Apple Case Study

1694 WordsFeb 3, 20087 Pages
1. Historically, what were Apple 's major competitive advantages? Apple were a very successful company at maintaining competitive advantage over its main competitors, this success can be analysed in more detail using Porter 's five forces model which is broken into: 1. The threat of substitute products 2. The threat of the entry of new competitors 3. The intensity of competitive rivalry 4. The bargaining power of customers 5. The bargaining power of suppliers These are the five forces that determine the competitive intensity and therefore attractiveness of a market. The threat of substitute products Lev Grossman once commented that, "Apple is essentially operating its own closed miniature techno-economy." In other words Apple…show more content…
This had become a steady trend since the inception of the PC industry in the mid 1970s. IBM are recognised as being the company who brought the PC to the mainstream and made it more affordable to the everyday user. For this reason the IBM brand became closely associated with quality products and retained a sizeable proportion of the market in the early 1980s. People were so drawn to IBM that they were reluctant to purchase product clones for fear of inferiority. These trends grew until an estimated 900 million PCs were in use worldwide in 2005. IBM began to lose its dominant grip on the market in the late 1980 's and its "IBM-compatible" standard, which was seen as being the best there was, was replaced by "Wintel" (Windows operating system with Intel processors). Markets for PCs such as the Asian market began to flourish and the average price of a PC actually fell from $1,699 in 1999 to $1,034 in 2005. From a manufacturing point of view the PC is made up of four main components, a microprocessor, a motherboard, memory storage and peripherals such as a keyboard, mouse etc. Therefore anybody with any bit of manufacturing knowledge could build a PC. This is mainly due to the fact that PC components have become increasingly standardised, in turn the leading PC manufacturers slashed their R&D budgets from 5% to 1%. Companies such as Dell, instead, opted to invest their money in other areas such as marketing etc. to give them a competitive edge. Outsourcing

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