Strategic Analysis and he indeed did so… Submitted by:NILESH A. MASHRU | PGDIBS-2012 | Roll no. 28 | Mumbai, BKC
American Multinational Corporation founded on April 1,1976 by the legendary Steve Jobs, Steve Wozniak & RonalWayne.Headquartered in California and present globallyDesigns & sells Consumer electronics, computer softwareand personal computersBest known for Macintosh computers, the iPod, the iPhoneand the iPad.World’s largest publicly traded technology company bymarket capitalization$108 Billion revenue in 2011, 60400 employees, 364 retailstores in 13 countriesWorld’s most admired company since 2008 as per FortuneMagazineMost competitive & fastest changing market space.
November 1997 - Jobs introduces a new line of Macintosh April 2010 - Apple begins selling the iPad, a 10-computers called G3, and a website that lets people order inch touchscreen tablet, and has an 84 percentdirectly from Apple. share of the tablet market by years end.1998 - Apple unveils the iMac desktop computer. Researcher iSuppli estimates 12.9 million iPads2001 - Apple opens its first retail store. were shipped as of December 10.2001 - Apple introduces the iPod, a palm-sized, hard- November 2010 - The Beatles 13 albums becomedrive-based digital music player. available on iTunes, ending years of talks2003 - The iTunes Store opens, allowing users to buy and between Jobs, Beatles management companydownload music, audiobooks, movies and TV shows Apple Corps and Beatles label EMI Group.online. January 17, 2011 - Jobs announces that he willJanuary 2007 - Apple announces the iPhone. The device take another medical leave.features one button on its smooth face and a virtual February 10, 2011 - Verizon Wireless, a venture ofkeyboard. It also introduces Apple TV, which attracts few Verizon Communications Inc and Vodafonebuyers. Group Plc, starts selling the iPhone in stores andSeptember 2007 - Apple unveils the iPod Touch -- puts an end to AT&Ts exclusive contract for theessentially an iPhone without the phone -- which has phone in the United States.wireless capabilities and performs much like a portable February 15, 2011 - Apple launches a long-computer. awaited subscription service for magazines,2008 - Apple opens its App Store as an update to iTunes. newspapers, videos and music -- a move thatThe store features small applications -- from games to could hurt streaming services Netflix and Hulu.social and business tools -- that add functions to the March 2, 2011 - Apple launches the iPad 2, aiPhone and iPod Touch. Apple also releases the MacBook sleeker, lighter version of its tablet with a newAir. dual-core processor, two cameras and, for theJune 2009 - Jobs returns to the company after undergoing first time, it comes in either white or black.a liver transplant.2009 - Apple releases the iPhone 3GS. The company hassold more than 220 million iPods so far.
Wozniak’s skill of manufacturing microcomputersJob’s vision of manufacturing a Personal ComputerShared Idea of Building & selling personal computers
Redesigned the TV Interface computer including graphics and eventually colour Improved case & keyboard Debuted at the West Coast Computer Fair on April 16, 1976. Sales for 1977 totaled $774K Most expensive of PC of it’s timeApple III - Introduced in 1980Focus of Apple III on competingwith Microsoft and IBM inbusiness arenaIncluded software for the first timeFaced stability issues & recalledNever successful
The ultimate all-in-one goes all out. It has fun written all over it.It’s Brilliant. In every sense of the word. It’s the most amazing iPhone, Yet.
Strengths Weaknesses Opportunities Threats• Strong brand name • Business Strategy • Paradigm Shift from PC • Intense Competition• Aggressive marketing • High Price to Mobile Era • Dynamic business efforts • Product offering vs • Emerging Markets environment• Lack of debt expectations • Growth in smartphones & • Risk of International• Innovation • Low market share in tablets market operations• Product popularity desktop & laptop • Evolution of digital • Risk of Imitation and• Design capabilities segment lifestyle piracy• Ecosystem of products • Corporate Social • Robust outlook for • Recent struggles on IPR Responsibility Mobile advertising infringement• Retail presence & Strategy • Product recalls • Improved standard of • Absence of Steve Jobs living• Wide Distribution • Sense of pride in owners• Horizontal & Vertical Integration• Research & development• Training to new users
Bargaining Power of Suppliers: Highly saturated industry in hardware Threat of New Entrants: componentsHigh capital investments in technology & Dependence on Intel for chips required forproduction Macintosh. However independence in non-pcEstablished brand presence of Apple devices helps mitigationHigh product differentiation Dependency of Microsoft for mac-compatibleHigh switch costs OS ; Apple being 3rd largest seller results inDynamic International business environment low bargaining power of Microsoft Competitive Rivalry: Bargaining Power of Buyers:Large no. of competitors and intense High number of substitutescompetition High number of product suppliersHigh product differentiation Low switch costs for consumersPositive reputation for high quality & Innovation helps Apple to maintainperceived uniqueness in eyes of consumers competitive advantageDynamic environment making innovationinevitable Availability of Substitutes: High no. of substitute products Product positioning & innovation vital for survival Strong brand name & loyal customer base lowers risk for Apple
Product Strength & InnovationExclusive Apple Stores – Ensure consumer loyaltySolutions provider & not a mere product supplierHip & posh brand imageProduct rangeMedia presenceConsistencyAttractiveness
Business Level Strategies Corporate Level StrategiesProduct Differentiation Retail strategyUnique Features R & D at home StrategyCommand Premium Price Branding EffortsHigh Customer Service Horizontal Integration by adopting aSuperior Quality digital hub strategyCreate sense of pride to owner Vertical Integration between PC &Rapid Innovation Music marketEducation Sales Focus on competitive advantageOutsourcing Services Be UniqueMedia fodder – maintain brand Moderate to High level ofcuriosity Diversification Maximize economies of scope with more products on same platform
A key to greatness is finding the intersection, or the sweet spot, of where your passion and strengths, intersect with economic opportunity. When Apple stayed focused in balanced way on their sweet spot, they excelled. When the focus was on profits first, they flourished for a period but then became arrogant, and began to descend quickly. When Apple concentrated on their passions at the expense of the practical needs and of the customer, they failed.
Find your noble passionMake your passion your customers Continually invest in your passion and talents Thinking deeply about the desired future experience of the customer Dont be confined. Innovate beyond todays realities Focus on both your customers functional AND emotional needs Use mockups extensively so you can visualize Create simplicity, elegance and beauty
S/O W/OIncrease IPhone and related product sales Global expansion through Mexico, Portugal,through online advertisement. Overall net France and Australiasales increased by 66% from 2010 Robust outlook for mobile advertising marketApple’s brand recognition throughout all its provides growth opportunitymarkets can strengthen by the offering less Creating departament responsible for recallsexpensive version of each product to appeal to and product warranties to maximize customerslower income market satisfactionThe company did not pay dividends because Improve brand recall through television adsit reinvests the capital in the operation of thebusinessFocus on B2B sales & promotion of software S/Tservices & reviving revenues of the iPod Purchase voice and data network to complement the smartphone division will help acquire W/T stronger market positionLong term agreements between Apple Inc. and Robust financial performance strengthensthe suppliers to guarantee production investors’ confidence and provides capital forcommitments future growth avenues, such as opening storesConstant promotion of the brand will create and expanding e-commerce throughout the globalstronger awareness and demand for products market.Promote laptop & desktop range & price them Focused R&D driving innovation andcompetitively consolidating its market position. Apple’s R&DParticipation in local communities and charities expenditure was $1,782 mil in 2010, an increase ofto create positive image which was shadowed 33% from 2009. This provides the company withby lawsuits new technological innovations which can be usedContinue investment in technology in order to in Apple products.stay ahead of competitors and become a Form a partnership with Google to supplementmarket leader the Apple products