Your email address will not be published. It is vital to remember, “Commitment, coordination, and trust are all important determinants of alliance success.”, Your email address will not be published. Apple Computers Inc is considered to be one of the innovators in the computer industry. In 2003, Apple released the iLife package, containing improved versions of iDVD, iMovie, iPhoto, and iTunes. April 28, 2014 April 28, 2014 / obsurvival. 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. A company attempts to make its strategy a sustained competitive advantage. To resolve these dilemmas, there must be an appropriate organization structure. The sponsor procures, advocates, and champions. Case Study on Apple’s Business Strategies, Becoming a Successful Learning Organisation: Case Study of Apple, Five Common IT Problems Encountered by Small and Medium Enterprises, Case Study of Steve Jobs: The Ultimate Intrapreneur and Entrepreneur, Porter's Generic Strategies - Differentiation Strategy, Case Study: Apple iPod Silhouette Ad Campaign, Effect of Relationship Marketing on Customer Retention, Case Study of Apple Inc: An Apple for Your Enterprise. In 2003, Apple released the world’s fastest PC (Mac G5), which had dual 2.0GHz PowerPC G5 processors. He pulled the plug, essentially killing its largest licensee (Power Computing). With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy. The following are some comments about Apple’s no-licensing policy. Other than that, Apple is using specialization strategy where they customized customer’s laptop according to their requirements. Under Amelio, Apple licensed to Motorola and IBM. Case Study: The Business Strategy of Apple Apple Inc is a multinational American company that design and sells computer software, consumer gadgets and personal computers. Managerial freedom within broad decision-making guidelines will resolve the institutional control dilemma. Apple established a reputation as an innovator by offering an array of easy-to-use products that cover a broad range of segments. 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. It released a highly stable operating system in 1999, and updates following 1999. Apple prides itself on its innovation. Product differentiation is a viable strategy, especially if the company exploits the conceptual distinctions for product differentiation. Activity 3 - Outsourcing (20 minutes) Apple outsource the component creations of its product to many overseas businesses. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. If the number of competing firms implementing a similar strategic alliance is relatively few, the strategy is rare. Investors and consumers alike see Apple as a powerhouse, which makes it easy to forget the rocky history of leadership within the company. 500 + Shipping & Handling Charges extra » Business Strategy Case Studies » Case Studies Collection » Business Strategy Short Case Studies » View Detailed Pricing Info » How To Order This Case » Business Case Studies » Area Specific Case Studies » Industry Wise Case Studies “If Apple had licensed the Mac OS when it first came out, Window   wouldn’t exist today.” – Jon van Bronkhorst, “The computer was never the problem. Apple then opened its own stores, in spite of protests by independent Apple retailers voicing cannibalization concerns. The company most revered brands are Mac, iPad, and iPhone. An equity alliance should have contracts describing the equity investment. What we should have done was calculate an appropriate price to license the operating system. The entrepreneur manages the innovative unit(s). Business Case Study: Management at Coca-Cola Next Lesson Business Case Study: Apple's Management Style Chapter 3 / Lesson 8 Transcript The company does not own and operate manufacturing or production facilities. Apple has followed a vertical integration strategy to build a formidable competitive advantage. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. Amelio suddenly resigned in 1997, and the stage was set for Jobs to resume power. All the high tech products provide consumers with a better living standard in many different ways. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. Therefore, Apple products design is always attractive and elegant compared to those existing competitors. Today Apple Inc. is very well known in the world because of their advanced technology in products such as iPods, iPhone, Macbooks, Apple TV and other professional software. On the other hand, Windows does not have such technology. Customers are required to add in features into the laptop which can serve them better. In this case study, the focus will be on Apple, the world largest publicly traded company by market capitalization with current estimated value of US$530 billion and the second largest mobile phone manufacturer in the world (Booton, 2016) . Therefore, Apple is … Overview Apple inc. is a Multinational Corporation operating in 97 countries worldwide. This mini case study sheds light on the role that design thinking and innovation played in helping Steve Jobs rescue Apple with his consumer-driven strategy and vision for the company. They can also “synchronize” and update the songs in their iPhone with a laptop. In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. Ionology’s 7 Principles of Digital Business Strategy is applied to the case. This is a case study of how in 1997, Apple was able to change their fortunes and transform their business all by having the right strategy. I just did not see how it would make sense. Learn how your comment data is processed. The second strategy applied by Apple is differentiation. How Innovation Contributes to Competitive Advantage? This site uses Akismet to reduce spam. The institutional leader creates the organizational infrastructure necessary for innovation. 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. As for pricing, Apple is using skimming pricing strategy where they set high selling price for their products. This case study is about innovation at Apple Inc. (Apple), one of the most valuable companies in the world in terms of market capitalization. iPhone App Store ” blocks innovation, blocks competition,” and “allows Apple to charge monopoly rents.”. A non-equity alliance should have explicit contracts and legal sanctions. In terms of applications and software, Appstore provides a platform for customers to download software and applications according to categories. Your email address will not be published. Apple's corporate strategy – one of creativity, innovation, and the pursuit of excellence – can be summarised in its mission and vision statements: Your email address will not be published. Apple Inc is a multinational American company that design and sells computer software, consumer gadgets and personal computers. This generic strate… Time will tell whether that happens. Apple led the global technology market by developing innovative products such as the Mac, the iPod, the iPhone, and the iPad which redefined their respective markets. In 1997, Jobs overhauled the board of directors and then entered Apple into patent cross-licensing and technology agreements with Microsoft. They must be competitive, flexible, fast and meet … A massive reversal occurred in 1997 and 1998. However, Spindler nixed Gateway in 1995 due to cannibalization fears. View our Apple case study presentation slides Get our Brand Toolkit Our most comprehensive package includes over 100 PowerPoint slides for a brand plan presentation, brand plan on-a-page, brand strategy roadmap, business review, brand positioning presentation, creative brief, mini brief, brand concept, brand credo, and brand story The company has been benefiting from its vertical integration immensely. In a nutshell, the key to Apple’s success is down to creating a unique product with the ability for it to be customized to suit each individual’s needs. Since a company with a differentiated product competes as a quasi-monopoly in its market segment, there is a reduced threat of buyers. That was a mistake. (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. Beside this, Apple also emphasizes customizability on the part of entertainment that offer computer-build for high performance such as gaming. A U-Form organization resolves the inter-functional collaboration dilemma if there are product development and product management teams. Macbook users are satisfied with Macintosh performance because it is very energy saving where the processor will automatically “close” those programs which are not in use when it is in standby mode. We were also naïve to think that the best technology would prevail. Required fields are marked *. It would have been applicable to the industries in which Apple operated. Business Strategy. Gaming plays important roles to help Apple to customize in features and specification to make the products more attractiveness and creativity. However, to those consumers who are concerned about technology and high performance, Apple is still the preferable choice. Apple lends us an interesting example of how good leadership is vital for the success of a corporation. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. Apple has a history of shunning strategic alliances. 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. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. Case Study: The Business Strategy of Apple, Business Level Strategies - Cases of Wal-Mart, Apple, Zara and Ikea. There are some substitutes for an equity alliance, such as internal development and acquisitions. Apple’s vertical integration is one of the major factors that set it apart from the competition. Those that are relevant to Apple are product features, product mix, links with other firms, and reputation. Later, Apple introduced the easy-to-use iMac in 1998, and updates following 1998. A CASE STUDY OF APPLE SUPPLY CHAIN . Apple business strategy can be characterised as vertical integration in a way that the company has advanced expertise in software, hardware, and services at the same time. APPLE’S PROFITABLE BUT ISKY STRATEGY Case Study [Type the author name] CASE STUDY ON PROFITABLE BUT RISKY STRATEGY OF APPLE INTRODUCTION: A long term plan and action that is formulated to help a company to setback and achieve a competitive advantage against its competitor and rival is called competitive strategy. Required fields are marked *. Five leadership roles will facilitate the innovation process:   Institutional Leader, Critic, Entrepreneur, Sponsor, and Mentor. 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. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. In most courses studied at Harvard Business schools, students are provided with a case study. 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. On June 25, 1985, Bill Gates sent a memo to John Sculley (then-CEO of Apple) and Jean-Louis Gassee (then-Products President). As from 2013 to 2015, the company has recorded a steady rise in annual revenue. In 2013, the company annual revenue was … This generic strategy focuses on key features that differentiate thecompany and its information technology products from competitors. Learn how your comment data is processed. Apple was founded by Steve Wozniak and Steve Jobs in 1976. However, there are still a lot of loyal customers who prefer to spend more money on Apple products. Since Jobs took over as CEO in 1997, Apple seems to have resolved the innovation dilemmas, evidenced by their numerous innovations. This is due to the self esteem where consumers feel good by carrying Apple products because it somehow shows their status as being up-to-date and their taste is better than others. They are as depicted below. Apple turned the corner in 1993. In 2012 Cook reduced component suppliers from 100 -24, forcing Suppliers to compete. Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. The cost of product differentiation acts as a barrier to entry, thus reducing the threat of new entrants. From the study, the conclusion is if the company wants to continue to succeed the same way then it must consider macro and micro environmental factors. Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. 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. It begins with the emergence and development of Apple and his initial public offering (IPO), followed by proceedings of inter-nationalization. Specifically, an important source of Apple … However, the difficulties with these drive the formation of strategic alliances. The company is often criticized because a 30% cut is a significant commission for small businesses or app developers. 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. 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. Besides that, iTunes also allow consumers to transfer photos from iPhones to PCs. Important Soft Skills for Workplace Success, The SCP Paradigm - Structure drives Conduct which drives Performance, Customer Confidence Winning Strategies Adopted by Organizations, PRINCE2 Methodology in Project Management, Apple Computers Inc is considered to be one of the innovators in the computer industry, Understanding Different Types of Supply Chain Risk, Supply Chain Integration Strategies – Vertical and Horizontal Integration, Understanding the Importance of International Business Strategy, Employee Participation and Organization Performance, Psychological Contract – Meaning and Importance, Workplace Effectiveness: Easy Tips to Bring the Team Together, Portfolio, Programme and Project Management Maturity Model (P3M3), 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, Roles and Responsibilities of Human Resource Management. It was co-founded by Steve Jobs, Steve Wozniak and Ronald Wayne. . 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. In terms of design, Apple came out with an ultra-thin Macbook Air which is extremely thin compared to those existing laptops. Apple BUSINESS STRATEGY Business Strategy Objective: To develop a market demand for Apple products in developing countries to insure the longevity of the Apple brand. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. Apple Inc is well-known for being innovative as they kept on producing new innovations from the first Apple computer Macintosh to the more recent iPhone and iPad series. It offers an array of products from computers to televisions to software. Furthermore, Apple also created a substantial value in highly competitive market and industry which help them to achieve competitive advantages in an industry with stiff competition. In addition, it resolves the other external factors that present difficulty challenges to Apple Inc. INTRODUCTION APPLE’S HISTORY & PRODUCTS STEVE JOBS ROLE SWOT ANALYSIS PORTERS FIVE FORCES - IPHONE PESTEL ANALYSIS BOSTON I PORTFOLIO SOURCES The products made by the company offer something different. In 1996, Apple announced the $427 million purchase of NeXT Software, marking the return of Steve Jobs. In this Apple case study, the aim is to identify the internal as well as the external factors that have an impact on obtaining achieving high performances by Apple. There is economic value in strategic alliances. He felt that up-and-coming rival Sun Microsystems would overtake Apollo Computer, which did happen. As CEO in Apple, Steve Jobs carefully evaluated competitive pressure and opportunity in market place by continuously pursuit customer experience innovation. The mentor coaches, counsels, and advises. A Leadership Case Study: Apple. Apple’s business strategy controls its unique ability to design and develop its own operating systems, hardware, application software, and services. For example, elegant design and user-friendliness ofproducts, combined with high-end branding, effectively differentiate the technologybusiness. The company’s strategy was. 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. If there are fewer firms differentiating than the number required for perfect competition dynamics, the strategy is rare. People will never need to carry multiple devices where each one only offers a handful of functions. In the case of Apple, there was the opportunity to manage risk and share costs  facilitate tacit collusion , and manage uncertainty. In 1985 … Gil Amelio, an avid supporter of licensing, took over as CEO in 1996. Jobs despised licensing, calling cloners “leeches”. Combining the old with the new resolves the connection to the past dilemma. Full strategic case analysis for Apple incorporation including industry , competitor's and firm's self analysis. There are four primary organizing dilemmas when considering product differentiation as a strategy. This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. A company’s differentiated product will appear more attractive relative to substitutes, thus reducing the threat of substitutes. Thus, Windows’ users might have to charge the laptop more often due to the battery consumption is higher than Macintosh. Why Businesses Need an Efficient Management Information System? Then, Sculley and Michael Spindler (COO) partnered Apple with IBM and Motorola on the PowerPC chip. The matrix is as follows: In 2001, Apple hit another important historical point by launching iTunes. There is economic value in product differentiation, especially in the case of monopolistic competition. It means that Apple will be more focused on looking outwards, market and business drivers rather than at the products or services that already exist. The critic challenges investments, goals, and progress. When organizing for strategic alliances, a firm must consider whether the alliance is non-equity or equity. Focused on segments worldwide and United States the macro-environmental analysis It is easy to search for any application or software by using Appstore. The business was worth $400 million. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. But my approach was stupid. How has Trading Been Affected in Asia Due to Corona, PRINCE2 Methodology in Project Management, Design for Manufacture and Assembly (DFMA), The SCP Paradigm - Structure drives Conduct which drives Performance, Apple Inc is well-known for being innovative, created a substantial value in highly competitive market, Steve Jobs focused innovation on competitive pressure and value proposition, Apple products design is always attractive and elegant, the innovation of Apple Company by creating digital lifestyle, iTunes allow consumers to categorize and download songs easily, Understanding Different Types of Supply Chain Risk, Supply Chain Integration Strategies – Vertical and Horizontal Integration, Understanding the Importance of International Business Strategy, Employee Participation and Organization Performance, Psychological Contract – Meaning and Importance, Workplace Effectiveness: Easy Tips to Bring the Team Together, Portfolio, Programme and Project Management Maturity Model (P3M3), 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, Roles and Responsibilities of Human Resource Management. A business strategy, in most cases, doesn't follow a linear path, and execution will help shape it along the way. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. Sculley and Spindler were hoping IBM would buy Apple and put them in charge of the PC business. Apple – A Digital Business Strategy Case Study This is a case study of how in 1997, Apple was able to change their fortunes and transform their business all by having the right strategy. It was co-founded by Steve Jobs , Steve Wozniak and Ronald Wayne. Case Study on Apple’s Business Strategies. Instead, hardware parts such as display panels are either bought from third-party manufacturers, and propriety hardware such as the processors found in the iPhones and the iPads are manufactured by outsourced companies. But, like any other brand, Apple also started as a small company. 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. Some customers think that Apple products are not cheap but also not high-priced products because the value of Apple products bring to them is never disappointing. Outsourcing is another remarkable business strategy of Apple. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. Spindler begrudgingly licensed the Mac to Power Computing in 1993 and to Radius (who made Mac monitors) in 1995. Please give me a call.”   In 1987, Sculley refused to sign licensing contracts with Apollo Computer. 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. SWOT Analysis of Apple. We can describe Apple’s business strategy in terms of product differentiation and strategic alliances. By using iTunes, consumers can choose their preferable album cover for their songs. Price: For delivery in electronic format: Rs. The Subject of the following elaboration is the analysis of the strategy of the Apple, Inc., formerly Apple Computer. The primary economic value of product differentiation comes from reducing environmental threats. It also serves as a meter of how products are designed. To those consumers who prefer lighter and thinner laptops will definitely be attracted to the Macbook Air. Apple on the other hand practiced horizontal and vertical integration which gave it the dual advantage of significant reduction in costs as well as its … If there is no direct, easy duplication and there are no easy substitutes, the strategy is difficult to imitate. 500; For delivery through courier (within India): Rs. 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. Harvard Business Case Studies Solutions – Assignment Help. This allowed iTunes Music Store online to offer over 200,000 songs at introduction. Apple Computers Inc is considered to be one of the innovators in the computer industry. The company is successful because it efficiently … Apple had one of its critical points in history in 1999 when it introduced the iBook. 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. That never came to fruition, because Apple (with Spindler as the CEO) seemed contradictory and was extraordinarily difficult in business dealings. 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. Then Apple introduced the iPod, central to the “digital lifestyle” strategy. 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. The company offers various products for the different market it targets. 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. 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