Case Analysis: Apple Inc., 2012
IBM introduced the personal computer into the mainstream in the 1980’s, after Apple pioneered the first usable “personal ” computing devices. By the early 1990’s, lower price and expanding capabilities drove the growth of “Wintel” (the windows OS combined with an Intel processor). The revenue growth continued through the early 2000’s then lowed over the next decades. The personal computer (PC) industry is in high dynamics, with new products emerging and old technology being abandoned quickly. With the requirement of cost cutting and the development of emerging market, contract manufacturing in Taiwan and China became popular. The dynamics are mainly driven by cost components cutting, software and hardware
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Almost the same, Microsoft had dominated the OS market since the IBM PC in the 1980s. Microsoft operating systems are used in 90% of computers, giving it substantial bargaining power.
CUSTOMERS:
PC buyers fell into five categories: Home, SMB, corporate, education, and government. These different types of buyers have different preferences towards PC. The strength of the PC buyers has evolved from the availability of numerous substitutes and fierce competition in PC industry. The switching cost for home and SMB buyers are relative low, while the switching cost for corporate, education and government may be high. PC buyers can access to information easily and are usually price sensitive. With the significant shift occurred in distribution, buyers are no longer dependent on a single channel to get the products.
Backward integration is also a factor, contributing the strength of buyers bargain power, since it’s becoming common that people are building their own computer systems. To sum up, the buyers have high bargain power.
COMPETITIVE RIVALRY
The fierce competition among the existing companies is mainly about product functions, cost control, prices and etc. Hewlett-Packard (HP) outsourced most of its production to Asia and lowered its costs. Dell won the second largest market share with its distinct combination of direct sales and build-to-order manufacturing. Lenovo dominates China, the fastest growing PC market in the world. By acquiring
Computer technology is constantly advancing over software and hardware that is available at any one given time. These constant changes affect how long computer products can sell for a premium price but also can make it cheaper for those consumers that are not interested in the newest and latest components. Personal computers (PC), also known as desktop computers, are common place in jobs, schools and homes. The demand for personal computers is constant and revolving since components of computers gets better and more powerful with time. The target market then becomes anyone that uses a personal computer for home or work. HP uses the fact that computers are a common item in any office or home to their advantage and offers not only PC’s but other accessories pertaining to computers as well. While HP currently excels at providing a product for a decent price they are missing out on consumers that Equalus will focus
The product chosen for the decline in consumer appeal is "a personal computer" (PC). This product is chosen because its sales and revenues are overall decreasing in the US market. Consumers are losing interest in using PC, due to obsolesce. PC is a technological product in which innovation and advance technology play an important role. New products are coming in the market with latest technological
During this revolution, a company named Microsoft developed itself a role in the computer industry and released its own operating system. In 1995, Microsoft had released their first operating system, Windows 95 which became the standard system used on all computers within days. Microsoft soon dominated worldwide sales of computer operating systems by the end of the 1990’s. Upon the turn of the century, Microsoft also realized that the business had the potential to develop a greater role in the computer industry (Microsoft
Apple Inc. started off as a small computer company and rose to prominence over the following years. They faced great challenges and obstacles to evolve and become one of the top notch corporations today. Having a great CEO, Steve Jobs, is credited for the success of Apple. Under the leadership of Steve Jobs, Apple was able to innovate industry changing technology.
The supplier group’s products are differentiated or it has built up switching costs for the buyer
Based in Cupertino, California, Apple Inc. has become one of the titans of the technological industry in the 39 years since it was created in the spring of 1976. This growing company employees over 115,000 people and has 450 retail stores in 16 different countries. With an annual revenue of $233 billion in 2015 Apple Inc. is the most prosperous technological company in the world. Along with its many retail locations Apple also runs the online Apple Store making it a truly global brand. Over the years Apple has expanded their product line; in its infancy the company specialized in personal computers but more recently the main product line is phones and tablets. Apple’s other significant products include computer software and other consumer electronics (iPod, Apple Watch, and Apple computers).
Apple Incorporated has come a long way over the years, starting more than 3 decades ago in 1976. Apple was founded by Steve jobs, Steve Wonzniak and Ronald Wayne initially entering a niche market in the production of the first computer, the Apple I, followed by the Apple II in 1978. Apple began its career as a successful company based upon strategic innovation, and they remain that way today, but it wasn’t always sunshine and lollipops, they experienced their fair share of struggles too.
Rivalry Among Existing Competitors: Although the number of PC manufacturers has increased since the 1980s, there still remain only a few dominant players who fight hard for market share. Many firms have chosen to compete in price, but Apple has competed with innovation. This is shown in Apple’s high R&D/Sales ratio in Exhibit 5, which routinely trumps that of Dell and HP. This is a mostly negative dynamic for Apple, because even though they spend more, they can’t charge significantly more on this price sensitive product.
Apple, incorporated. Created by innovative CEO Steve jobs (who recently passed away) and with the support of Steve Wozniak, is now a multinational corporation that’s focuses on consumer electronics, computer software, and commercial servers. With its broad line of revenue including: the apple computer, iPod, iPhone, iPad, and Mac apple strived for success with the idea to reach all consumers as its target market. The company started from Steve Jobs parent’s garage to its first building in Cupertino, California in 1977. The first computer (Apple I) was created in 1976 and sold to a local computer store called “The Byte Shop” offered at 500 dollars per assembled computer. This became the first computer to display text at 60 characters per
The company has managed to earn a profit in these tough economic times because of its diverse customer base, broad portfolio, and numerous cost initiatives (Edwards, 2008). The company made a commitment three years ago to focus on design and innovation in the PC replacement market by offering devices such as touch screen PC’s and easy to use software (Edwards, 2008). This has enabled the company to gain market share from its competitors such as Dell and Toshiba (Edwards, 2008). The company has also focused on innovation in printers and services that has helped boost consumer and business interest (Edwards, 2008).
As the first of the World’s Most Innovative Companies (Business week, 2010) and the 17th of the Best Global Brands (Interbrand, 2010), Apple has succeeded in strategic leadership and innovation, which has drawn attention from the world recently. This essay focuses on some key issues of Apple’s innovation. It begins with analyzing the key features of Apple Inc by Porter’s five forces and Kay’s distinctive capabilities. Then, the evaluations of the CEO Steve Jobs as the strategic leader and explanations of Apple’s
Although both companies have diversified into other industries, PC industry is still their most important source of revenue. For years, these two giants are battling for lead in PC market. When measured by market share, HP has taken place of Dell as No.1 seller in PC market since 2007 (FIGURE 1). When measured by revenue, HP also wins over Dell for almost five years (FIGURE 2). Also, Acer grew rapidly in market share partly because of its merger with Gateway in 2007 (Einhorn 2007), and almost matched Dell in 2009.
Apple Inc. has launched its iPhone in January 2007 (telegraph) as a new product in the market with latest technology and it was the first multi touch smartphone adding the feature of iPod and received an overwhelmed response by selling 270000 units. It had created a new record for a new company like apple, iPhone had laid a stepping stone for the success of Apple and till this time iPhone is the best seller product of Apple Inc. during first quarter of 2016 apple has sold over 74 million iPhones worldwide. (statista, 2016).
Apple Inc. is one of the leading publically traded companies in the world. Products from Apple become not only a household item but a daily necessity for majority of it consumers. Apple’s stock has obscured over $700 billion dollars in market capitalization in the year 2014 which provides a 7-for-1 split where accounting is concerned, which is about a 60% increase in the last year. Apple’s vast selection of products keeps the company fresh and moving in the direction where investors are feeling nothing short of satisfaction. Choosing to invest in Apple is a brilliant decision because even when circumstances are bleak Apple fights its way back to the top. In 2013 that was as substantial drop in stock; a major reason for that was the
This paper presents a case study of Apple Inc. Apple Inc. is a technology based corporation with emphasis on computer software and hardware (MAC and Apps), tablets (IPad), smart phones (IPhone), and mp3 plays, (ITouch). Apple Inc. has grown tremendously over the years and ever since 2001 has expanded its brand and retail stores to over 375 stores/outlets globally. The business has seventy two thousand eight hundred employees in thirty eight countries. Apple Inc. has truly become one of the most efficacious corporations within its field behind or competing with Microsoft and Google Inc.