apple case study presentation dinesh
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Apple over the years ( 1976 -201x)
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In its 36 years of existence Apple has evolved from being an assembler of Micro Computers to a digital convergence giant and the most cash-rich company on earth with over $100 billion cash reserves. Apple currently operates in several industry spaces
- Computers, Portables and Peripherals , Music /Media and Mobile
5 Forces Model - Pre-2002
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Bargaining power of Suppliers • Very few vendors
would agree for software for Apple products (including Microsoft)
• Only 2 large vendors for critical component - CPU (Intel, Motorola)
Threat of New Entrants • Entry into PC clone market is easy • Local Consumer base varies
Rivalry/Existing Competitors 1. Major threat from large
established manufacturers (IBM, DELL, HP, Compaq)
Bargaining power of Consumers • Apple products
were expensive but customers still bought them.
Threat of Substitutes • IBM PC Clones • Differentiators reduced as Technology
Innovations are copied / replicated.
5 Forces Model - Post 2002
Forces /Industry PC Music Mobile Phone
New Entrants HIGH
HIGH • Hardware – HIGH • Music – HIGH
HIGH • Short Product Lifecycle • High Investment Cost • Initial Contract with Carrier
required
Buyer Power HIGH HIGH • Switch cost is very low
HIGH • Choice based on Device Look &
Feel and Performance
Supplier LOW MODERATE • Many suppliers available
HIGH • Carriers • Component Manufacturers
Substitutes HIGH Laptops, Smart Phones, Tablets , Phablets
HIGH
HIGH • Local Regional Based Devices
Rivalry HIGH Existing competitors
HIGH HIGH • Competition from Android Phones • Competition from China Clones
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Activity System Map – Pre 2002
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Brand Value / Marketing Edge
Innovative Offerings
Pioneering Market Entry
Proprietary OS / Software
Hire Right People
Superior Simplistic Designs
Direct Retail
Leadership in Sectors
Extensive Research &
Development
Outsourced Production
Activity System Map – Post 2002
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Brand Value / Marketing Edge
Innovative Offerings
Pioneering Market Entry
Exclusive Apple Stores
Proprietary OS / Software
iTunes
Hire Right People
Superior Simplistic Designs
Direct Retail
APPS stores
Extensive Research &
Development Outsourced Production
What worked / What Didn’t
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Year Product What Worked What Didn't Work
1976 Apple - I Innovation - 1st Personal Computer Price
1977 Apple II Innovation - Color Graphics, Open Architecture, Floppy
1980 Apple - III Product Design Flaws Negative Publicity
1983 Lisa Innovation - GUI High Price - $10,000 Limited Softwares
1984 Macintosh Collaboration with Suppliers for PageMaker software, Innovation - Laser Printer
Slow Performance, Lack of MAC compatible software
1985 - 1990
Better Horizontal & Vertical Integration (Hardware as well as Software), Duopoly Approach
Change in Business Strategy diluted the differentiators (from Differentiation to Cost Leadership ), Federation of Corporate Alliances.
1994 - 1996 PowerMac Improved Processors with Price Correction
Change in Consumer Brand Loyalty. International Expansion backfired. Cost Cutting measures (Employee Reduction)
1997 Premium Pricing Strategy and Quality Issues. Failure of Handheld Devices
2002 Onwards Move to Strong Differentiation Strategy. Regular Product Upgrades / Launches.