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Strategic Management

Extracts from this document...

Introduction

Strategic Management Case Study Report: "Apple versus Nokia" Contents page 1. Briefing......................................................................................................................................03 2.1 Apple's mission statement.........................................................................................................03 2.2 Apple's strategy.........................................................................................................................03 2.3 Apple's market.....................................................................................................................03-04 3. Overview of the multimedia download market...................................................................04-05 4. Key factors to success for Apple...............................................................................................05 5. PESTLE-Analyses................................................................................................................05-06 6. Porter's 5 Forces..................................................................................................................06-08 7. The Industry Life Cycle.............................................................................................................08 8. Four Links Model-Lynch.....................................................................................................09-10 9. SWOT-Analyses..................................................................................................................10-12 10. 1 About Nokia..............................................................................................................................12 10.2 Nokia's Mission Statement........................................................................................................13 10.3 Nokia's new N-Series compared to Apple's iPhone.................................................................13 10.4 Nokia's OVI new internet service and band name...............................................................13-14 11. Competitor Profiling: Benchmarking........................................................................................14 12. Analyses Conclusion.................................................................................................................15 13. Recommended Strategy based upon the TOWS-Matrix......................................................15-17 14. Conclusion.................................................................................................................................17 1. Briefing: The Board of Apple iTunes has requested a report that seeks to examine the key macro and micro environmental factors within the music download industry and provide significant information regarding the current threat of Nokia entering the music download market. Also, recent trends should be observed and a strategy has to be developed that will limit Nokia's impact and protect Apple's market share within Europe. In order to do so, we used significant instruments to analyse the market and we formulated a strategy accordingly. 2.1 Apple's Mission Statement: Apple is committed to bringing the best personal computing experience to student, educators, creative professionals and condumers arounf the world through its innovative hardware, software and iternet offerings. Apple continious to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the online phone market this year with its revolutionary iPhone. 2.2 Apple's strategy: Apple inc. is a vertically integrated company, manufacturing and supplying all hardware and software as well as its own operating systems. Apple Inc. chose this strategy so they could retain profit and ensure profit is not lost by financing other company's profit margins. The practice behind this theory is to heavily finance research and development and have have the necessary means of production to cover all areas of the business. ...read more.

Middle

The two huge brands have come together to create a fusion brand that will attract massive attention. Coca-Cola: Coca-Cola and iTunes teamed up to promote the release of a coke branded music website that had iTunes services integrated into the website. The website would be available across Europe and allow viewers to see the latest up and coming artists and to download podcasts from iTunes. "We're excited to announce this partnership with Apple...Together we are creating a unique and exciting platform that gives young people a voice and allows them to refresh their music experience every day." (Dominique Reiniche, president of Coca-Cola European Union Group, 2006) 70 million free songs would be downloaded from iTunes in the promotion due to special codes printed on coke bottles. The strategic decision was made by Coca-Cola to join with iTunes because of the failure of its own digital downloading website 'MyCokeMusic', which lost out to iTunes quite badly. The alliance means that Coca-Cola can sell music but it is only iPod compatible due to DRM restrictive measures. Network Operators:Apple's strategy was potentially to play the network operators off each other to ensure they got the best deal possible. Apple decided to go for the biggest operators in each of the country's that they were supplying the phone in: UK - O2; France - Orange; Germany - T-Mobile. O2 secured their deal by offering 40% of any revenues made from the iPhone and possibly more in commission and other areas. The tactics employed have left Apple highly unfavourable with other Network operators. (Wray, 2007) Complementors: It is the complementors who add the value to a company without there actually being agreements or strict negotiations. Companies such as SonyBMG, EMI, Universal and Warner all benefit iTunes because obviously if it wasn't for these companies iTunes would not function as well as it does and would not generate anywhere near the amount of money that it currently does. ...read more.

Conclusion

Furthermore Apple is adviced to continue relationships and cooperations with other big companies, as this will help to increase brand awarness and attract new customers, e.g. Starbuck's and the older customer segment! b.) Improvement of Technology: In order to maintain its leading position in the music downloading industry it will be highly important for Apple to provide consumers the opportunity to directly download files to their iPod/iPhone. The future of the music downloading industry is seen by many researchers as highly dependend on mobile internet, thus providing this technology will be essential for Apple's future success. Also, by doing so, Apple would decrease the risk of loosing potential customers to Nokia, which already offers this service on their mobile device. c.) Venture into ad-driven content: Apple is highly recommanded to move towards offering ad-driven content, as this has clearly been identified as a great opportunity for the company. The market is expected to change in the near future towards this kind of service as customers tend to download more if the service is free. Apple could use its position as the marke leader to negotiate with and attract companies that will potentially sponsor download services that could be offered for free to the customer. Apple is therefore being advised to use its innovative technology to complement the introduction of ad-driven content. This will mean that customers can purchase a device knowing that they can download digital content for free and therefore provide better value for money. This will reduce the perception that customers believe Apple's pricing is too high, due to offering more for the same price. 14. Conclusion: There is evidence to support the fact that Nokia constitutes a serious threat for Apple in the digital downloading industry. However, Apple has the capabilities and resources to not only protect its market leader position in the music download market but can also establish itself in other markets such as the mobile phone market or mobile download market. By following our recommended strategies, Apple should be able to accomplish its primary aim of protecting its market share and neutralizing the threat that Nokia poses. ...read more.

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