The Business and Management of Small and Medium Enterprises
Case Study 4: Apple case study
Table of content
1) What is Apple’s position in this industry and what are Apple’s competitive advantage? 3
a. SWOT’s analysis 3
b. The TOWS Matrix 5
c. Porter’s Five forces Model 6
d. The strategy clock by Bowman 7
e. Ansoff Matrix 7f. Product life cycle 8
g. Porter’s value chain analysis 8
h. Conclusion 9
2) Describe Apple’s development over the years and highlight any key stages 10
3) Can Apple be seen as a strategic innovator today? 11
4) How would you describe the way Steve Jobs runs Apple? 11
1) What is Apple’s position in this industry and what are Apple’s competitive advantage?Apple is a multinational which is famous for competing inside the Consumer Electronics Industry. Apple is an American company which is hugely admired around the whole world. As an American company, it can keep up with competing in this fast moving industry as it is dominated by American, Japanese and South Korean countries. This industry sets its focus on electronic equipment which isanticipated for day to day use covering the segments of entertainment, office productivity and communications.
As overall the aim of a business is to create value as it is for Apple as well. Value can be then translated into profit (Grant, p.35, 2010). The resource based view theory states that the profitability of an industry is linked to the profit of the company. In order to analyse Apple’sprofitability in this industry, one can look at various frameworks that will determine Apple’s position in the Consumer Electronics industry as well as give an outlook on its competitive advantage.
a. SWOT’s analysis
To start, one can use the SWOT tool analysis to highlight the link between Apple and its industry environment (Grant, p.12, 2010). It classifies the various influences on a firm’sstrategy into 4 categories: Strengths & Weaknesses which are linked to the internal environment and Opportunities & Threats which are related to the external environment (Grant, p.12, 2010).
Following, the SWOT analysis for Apple Inc. in order of importance:
• Innovative industry
• Product design
• Brand recognition – seen as an aspirational thus brand loyalcustomers (advocate the brand and therefore Apple can retain the customers as well as recruit new customers)
• “Apple experience”
• Customer service
• Creations of new markets
• Own operating system
• Implemented in different segments
• Heavy investment in Research and Development compared to other players forming a major cost for Apple as according to the BostonConsulting group matrix, most of Apple products are ‘cash cows’ yielding a high profitability(Salomon,2009).
• Guerrilla Marketing : Take Microsoft face-to-face with its image - Apple has always come up with innovative ways to ridicule and expose the short coming of the Microsoft OS
• Charge a premium price - Expensive in comparison to competition
• Not completelyindependent. (Apple relies on Motorola and IBM for processor chips so if these companies run short or increase their prices Apple must either absorb the cost or pass it along to their consumers.)
• Market saturation in the USA and Europe?
• Mobile phone/smart phone business – convergence of media
• Home entertainment (Digital TV, Apple TV, I tunes.)
•Reinforcement of illegal downloading laws (benefiting Itunes.)
• Enlargement of market scope (into LEDC’s.)
• Trying to grow on the educational market
• “Destructive creation” – Schumpeter (shorter business cycle)
• Development of Google’s Android, Motorola’s Xoom, HP’s Touchpad, Samsung’s Galaxy) in comparison of one of Apple’s product: the Ipad....
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