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Those who changed the world … with BREAKTHROUGH TECHNOLOGIES!
Why..?
Apple & Google being announced as worlds No. 1 and No. 2 most
valuable brands.
Apple replaced coca cola from No. 1 position.
Strategies used by these two companies.
What..?
Part 1: Apple and Google being No 1 and No 2 & Technology Industry.
Part 2: Comparative Growth of Apple and Google over the years.
Part 3: PESTEL for Apple & Google and comparative SWOT and Porters for Apple & Google.
Part 4: Strategies used.
Part 5: Strategies currently being used and future plans by the companies and our recommendations.
How..?
Interbrand, a brand consulting firm ranks:
Constantly improving products.
Constantly new products.
Products worth fetching high margins.
Best spokesman.
Distribution.
Marketing.
Product Design.
Category 2012 Spending
2013 spending
Devices 627 666Data Centre Systems
141 147
Enterprise software
278 296
IT Services 881 927Telecom services 1161 1701
Worldwide IT spending forecast (billions of U.S. dollars) Source - Wikipedia
• 2.7 billion people – almost 40% of the world’s population – are online
• In the developing world, 31% of the population is online, compared with 77% in the developed world.
• Europe is the region with the highest Internet penetration rate in the world (75%), followed by the Americas (61%).
• In Africa, 16% of people are using the Internet –only half the penetration rate of Asia and the Pacific.
Apple Inc- Financial Data
Apple Inc- Net Sales
The growth in the Americas segment net sales during 2013 was driven by increased sales of iPhone following the introduction of iPhone 5 in September 2012 and iPhone 5s and 5c in September 2013, increased sales from the iTunes Store, and increased sales of iPad, particularly iPad mini
The growth in Asia was driven by the iphone and the ipad
Similar to the Americas segment, growth in net sales in the Europe segment during 2013 was primarily driven by increased sales of iPhone, iPad and higher net sales from iTunes
Same as above . Major contributor is the Ipad and Iphone
Apple eyes Rs 1,000 crore from iPhone 5S sales in India in Q3
Samsung leads the market Share in phones world wide
Nokia is at number two
Apple is a Number 3
All these are android except Nokia and Apple.Google earns Approx 3-4 dollars per android phone sold
Google Inc- Financial Data
Google Advertisement Revenue Share – Geographic Spread
Motorola Mobility Revenue Share – Geographic Spread
R&D Spend
VISION - Apple Inc
“Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them.”
“Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.”
MISSION - Apple Inc
"Google's mission is to organize the world's information and make it universally accessible and useful."
MISSION - Google Inc
Google’s vision is to deliver relevant results across all data sources – the Internet, a user’s local computer, and the corporate network.
The perfect search engine would understand exactly what you mean and give back exactly what you want
Larry PageGoogle co-founder
Focus on the user and all else will follow. - Since the beginning, we’ve focused on providing the best user experience possible....
It’s best to do one thing really, really well. - We do search....
Fast is better than slow. - We know your time is valuable, so when you’re seeking an answer on the web you want it right away–and we aim to please.
Democracy on the web works. - Google search works because it relies on the millions of individuals posting links on websites to help determine which other sites offer content of value.
You don’t need to be at your desk to need an answer. - The world is increasingly mobile: people want access to information wherever they are, whenever they need it...
Google Beliefs
Google beliefs..
There’s always more information out there. - Once we’d indexed more of the HTML pages on the Internet than any other search service, our engineers turned their attention to information that was not as readily accessible...
The need for information crosses all borders. - Our company was founded in California, but our mission is to facilitate access to information for the entire world, and in every language....
You can be serious without a suit. - Our founders built Google around the idea that work should be challenging, and the challenge should be fun...
Great just isn’t good enough. - We see being great at something as a starting point, not an endpoint...”
You can make money without doing evil.
PESTEL Analysis
Political
Economic
Social
Technological
Environmental
Legal
PESTEL Analysis – Political & Legal
• Different Countries, Different Laws• Patents, Trademarks and Copyrights• Ethical Business Practices• Consumer Protection• Censorship
PESTEL Analysis - Economical
• Income/Wages• Inflation• Young Spenders• GDP
PESTEL Analysis – Socio-Cultural
• Age demographic• Culture• Spending Preferences• Lifestyle changes• Gender Demographic
PESTEL Analysis - Technological
• Innovation• Product/Service Differentiation• Cloud Services• Technological Competition• Technological Capability
PESTEL Analysis - Environmental
• Emissions and Pollution Norms• Carbon Footprint• Greenhouse Gases• Energy Efficiency
www.blackle.com
Porters 5 Forces
Porters 5 Forces for Apple – New Entrants• Low cost of Forward/Horizontal Integration
• High cost of new hardware set-up
• Low cost to acquire part from foreign markets
• Moderate cost setup for new software services set-up
Threat of New EntrantsModerate to High
Porters 5 Forces for Apple – Substitutes• Online Music
• Pirated Music
• Freeware
• Alternate Entertainment sources
• Cheaper Hardware
Threat of SubstitutesHigh
Porters 5 Forces for Apple – Suppliers• Low number of Hardware suppliers
• Possibility of Exclusive tie-ups with Content Providers
• Low cost of Switching
• Apple always keeps the suppliers guessing
Bargaining Power of SuppliersLow to Moderate
Porters 5 Forces for Apple – Buyers
• Niche Segment Operation
• Loyalists
• Low Cost of Switching
• Lots of options
Bargaining Power of BuyersModerate to High
Porters 5 Forces for Apple – Rivals
• Works in a Product differentiated niche segment
• Large number of competitors
• Loyalists
• In the Top 3 Mobile phone sellers in the world.
Competitive RivalryHigh
Porters 5 Forces for Apple – Industry Attractiveness• Threat of New Entrants – Moderate to High
• Threat of Substitutes – High
• Bargaining power of Suppliers – Low to Moderate
• Bargaining power of Buyers – Moderate to High
• Competitive Rivalry – High
• Deciding Factor – Large Untapped Mobile phone Market
Industry Attractiveness High
Porters 5 Forces
Porters 5 Forces for Google – New Entrants
• Moderate Initial Investment
• Large requirement of Skilled Manpower
• Huge Capacity requirements
Threat of New EntrantsLow
Porters 5 Forces for Google – Substitutes
• Social Media is a big threat
• Peers poses a low threat
• Books poses a moderate threat
Threat of SubstitutesModerate
Porters 5 Forces for Google – Suppliers
• Moderate risk content providers switching away from Google and signing exclusive contracts with other content distributers
• Low risk of losing content creators for the Mobile Market
• Low risk of losing innovators
Bargaining Power of SuppliersLow to Moderate
Porters 5 Forces for Google – Buyers
• Limited choices in Search Engines• Limited choices in online Advertisers• Limited choices in Mobile OS• Moderate choices for browsers• Limited choices in all-in-one packages
Bargaining Power of Buyers
Low
Porters 5 Forces for Google – Rivals
• Microsoft & Yahoo have revamped their Search engines. Facebook has launched a Search Engine.
• IBM’s ‘Watson’ shows potential.
• No Mobile OS show potential to dethrone Android
• Gmail is the largest email service in the world
Competitive RivalryLow
Porters 5 Forces for Google – Industry Attractiveness• Threat of New Entrants – Low
• Threat of Substitutes – Moderate
• Bargaining power of Suppliers – Low to Moderate
• Bargaining power of Buyers – Low
• Competitive Rivalry – Low
• Deciding Factor – Large Untapped Internet Market
Industry Attractiveness High
SWOT Analysis
Apple
SWOT Analysis for Apple - Strengths
• No 1 brand in the world• iTunes• Loyal Customer base• Innovation• Impressive hardware• Strong R&D Team• Strong Execution Ability
SWOT Analysis for Apple - Weaknesses
• Limited Product/Service offering• Cost• Compatibility• Reliance on iTunes for everything• Less Market Penetration• Key technology features missing• Loss of a Visionary
SWOT Analysis for Apple - Opportunities
• Large Gen X & Y population• Tie-up and exclusive contracts with Content
Providers• Untapped hardware markets over the world• Untapped Internet Market all over the world
SWOT Analysis for Apple - Threats
• Open Source OS• Security• Piracy• Low cost hardware
SWOT Analysis
SWOT Analysis for Google - Strengths
• No. 2 Brand in the world• Search Engine Leadership• Innovation• One of the best work environments• Strong Financial Situation• Android
SWOT Analysis for Google - Weaknesses
• No major involvement in Hardware
• Only One Major source of Income
• Lots of non-profit products
SWOT Analysis for Google - Opportunities• Untapped Hardware market
• Social Media
• New Services
• Growing Mobile Advertising Market
• Strategic Acquisitions
• Untapped Internet Market all over the world (Fixed and Mobile)
• Android
SWOT Analysis for Google - Threats
• Partnership between big players
• Competitive Space
• Social Networks
• Privacy Laws
BCG Matrix
BCG Matrix - Apple
BCG Matrix - Google
Strategic Groups – Apple
Sony Apple Dell
SamsungBlackberry
SamsungHTC
Nokia
NokiaSamsung
Spice MobileSamsung
Nokia
Samsung
PRICE
FEATURES
Low Medium High
Low
Medium
High
Strategic Group – Google GenericSearch Engines
Region Focused Search Engine
Industry Specific Search
Engine
Social Media
Bing
Yahoo
Baidu
Makemytrip
Junglee
Naukri
5 Competitive Strategies – Google
5 Competitive Strategies – Apple
Apple
Ansoff Matrix - Apple
iPhone 5CiPad mini with Retina
displayiPAD Air
iWatch
MaciPhone 5
iPadiPod
Apple TV(India)
PRODUCT
MARKET
Current New
Current
New
Ansoff Matrix - Google
Google Debit Card Google Glass
Google SearchGmail
Google+Google TV
PRODUCT
MARKET
Current New
Current
New
Product Differentiation – Core Competency (design and technology)
Lifestyle Branding
Horizontal Integration – Acquire niche companies (50 acquisitions so far) Strategic Alliance for content eg. could persue alliance
with Amazon. Apple TV Alliances with Luxury Brands
Aggressive Technology Innovation- 64 bit chip 3D chip
Aggressive Design innovation- iPhone, iPad, iPod, MAC Research user interface possibilities
Recommended Strategies for Apple
Expand Apple store locations- 417 in 14 countries $4.5 B revenue from Apple Retail Store (Q3 of 2013)
Develop close relationships with suppliers Hon Hai Precision Industry Co., Ltd. (Foxconn)
Tailored Hardware/Software Systems iPhone Hardware and iOS
Hire and Retain Exceptional Talent Hired Burberry CEO for Apple Retail (fusion of fashion and
technology) Exceptional Software development team
Recommended Strategies for Apple
Develop on its core competency Search Engines – (60% untapped market)
Enhance search experience. Provide AI, native language search Algorithm improvements (hummingbird)
Aggressive Innovation Culture. Every employee has a research project Define future (Google Glass, Google Fiber, Google
Balloons) Partnership with universities and research
institutions
Horizontal Integration – Acquire niche companies (131 acquisitions so far.
YouTube, android, Picasa, Motorola etc) Strategic alliance – AOL , Invested 1B in
AOL..Salesforce.com – CRM and Ad Words platform
Vertical Integration – Entering into Device Space(Nexus), Chrome
desktops Aggressively enter mobile. Reduce dependency on search revenues (95% from
ads)
Recommended Strategies for Google
Recommended Strategies for GoogleHire and Retain Exceptional Talent
Best place to work . Rank #1Strengthen Cloud Eco System (Monetize existing infrastructure)
Develop PAAS, IAAS, SAAS Rent Infrastructure Long Lease on Infrastructure (2068)
Mitigate Privacy issues Strengthen data encryption mechanism (Gmail) Work with local government to address local
lawsEnter Enterprise Computing and Domain
computing (New Revenue Streams) Provide alternative to existing business
computing Study requirements on business domains
(Mobile banking, ecommerce)
Divest unprofitable products Orkut
