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Strategic Management - Apple Inc. - Group 9[Autosaved]
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APPLE
By: Group 4
Case Facts
• Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976
• It was incorporated as Apple Computer, Inc. on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007 to reflect its shifted focus towards consumer electronics.
• Largest publicly traded corporation in the world by market capitalization
• Apple became the first U.S. company to be valued at over $700 billion
• 437 retail stores in fifteen countries
• iTunes Store is the world's largest music retailer.
• Annual revenue in 2014 totaled US$182 billion
STORY
• From Blue Boxes to Apple
• The Roller Coaster Begins
• The Gap Years
• Getting Apple Back on Track
• The Bottom Line
Problem/ Key challenges
• Competition and the pace of technological change
• Balancing stakeholders demands
• New competitors, low-priced rivals, and potential substitute products all threaten to reduce the perceived value of Apple products and the success of its strategy.
• Apple manages a broader range of products to a diverse customer base and navigates more markets.
• Suite of products is not based on internally developed hardware and software, but depends upon the ability to secure media content.
SWOT Analysis• Strength• iPod- the profit machine(largest market share (70%) of
the digital music market )• Strategic alliances through marketing partnerships.• Marketing competence • Products for range of applications.• Responsiveness to customer feedback.• Strong financial performance.• Strong brand image.
• Weaknesses• Incompatible software• Low Profit per song is low• 1% share of mobile phone market.• Unpopular Apple TV features.• Supplier Relationships.
• Opportunities• International growth and expansion• Improve compatibility• Consumer demand for "custom" features• Web technology and marketing• Licensing brand name with accessory
manufacturers
• Threats• Very large competitors with good reputations and
extensive resources.• Inability to please more diverse customer base.• Technology and entertainment industries are
rapidly changing.• GotVoice’s Visual Voicemail and is not limited to
cell phone devices.• New entrants from cross-industry integration.
Porter’s 5 forces
• Competitive Rivalry: high• New Entrants: high• Substitutes: high• Buyers: Medium• Suppliers: Low
Competitive Rivalry
• Price-cut to gain market share by competitors.• Key competitive factors- product features,
relative price/performance, product quality, design innovation, marketing and distribution capability, service and support.
New Entrants
• Highly attractive market and usually low barrier to entry
• Main barrier to entry- capital.• Large established consumer electronics companies
or on-line are enriched with resources.• With speed of information about new technologies-
start-ups also aggressively try to enter.• service provider entering potentially harmful
agreements with Apple's competitors
Substitutes
• New categories are constantly evolving
Buyers
• Enjoys price premium because of perceived value and marketing genius.
• Created a niche.
Suppliers
• Enough control kept by Apple to provide the quality.
• Not dependent on few suppliers, maintain a heathy network of suppliers.
SamsungPhilipsTexas InstrumentsLinear TechnologyOthers
Competitive Analysis: Business Model
Cost Leadership Differentiation
Focused Cost Leadership
Focused Differentiation
Integrated
Recommendation
• Continually invest in R&D to stay ahead and lead product and technology discoveries.
• Maintain and upgrade design appeal• Pay attention to the needs and objectives of
strategic allies.• Continue the expansion of Apple stores
• Focus on supplier relationships.• Emphasize the integrated system in
advertisements.• Use its 70% share in digital music industry as a
cash cow
Apple Now
• Apple’s iPhone revenue was more than three times Google’s total revenue in the third quarter of 2014, $16.5 billion.
• Apple has $178 billion in cash, more than enough to buy IBM at its current market cap of $152.3 billion.
• In fact, Apple could buy Ford, GM, and Tesla and still have $41.3 billion left over.