Apple Case Study

1340 Words6 Pages
Question 1: What, historically, have been Apple’s competitive advantage?

Historically, Apple’s competitive advantage has been product differentiation and premium pricing strategy. Apple is known for offering high-end innovative products. Mike Markkula, investor and entrepreneur, was able to attract a lot of venture capital which allowed Apple to place a significant investment into R&D in order to create its premium products. Unlike other “Wintel” firms that manufacture only hardware, Apple controls both hardware and software placing it into a unique position of providing consumers with a complete desktop solution. Their competitive advantage was driven by software such as Aldus Pagemaker and peripherals such as laser printers.
…show more content…
Right before they had acquired NeXT, a software company created by Steve Jobs that gave them the resources they needed to advance their OS, Apple had almost gone bankrupt.

Question 3: How sustainable is Apple’s competitive position in PCs, MP3 players, and smartphones? Apple’s long term competitive advantage will be sustained because of their differentiation and pricing strategies. Apple nested the concept of the “digital hub” where Mac could be the preferred “hub” to control and integrate all its products. They followed a very aggressive distribution strategy to penetrate the market and increase their reach to the consumers. Their retail stores will enable increased sales by letting the consumers experience their software and products first hand. Apple placed the ads in popular fashion magazines as opposed to just general computer publications. Through their initiatives of the “digital hub” comprising of iTunes, iPhoto, iWeb, they have been successful in practicing the strategy of bundling. Using this approach they create a perception of providing consumers the value for their money; however they extract the consumer surplus which results in positive economic profits Appx. 1, 1.1.
Apple will continue to sustain its target market in the PC world, which are the home consumers and the education industry. They value design, mobility and wireless

More about Apple Case Study

Get Access