Dear Students, Here it is the learning notes (Apple, page 1 to 7, and Jet Blue, Page 8 to 17). Please, read them carefully and focus on the inherent logics of strategic thinking. See you on next Friday! Appreciatively, Damon

Apple’s iTunes: Changing the Face of Online Music Retailing
Apple has scored a big hit in online music retailing with iTunes and then a follow up with the iPod. Can Apple sustain its advantage against all of the current and future competitors that are likely to contend for this market? This is a flexible case in that it can be used to examine the external environment or evaluate internal capabilities. This case is in some ways about two very complementary industry segments: music downloads and portably music devices. Apple dominates the paid portion of the first and has 90 percent market share in the second, so the case is really about understanding how they achieved such dominance and assessing the possible threats to that dominance. The critical choice is whether to do the two industries sequentially are in parallel. I prefer to do them in parallel. I start with a discussion of industry structure with an emphasis on how and why it has changed in music downloads. Next, discussing the relative advantages and disadvantages of P2P and subscription-based services prepares you to address whether iTunes is a likely long-term solution to the problem of piracy. I then turn attention to an assessment of Apple’s competitive position with a particular emphasis on sustainability.

Objectives 1. Review industry structure concepts in a rapidly changing industry. The case is a clear example of how technological change can alter an industry’s structure and the threats and opportunities in that industry. 2. Evaluate sustainable competitive advantage in a dynamic industry. This case strongly suggests that Apple cannot stand still and keep its lead, so it challenges students to think about sources of sustainability.

Industry Structure What is the