• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Apple's strategy and five forces analysis.

Extracts from this document...

Introduction

Apple Inc. Gwen Johnson SJ Lee Michelle Middleton Nigel Ngai Greg Palmeri Business Capstone Professor Lee March 5, 2008 Executive Summary Apple Inc. is a company that designs, manufactures, and then sells desktop and notebook computers, portable digital music players, and cell phones. It also creates software like the OS X operating system, iLife, iTunes, or QuickTime; and peripherals such as printers or storage devices that go with these products. The biggest challenge Apple is facing is that consumers are reluctant to pay for songs and thus, Apple is losing customers to its competitors who are offering music at a lower price. This can be seen in increased piracy and code hackers. We came up with two possible solutions to address Apple's challenges. The first is to create a streaming music system. Using the currently existing streaming music program, customers can choose stations from different music categories. With a more personalized system they could choose stations that play music similar to an artist they already like. While the streaming music is playing customers would have the option to buy the song as well. The second option is to open up their music file sharing program with an all encompassing price. Apple stands to benefit significantly in the future from building a closed community with artists and consumers which will enable the company to compete more aggressively with record companies while also building a closed network which minimizes hacker risk. The second option of the closed community solves the main issues faced by Apple, like the loss of customers to competitors and dealing with illegal downloads from consumers, which is why we found this to be the best option for Apple to pursue. Its overall purpose is to deliver a competitive music package with top security, which adds value and significant competitive advantage to Apple's current processes. Table of Contents 1. The Strategy of Apple Inc. ...read more.

Middle

Apple has patents not only in their operating system and software, but also in the technology that allows monitors to record video of their viewers at the same time as displaying visual output in their computer products. They also have an integrated system with iPod and iTunes to allow the users to easily utilize both products. These resources are definitely rare as Apple hold patents, preventing other companies from using such technologiesx. The Question of Imitability: Do others companies without the resources or capabilities face a cost disadvantage in obtaining or developing Apple's resources? Apple is already holding the patents and copyrights in their technologies and designs. Since the patent extends to Apple the right to legally pursue any company that violates its intellectual property, companies are unlikely to engage in using this technology without permission for fear of significant amounts of money that could be paid out in damagesxi. The Question of Organization: Is Apple Inc. organized enough to exploit the full competitive potential of its resources and capabilities? Apple has a reputation for being a creative company and has the required procedures and practices in place to support the proper use of technology as a strategic resource. Apple Inc. has especially defined innovation and design activities as being of higher importance than the commercial aspect. Innovation and design have been at the core of Apple and its organization since its start, which increases the chance of the competitive advantagesxii. Table 2 Assessment of the Apple Inc.'s Internal Capabilities Are the Resources or Capabilities: Valuable? Rare? Costly to Imitate? Exploited by Organization? Competitive Advantages Yes Yes Yes Yes Sustainable Taken together, the analysis of Apple Inc.'s internal capabilities suggests that it is valuable, rare, costly to imitate, and organized to exploit opportunities. According to the result of this assessment, Apple Inc. is sustainable as long as it preserves and develops these competitive advantages in the industry, which requires being continuously innovative. ...read more.

Conclusion

software. 6. Apple's Competitive Advantage Apple will receive a sustained competitive advantage by implanting the Closed Community. Apple will have a long term advantage over its competitors because its new system will bring in new customers and then encourage them to use Apple exclusively. Another competitive advantage in the long run is that Apple will be building relationships directly with artists that will be hard for competitors to copy. i Apple Inc. (March 5, 2008). Business Week Online. Retrieved Feb 27, 2008 from http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=AAPL ii Apple Investor Relations. Retrieved Feb 27, 2008 from http://www.apple.com/investor/ iii Apple, Inc. (2005). Apple to Use Intel Microprocessors Beginning in 2006. Retrieved 4 March 2008, from Apple, Inc. Web site: http://www.apple.com/pr/library/2005/jun/06intel.html iv United States Securities and Exchange Commission (2008), Apple, Inc. Form 10-Q. Retrieved 2 March 2008, from SEC Web site: http://sec.gov/Archives/edgar/data/320193/000119312508017426/d10q.htm v Barney, J. & Hesterly, W. (2008). Strategic Management and Competitive Advantage. (2nd ed.). New Jersey: Pearson Prentice Hall, PC 1-11. vi Barney, J. & Hesterly, W. (2008). Strategic Management and Competitive Advantage. (2nd ed.). New Jersey: Pearson Prentice Hall, PC 1-6. vii Flamm, Kenneth. "Creating the Computer: Government, Industry, and High Technology". Brookings Institution Press. 1988. pg. 210-211. viii Sangan, Harold. "Apple and MP3 Player Market" Extracted from http://www.happle.org/etudes/happle-anglais_ipod.pdf in Mar 3, 2008. ix Apple Took 28% Share of US Smart Phone Market and is 3rd in Worldwide Market Share. Extracted from http://www.techztalk.com/techwebsite/node/393 in Mar 3, 2008. x Tomas, Owen. "New Apple Monitors to Double as Cameras" Business 2.0 Online Magazine. April 27, 2006: 2:36 PM EDT xi MBA 618. "Apple's 'Screen Cam'" Extracted from http://sahli1.blogspot.com/ in Mar 4, 2008. xii Holmberg, Tove., Lindqvist, Fredrik., Logander, Marcus. "Living On the Edge: A Case Study of Important Factors for the Survival of Apple Computers, Inc." School of Economics and Management, Lund University. Jan, 2005. xiii http://www.Pandora.com, accessed March 1, 2008 xiv A.B., Red Herring. "Pandora Media". Business Source Premier,October 7, 2007. xv et al. Barney & Hesterly 1-11 xvi et al. Barney & Hesterly ?? ?? ?? ?? Apple Inc. 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Legrand Company Analysis. Legrand is the global specialist in electrical and digital building infrastructures.

    In 2005, Legrand set out its commitments in an Environment Charter, providing a framework for the deployment of responsible environmental management at all its industrial sites. This proactive approach has led to a steady rise in the number of sites with ISO 14001 certification -in 2008, 81% of all sites

  2. Porters Five Forces - Easyjet, Ryanair

    The internet is now the preferred distribution method for ticket sales, access is relatively easy and comparisons can be made. Air travel is price elastic, demand will increase the lower the fares, suggesting the customer will search and select the lowest fare available for their destination.

  1. PEST analysis of uk mobile network industry

    Under these legislations since 2007, mobile operators have seen a slash in their estimated �8.5bn income from the roaming market. It is thought by the operators' trade body that the law is anti-competitive. Protecting the consumers - mobile phone users - may continue to be an issue of concern for

  2. ITC - diversification strategy

    In 1992, it merged with ITC Ltd. The mill and its paper machines were refurbished with the latest technology. It has a capacity of 33,000 TPY with a product range that includes cigarette tissues, fine papers, packaging papers and specialties.

  1. Internationalisation strategy

    Therefore, Japan was allocated its own exclusive cultural block. This suggests that it would not be possible for a firm to gradually build experiential knowledge for Japan. This would partially support the decision for HC to immediately enter the market.2 However, this argument suggests that knowledge of Japan would not increase understanding of other Asia Pacific markets, as previously thought.

  2. E-Business Evaluation of Tesco.com

    Although these economical factors are outside the control of the company, the effects on the performance of the company can be profound because of growing profits in international business. 2.1.2.3 Social Factors Social changes have been a great influence in the performance of Tesco?s e-business.

  1. PESTEL and Five Forces Analysis of the Cuban Cigar Industry.

    ⢠Legal Due to the socialist regime prevailing in Cuba, there are a lot of regulatory directives that the firms need to comply with. The Helm-Burton Act limits the trade that subsidiaries of US firms in other countries could conduct with Cuba.

  2. In order to successfully analyse Apple, the Star Analysis (Spuller, 2007) framework will be ...

    The model contains four determinants which Porter argues can act as bases for the nation to eventually become globally competitive. These four determinants are factor conditions, demand conditions, related and supporting industries and firm strategy, structure and rivalry. Factor conditions can include high amounts of raw materials and a highly skilled workforce.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work