case study
DESCRIPTION
TRANSCRIPT
Competitive Advantages
Current Competition -Very Intense
Threat of new
Entrants
Bargaining Power of
Customers
Threat of Substitute Products
Bargaining Power of Suppliers High
Low
Low
Very High
Current Rivalry:
• Very intense and fierce• Very low switching costs• Competitors Dell, IBM, HP, etc.
Threat of New Entrants:
• New entrants reluctant due to huge investments
Bargaining Power of suppliers:
• Two types : microprocessors and Operating system
Bargaining Power of Buyers
• Switching cost is low• Countered by companies having strong product differentiation
Threat of Substitute Products:
• Higher price needs justification for increase• Apple can charge higher price to creative designer community but not to common consumer
PC Industry
Intense competition
Technology going paradigm shifts
Coping with these changes make life difficult
Strengths
Brand awarenessProduct DifferentiationComplete package of hardware and software
Weakness
Heavy investment in ResearchNot a lean operations ManagementNot completely independent
Apple’s Difficulty Frequent changes in the strategiesClose system of the apple MacNiche market operatorPremium segment hence costly
Apple’s Difficulty in PC Industry
Apple’s Mac BusinessAgreement with Microsoft to invest $150 million in Apple
Launched the I-Mac, plug n play with multiple colors
Outsourcing and restructuring, while expanding to national chains
Direct selling through website
Paired down Inventory and heavy spending on R&D
Notebook products launched
Technology and Innovation
Integrated with the Intel Platform
Mac users able to operate both windows and Mac based applications
Leopard OS launched
Web browser Safari
MS-Office suit for MAC
Distribution and Sales
Threats & Competitors
Threats/Competitors
I-Phone: Initial Strategy
Rationale to launch I-phone: To integrate the i-pod with a mobile phone service and to reinvent the phone as a multifunction communication device
• 8 GB and 16 GB• AT&T Plan $59.99• No third party distribution• Edge Network 2-2.5 G• Battery life affected by 3 G• 19.5 market share during 1st Quarter•
Version 1 :
Version 2
• 8 GB and 16 GB• AT&T plan $ 69.99• Best buy retail channel• 3G Bandwidth• Google, YouTube partnership• I-tunes integration• Launched in 22 markets
Reasons for change in strategy
Availability of 3G
bandwidth and battery
life up gradation
Revenue sharing model
was not generating revenue
Price band was on the higher side,
and the early
adopters were not
interested
Retail chains were a better option
Design improvements
To make I-phone
successful and
international brand product
Strategies for IndiaCost premium attached to Apple products could
become a hindrance
Cost leadership strategy needed
Maintain product differentiation
Supply chain initiative
Demographic factors could play a major role to succeed in
India