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 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. The company achieves the unrivaled differentiation of surviving from the beginning of the industry and is still operating prosperously. According to the Apple case, Apple has using differentiation strategy create different and new product over it Apple Inc. in 1997 vs. Apple Inc. in 2013 were in two completely different scenarios. A company attempts to make its strategy a sustained competitive advantage. 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 role also resolves disputes, particularly among the other leaders. I just did not see how it would make sense. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. 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. In 1997 Apple Computer was in deep trouble. The institutional leader creates the organizational infrastructure necessary for innovation. (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. This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. However, both companies have pursued different strategies to achieve their success. Business-Level and Corporate-Level Strategies  The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. It will evaluate the business, Customer Value Model Apple being strictly a personal computer company decided to venture into marketing other products like the iPod, a digital music player, and. 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 case starts by stating the fact that Apple computer changed to Apple Inc.! However, the difficulties with these drive the formation of strategic alliances. Introduction .................................................................................................................................................. 2 1.1 Competitive strategic position ............................................................................ Differentiation Strategy: Case Analysis Of Apple, Inc. In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. There are four primary organizing dilemmas when considering product differentiation as a strategy. Apple Corporation: Case Study on Pricing Strategies Apple is an American multinational company best known for developing and selling electronic devices and software worldwide. By recruiting Steve Jobs Apple did its first steps. Apple officially opened its first store in China in 2008, though prior to that Apple products were sold at premium prices in the Chinese grey market. This is why we see “Designed by Apple in California. 1. For instance, Apple 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. Think different in the world of technology and bring greater revenue. Apple launched its first product ‘Apple 1 … We can describe Apple’s strategy in terms of product differentiation [Pt 1] and strategic alliances [Pt 2]. The Story of an iPhone Video. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. The entrepreneur manages the innovative unit(s). The products made by the company offer something different. He pulled the plug, essentially killing its largest licensee (Power Computing). Introduction…………………………………………………………………………………………………. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. To resolve these dilemmas, there must be an appropriate organization structure. Apple and Samsung have achieved high levels of business success over the years. Case Study on Apple’s Business Strategies. For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. The following are some comments about Apple’s no-licensing policy. To realize our ambitious plans we must focus all of our efforts in one direction.” This statement was in the wake of Apple divesting significant software holdings (Claris/FileMaker and Newton). In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. 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. If suppliers increase their prices, a company with a differentiated product can pass that cost to its customers, thus reducing the threat of suppliers. In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. Product Differentiation Apple prides itself on its innovation. However, within these similarities, both companies have different corporate cultures, which differentiate the companies’ ideals. Apple turned the corner in 1993. Focus or Niche strategy…………………………………………………………………………………... Bargaining powe… The matrix is as follows: In 2001, Apple hit another important historical point by launching iTunes. 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. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers. Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003, obtaining cooperation from “The Big 5” Music companies–BMG, EMI, Sony Entertainment, Universal, Warner. 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. By iPad Apple choose differentiation strategy and iPad don’t cannibalize other apple devices like MacBook Air. What Should You Include in a Companies Operating Agreement? 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 Inc. and how, through its technologically advanced abilities and electronic sharpness, it has propelled and introduced the world to a … Despite high … Summary of Apple Case Study Analysis 1.0 Introduction 1.1 Introduction of Apple: Apple Inc. is the most famous name in the technology sector, it is an innovative electronics manufacturer, which is giving benefits to the consumers and to the suppliers, and the company is using successful strategies in the market so the best results could be achieved. We can describe Apple’s business strategy in terms of product differentiation and strategic alliances. Supply chain management is inadequate. The objective of this paper is to examine the business level and corporate level strategies for Edgar Company Apple Inc. Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. Afterwards several strategic alliances were formed: * The first strategic alliances … Then Apple introduced the iPod, central to the “digital lifestyle” strategy. Compare And Contrast The Trait Approach To Leadership. As a startup company Apple Inc went through several management changes and conflicts which caused the company to lose some of its competitive advantage against companies like Dell, Gateway and Microsoft. It would have been applicable to the industries in which Apple operated. Apple has focused on broad differentiation strategy that involves … Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. 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. The critic challenges investments, goals, and progress. They have done a good … A massive reversal occurred in 1997 and 1998. 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. 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. Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. Since the 1980s, Apple Inc. has successfully used product differentiation to separate its products from those of other electronics manufacturers. This generic strategy focuses on key features that differentiate thecompany and its information technology products from competitors. Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer. Learn how your comment data is processed. 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. The company offers various products for the different market it targets. Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995. Through product differentiation apple was able to achieve success and become one of the leading organizations in the world’s market. Apple Inc Case Study Of Apple. A business strategy, in most cases, doesn't follow a linear path, and execution will help shape it along the way. This case study covers the history of Apple and their strategic approaches implemented by the CEO’s over the years to make it one of the most successful and sustained company in the world. 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. 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. Contents Case Study 4 – The Apple of Your i 1. Apple, Inc. is one of the most successful companies in the world. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. Co-founded by Steve Jobs in 1976, the company was named under Apple Computers Inc. and its initial product Apple IIe gained relative popularity and success. 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. 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 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. Combining the old with the new resolves the connection to the past dilemma. MBA-FPX5006_RajagopalSundar_Assessment3-1.pptx - APPLE_CASE STUDY STRATEGY IMPLEMENTATION SUNDAR RAJAGOPAL CAPELLA UNIVERSITY INSTRUCTOR GUIDE \u2013 JOHN. The company’s products have always been designed to be ahead of the curve compared to its peers. (Porter’s generic strategies with particular reference to Apple Inc) If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. Time will tell whether that happens. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. 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. 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. Apple was founded by Steve Jobs and Stephen Wozniak in 1976;  Apple Computers  revolutionized the personal computer industry. 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. 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. A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. Analysis of Apple Inc. business Strategic Unit (iPad unit) Apple Computers Inc is considered to be one of the innovators in the computer industry. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. Apple is headquartered in Cupertino, California and was founded by Steve Jobs. Managerial freedom within broad decision-making guidelines will resolve the institutional control dilemma. 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 . The company designs and manufactures various products in the computer and music industry. An equity alliance should have contracts describing the equity investment. One of the major concerns of Apple is that if it tries to get an alternative to production in China, it will increase the cost of production, resulting in an increase in prices of Apple products. AppleInc.’s generic strategyis broad differentiation. However, Spindler nixed Gateway in 1995 due to cannibalization fears. 4. 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 had issues within its organization. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. The company has been providing robust technology products and exceptional software services. Strategic position of Apple Inc .................................................................................................................. 2 We were also naïve to think that the best technology would prevail. Apple Inc……………………………………………………………………………………………………, Introduction Syllabus contents: - supply ... View the below resources to see what logistics and global sourcing strategies Apple uses. There are some substitutes for an equity alliance, such as internal development and acquisitions. Part 1: Product Differentiation. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. This site uses Akismet to reduce spam. The release of the Macintosh revolutionized, value of Apple’s products and they are willing to pay a higher price to obtain it. This generic strate… When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. The mentor coaches, counsels, and advises. Assembled in China” on lots Apple’s products. Apple Inc. is globally renowned as one of the leading companies, especially for its specialization in the personal computers and consumer electronics industry. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. “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. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. Five leadership roles will facilitate the innovation process:   Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor. Which of Porter’s Four Competitive Strategies Does Apple engage in? It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. 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. The sponsor procures, advocates, and champions. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. The only person who’s qualified to run this company was crucified 2,000 years ago.”. 4 Key Things Employees Are Looking for From Their Next Workplace, Supportive Communication – Meaning and Attributes, Supply Chain Integration Strategies – Vertical and Horizontal Integration, Understanding the Importance of International Business Strategy, Employee Participation and Organization Performance, PRINCE2 Methodology in Project Management, Evolution of Logistics and Supply Chain Management (SCM), Case Study on Entrepreneurship: Mary Kay Ash, Case Study on Corporate Governance: UTI Scam, Schedule as a Data Collection Technique in Research, Role of the Change Agent In Organizational Development and Change, Case Study of McDonalds: Strategy Formulation in a Declining Business, Case Study: Causes of the Recent Decline of Tesla. They are as depicted below. Apple prides itself on its innovation. Apple attempts to increase market demand for its products through differentiation, which entails making its products unique and attractive to consumers. Apple has a history of shunning strategic alliances. It doesn’t think outside the box in terms of strategic imperatives, like building differentiation, growing margins or defensibility. The company is most well-known for the iPod, a digital music player and Macintosh, a personal computer released in 1984. 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. If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate. The Apple Case Study Student’s Name Institution Affiliation The Apple Case Study Question 4-7. 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. This paper proposes that Samsung should re-evalua… Through thebroad differentiation genericstrategy, Applestands out in the market. It released a highly stable operating system in 1999, and updates following 1999. If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. Apple had one of its critical points in history in 1999 when it introduced the iBook. 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. These forces can limit or reduce the firm’s market share, revenues, profitability, and business development potential. This paper compares the business strategies of both companies and reveals that their production, human resource and marketing strategies are inherently similar. Competitive rivalry or competition: Strong force 2. Apple prides itself on its innovation. This case study focuses on the mass enterprising activities of a world’s leading consumer electronics and software company, i.e. When organizing for strategic alliances, a firm must consider whether the alliance is non-equity or equity. 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. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. Apple is buying those inputs in a large volume and it allows Apple to negotiate good terms and pricing with its suppliers. It also serves as a meter of how products are designed. Focus on the high end. On June 25, 1985, Bill Gates sent a memo to John Sculley (then-CEO of Apple) and Jean-Louis Gassee (then-Products President). Apple expanded rapidly in the Chinese market through flagship stores and distribution points in China The company’s strategy was. Business-Level and Corporate-Level Strategies  The primary economic value of product differentiation comes from reducing environmental threats. Cost Leadership…………………………………………………………………………………………… This allowed iTunes Music Store online to offer over 200,000 songs at introduction. Case Study on Apple’s Business Strategies We can describe Apple’s strategy in terms of product differentiation and strategic alliances. Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. 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. There is economic value in strategic alliances. Music distributor have to make specific investments to broadcast music on … That was a mistake. Under Amelio, Apple licensed to Motorola and IBM. The company’s worldwide market share, which was between 7% and 9% had now dropped to 4% and sales were decreasing. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. 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. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. Strategy implementation is considered the toughest stage in the strategic management process. 4.0 Strategy Implementation. The case is about the US-based technology giant Apple Inc.’s (Apple) journey in China. 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. Bargaining power of buyers or customers: Strong force 3. When reviewing the history of Apple, it is evident that this attitude permeated the … Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. 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. 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. 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. A non-equity alliance should have explicit contracts and legal sanctions. The explosive, Introduction Of Apple Inc. The business was worth $400 million. Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. 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. 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