Apple Inc. 2008 Case Study

APPLE INC.

( MBA 660 USM)

Presented By:

Jennifer Cao

Mercy Antony

Tejal Sinora

Lashunda Price

Logan Tisdale

“Change the World through Technology”

• April 1976, Apple Computer, Founder Steve Jobs • Industry: Computer Hardware and Software,

Consumer Electronics• 1984, Macintosh• Sculley- Mac with new features• Amelio- Return to “Premium Price”• Jobs back-Apple Turnaround

Current Scenario• Sales

Current Issues

Steve Jobs

Current Issues

Low Market Share

6.6%

1Q Market Share08

Dell

HP

Acer

Apple

Toshiba

Others

Opportunities

• Fast growing Industry (Customer Electronics Industry)

• Technological Innovations• Extend new products to loyal customers• High Potential music phone market• Strategic Alliances

Big Move

• Jan 2007- Apple Inc.• CE Industry

Competitor Environment

• High Competition• Share of Dell and HP• Microsoft and Intel-Leaders of Software• CE Industry- Sony, Nokia, Samsung, Cisco,

Motorola

Competitor Environment

Threats

• Extensive Competition • Substitute Products• Low prices of Competitors• Technical Advancements• Economy downfall

Five Forces Model

• Branding • Innovation• Differentiated Product• Ease of Use• Superior Quality• Retail Strategy

Strengths

• Marketing and Sales• Customer Loyalty• Online Sales

Strengths

• High Price Proprietary System

• Niche Market, Less Penetration

• Cannibalization

Weaknesses

• Differentiation Strategy

• Value Creation

Core Competencies

Differentiation Strategy

• Unique Features and characteristics

• Commands Premium Price

• High Customer Service

• Superior Quality

• Prestige

• Rapid Innovation

Sustainable Competitive Advantage

FF

Value Creation Process

Focus On Education

eMac

Adding Value

iMac

Lifestyle Strategy

Digital Hub

Music Strategy (iTunes)

Video Strategy (iMovie)

Internet Strategy (iTools)

Convergence

Apple I,II,III Mac

Technology Development

New Product Ideation Designing/ Funding Product Creation Diffusing products across company

Value Chain

Inbound LogisticsOperations Distribution Sales and Marketing

Service

• Apple employs a Product Differentiation

• Drawbacks as a result of their strategy include:– Not appealing to Price Conscious Consumers – Risk of Imitation by Competitors– Risk of Change in Customer Taste

Apple’s Strategy

Apple’s Problems

Strategic Alternatives

Problem Strategy AlternativeLow Market-Share Price

DifferentiationExtend their current product line to include some products with a lower price point. Ex. Re-launch “Mac Mini”

Two Fold Agenda

• Continue to focus on niche market• Set up for Job’s replacement

The Strategy

• Consistently low share• High success in niche market• Brand differentiation

Market Share

• Ups and Downs of their own• Established Identity of Apple• Jobs’ success rate

Previous CEOs

• Concentrate on current customers• Expand niche market• Use iPod as gateway

Focus

• One year planning phase• Jobs appoints successor • Two year mentoring phase• Chief advisor position

Replacement Plan

Questions????