that offer computer-build for high performance such as gaming. Instead, hardware parts such as display panels are either bought from third-party manufacturers, and propriety hardware such as the processors found in the iPhones and the iPads are manufactured by outsourced companies. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995. Apple BUSINESS STRATEGY Business Strategy Objective: To develop a market demand for Apple products in developing countries to insure the longevity of the Apple brand. Required fields are marked *. How has Trading Been Affected in Asia Due to Corona, PRINCE2 Methodology in Project Management, Design for Manufacture and Assembly (DFMA), The SCP Paradigm - Structure drives Conduct which drives Performance, Apple Inc is well-known for being innovative, created a substantial value in highly competitive market, Steve Jobs focused innovation on competitive pressure and value proposition, Apple products design is always attractive and elegant, the innovation of Apple Company by creating digital lifestyle, iTunes allow consumers to categorize and download songs easily, Understanding Different Types of Supply Chain Risk, Supply Chain Integration Strategies – Vertical and Horizontal Integration, Understanding the Importance of International Business Strategy, Employee Participation and Organization Performance, Psychological Contract – Meaning and Importance, Workplace Effectiveness: Easy Tips to Bring the Team Together, Portfolio, Programme and Project Management Maturity Model (P3M3), Evolution of Logistics and Supply Chain Management (SCM), Case Study on Entrepreneurship: Mary Kay Ash, Case Study on Corporate Governance: UTI Scam, Schedule as a Data Collection Technique in Research, Role of the Change Agent In Organizational Development and Change, Case Study of McDonalds: Strategy Formulation in a Declining Business, Case Study: Causes of the Recent Decline of Tesla, Roles and Responsibilities of Human Resource Management. 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