Stgy 619 - Apple Inc 2015

CASE: APPLE

NEIL JOSHI

STRATEGIC MANAGEMENT

STGY619

DR. KYLE MURPHY

01/24/2018

1. What, historically, has been Apple’s competitive advantages?

I think Apple has two main competitive strategies over its competitors –

1. Invention – Apple has been a world leader in innovation and not necessarily the first to enter the market. Apple’s focus on trying to bring revolutionary products to the market did wonders for them. One of the path breaking products for Apple was the iPod. It set a standard for them.
2. Horizontal & Vertical Integration – This means that Apple depends on the designs created in-house and does not license software to third parties. This ensured their hold on the royalties and gave them an innovative edge over their competitors by not having cheaper clone products on the market.

1. Analyze the personal computer industry. Why did Apple struggle historically in PC’s?

Apple struggled in the PC industry due to various reasons, few of which have been discussed below –

1. Close System – Apple maintained secrecy with its products and by not licensing it to other producers, it lost out to IBM in the market share.
2. Price – Apple PCs were always priced higher than competition but with the reduction of PC prices across the industry, loyal customers also could not justify the high price. Apple PCs felt way over priced with the functionality being offered.

1. How sustainable is Apple’s competitive position in smartphones?

At the current market scenario, Apple has a commanding position as compared to its competitors in the smartphone industry. Apple, over the course of time, has developed an ecosystem of products which are inter connected with each other and over a period make these products indispensable to their users. For example, with the introduction of Apple watch, it made users dependent of two devices – iPhone and Apple watch. This kind of strategy makes Apple’s competitive position in the smartphone market indispensable.

1. Evaluate Apple’s strategy for Apple Watch? Has Tim Cook taken the right approach? Would you suggest any course corrections?

I think Apple’s strategy for the Apple watch has been on point. They have created a new price segment for the smart watch. They are justified in demanding a higher price as it is much more than just a watch or a fitness tracker. It is essentially a smartphone on your wrist. And to ensure it works complimentary to the iPhone, they are right in allowing the watch to work just with the iPhone.