It often doesn’t.” – Steve Wozniak, Apple cofounder. 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. It began its operations from its simple marketing strategy of offering technologically advanced, user-friendly personal computers. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. 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. The following are some comments about Apple’s no-licensing policy. An equity alliance should have contracts describing the equity investment. The company has been providing robust technology products and exceptional software services. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. Bargaining power of buyers or customers: Strong force 3. 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. Strategic position of Apple Inc .................................................................................................................. 2 This generic strategy focuses on key features that differentiate thecompany and its information technology products from competitors. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995. The sponsor procures, advocates, and champions. Which of Porter’s Four Competitive Strategies Does Apple engage in? Focus or Niche strategy…………………………………………………………………………………... This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. 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. Apple Inc. and how, through its technologically advanced abilities and electronic sharpness, it has propelled and introduced the world to a … This site uses Akismet to reduce spam. The company offers various products for the different market it targets. Business-Level and Corporate-Level Strategies  Apple Computers Inc is considered to be one of the innovators in the computer industry. These forces can limit or reduce the firm’s market share, revenues, profitability, and business development potential. If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. It brought about different changes to the industry; these changes are still visible in the present. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. We can describe Apple’s strategy in terms of product differentiation [Pt 1] and strategic alliances [Pt 2]. The company achieves the unrivaled differentiation of surviving from the beginning of the industry and is still operating prosperously. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. 4.0 Strategy Implementation. However, the difficulties with these drive the formation of strategic alliances. Five leadership roles will facilitate the innovation process:   Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor. 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. Product Differentiation Apple prides itself on its innovation. Through thebroad differentiation genericstrategy, Applestands out in the market. Explain. 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. The matrix is as follows: In 2001, Apple hit another important historical point by launching iTunes. 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. He felt that up-and-coming rival Sun Microsystems would overtake Apollo Computer, which did happen. Think different in the world of technology and bring greater revenue. Apple prides itself on its innovation. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. The primary economic value of product differentiation comes from reducing environmental threats. 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. This role also resolves disputes, particularly among the other leaders. If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. The mentor coaches, counsels, and advises. 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. Jobs despised licensing, calling cloners “leeches”. Apple being strictly a personal computer company decided to venture into marketing other products like the iPod, a digital music player, and. But my approach was stupid. If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers. Apple launched its first product ‘Apple 1 … Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. 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. 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Business-Level and Corporate-Level Strategies  It released a highly stable operating system in 1999, and updates following 1999. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Apple was on track to lose $378 million on revenues of $7billion on top of a $740 million loss in 1996. 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. Why Businesses Need an Efficient Management Information System? There is economic value in product differentiation, especially in the case of monopolistic competition. Despite high … Combining the old with the new resolves the connection to the past dilemma. Afterwards several strategic alliances were formed: * The first strategic alliances … This paper compares the business strategies of both companies and reveals that their production, human resource and marketing strategies are inherently similar. 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. Bargaining powe… In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. What Should You Include in a Companies Operating Agreement? Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers. It will evaluate the business, Customer Value Model For instance, Apple Analysis of Apple Inc. business Strategic Unit (iPad unit) 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. Music distributor have to make specific investments to broadcast music on … But you’d need to recruit God to get it done.”   Michael Murphy, then-editor of California Technology Stock Letter, stated, “Apple desperately needs a great day-to-day manager, visionary, leader and politician. Apple had issues within its organization. However, within these similarities, both companies have different corporate cultures, which differentiate the companies’ ideals. Apple Computers Inc is considered to be one of the innovators in the computer industry. In the Apple case study, the fact of impact and effect on apple, which is a US-based company, of the political bonds of the US government with the Chinese government is also taken in the account. A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes. Likewise, to accomplish the objectives of “Become the leading business in the mobile market”, Apple Inc. should plan their strategies with Ansoff’s matrix which is a well known marketing strategic tool. This is why we see “Designed by Apple in California. The company designs and manufactures various products in the computer and music industry. Supportive Communication - Meaning and Attributes, Understanding Different Types of Supply Chain Risk, How to Motivate Your Team Through Mobile Messages, Supply Chain Integration Strategies - Vertical and Horizontal Integration, Apple Computers Inc is considered to be one of the innovators in the computer industry. Apple has focused on broad differentiation strategy that involves … The entrepreneur manages the innovative unit(s). By iPad Apple choose differentiation strategy and iPad don’t cannibalize other apple devices like MacBook Air. The institutional leader creates the organizational infrastructure necessary for innovation. Apple is buying those inputs in a large volume and it allows Apple to negotiate good terms and pricing with its suppliers. Differentiation………………………………………………………………………………………………. Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business. 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 . Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. EXAMPLE OF COMPETITIVE MARKETING STRATEGIES Case Study of MI Smartphone It doesn’t think outside the box in terms of strategic imperatives, like building differentiation, growing margins or defensibility. It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. He pulled the plug, essentially killing its largest licensee (Power Computing). A non-equity alliance should have explicit contracts and legal sanctions. 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. Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. 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. This allowed iTunes Music Store online to offer over 200,000 songs at introduction. This paper proposes that Samsung should re-evalua… Assembled in China” on lots Apple’s products. This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. Apple has a history of shunning strategic alliances. It also serves as a meter of how products are designed. Contents 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. 4. There are some substitutes for an equity alliance, such as internal development and acquisitions. AppleInc.’s generic strategyis broad differentiation. Apple Inc Case Study Of Apple. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. 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. 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. 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). This generic strate… 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. Case Study: Apple, Inc. ... following of loyal customers. Apple and Samsung have achieved high levels of business success over the years. Apple, Inc. was founded in 1976 by Steve Jobs and Steve Wozniak. Then Apple introduced the iPod, central to the “digital lifestyle” strategy. Cost Leadership…………………………………………………………………………………………… When reviewing the history of Apple, it is evident that this attitude permeated the … 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. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. 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. The company’s products have always been designed to be ahead of the curve compared to its peers. Apple Inc. in 1997 vs. Apple Inc. in 2013 were in two completely different scenarios. Case Study on Apple’s Business Strategies We can describe Apple’s strategy in terms of product differentiation and strategic alliances. In 1997, when Apple was seeking a CEO acceptable to Steve Jobs, Jean-Louis Gassee (then-CEO of Be, ex-Products President at Apple) commented, “Right now the job is so difficult, it would require a bisexual, blond Japanese who is 25 years old and has 15 years’ experience!”  Charles Haggerty, then-CEO of Western Digital, said, “Apple is a company that still has opportunity written all over it. Apple Inc……………………………………………………………………………………………………, Introduction If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate. There is economic value in strategic alliances. Case Study on Apple’s Business Strategies. If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. 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 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. Focus on the high end. Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. A business strategy, in most cases, doesn't follow a linear path, and execution will help shape it along the way. The company is most well-known for the iPod, a digital music player and Macintosh, a personal computer released in 1984. Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. The case is about the US-based technology giant Apple Inc.’s (Apple) journey in China. There are four primary organizing dilemmas when considering product differentiation as a strategy. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. The case starts by stating the fact that Apple computer changed to Apple Inc.! It would have been applicable to the industries in which Apple operated. Justify your opinion. However, Spindler nixed Gateway in 1995 due to cannibalization fears. 1. Time will tell whether that happens. Compare And Contrast The Trait Approach To Leadership. Apple Corporation: Case Study on Pricing Strategies Apple is an American multinational company best known for developing and selling electronic devices and software worldwide. 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. 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. 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. Strategy implementation is considered the toughest stage in the strategic management process. Apple expanded rapidly in the Chinese market through flagship stores and distribution points in China For instance, Apple pioneered the PDA market by introducing the Newton in 1993. The company’s strategy was. 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. Apple, Inc. is one of the most successful companies in the world. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. The business was worth $400 million. What we should have done was calculate an appropriate price to license the operating system. Required fields are marked *. In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. The release of the Macintosh revolutionized, value of Apple’s products and they are willing to pay a higher price to obtain it. A company attempts to make its strategy a sustained competitive advantage. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. The Story of an iPhone Video. Apple had one of its critical points in history in 1999 when it introduced the iBook. The critic challenges investments, goals, and progress. Case Study 4 – The Apple of Your i 1. When organizing for strategic alliances, a firm must consider whether the alliance is non-equity or equity. Syllabus contents: - supply ... View the below resources to see what logistics and global sourcing strategies Apple uses. Competitive rivalry or competition: Strong force 2. Apple was founded by Steve Jobs and Stephen Wozniak in 1976;  Apple Computers  revolutionized the personal computer industry. Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. Apple attempts to increase market demand for its products through differentiation, which entails making its products unique and attractive to consumers. I just did not see how it would make sense. 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 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 Causes of the Problem Two critical issues stand out in the case of Apple and have a direct relationship with the underlying problem. APPLE CASE STUDY SAMSUNG CASE STUDY COMPARATIVE CASE STUDY ASSESSMENT TASK APPLE OPERATIONS STRATEGIES & COMPETITIVE ADVANTAGE . (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. Introduction…………………………………………………………………………………………………. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. But Apple’s product differentiation came at a price, and were more expensive than commodity Windows-based machines, ... Apple’s channel strategy discipline is just one of the ways in which the company has become a juggernaut. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. 1.1 Competitive strategic position ............................................................................ Differentiation Strategy: Case Analysis Of Apple, Inc. However, both companies have pursued different strategies to achieve their success. Part 1: Product Differentiation. They are as depicted below. The company’s worldwide market share, which was between 7% and 9% had now dropped to 4% and sales were decreasing. We can describe Apple’s business strategy in terms of product differentiation and strategic alliances. The Apple Case Study Student’s Name Institution Affiliation The Apple Case Study Question 4-7. By recruiting Steve Jobs Apple did its first steps. According to the Apple case, Apple has using differentiation strategy create different and new product over it Managerial freedom within broad decision-making guidelines will resolve the institutional control dilemma. A U-Form organization resolves the inter-functional collaboration dilemma if there are product development and product management teams. The objective of this paper is to examine the business level and corporate level strategies for Edgar Company Apple Inc. Apple’s strategies are partly based on the need to address forces in the external business environment. 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. In the case of Apple, there was the opportunity to manage risk and share costs  facilitate tacit collusion , and manage uncertainty. In 1997 Apple Computer was in deep trouble. “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. Apple turned the corner in 1993. Tacit collusion is a valid source of economic value in network industries, which the computer industry is. A massive reversal occurred in 1997 and 1998. Your email address will not be published. That was a mistake. Although Apple eventually realized the economic value of strategic alliances, it should have occurred earlier. Many companies around the world is using this strategy currently since, efficiency of the manufacturing department is very low because of the poor execution sake. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. 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. Apple Inc. and how, through its technologically advanced abilities and electronic sharpness, it has propelled and introduced the world to a essentially new era of multimedia innovation. Apple’s Premium Pricing Strategy, Product Differentiation ... Steve Jobs, whose strategy for Apple had four pillars: Offer a small number of products.