Apple Case Study

Objective of Case study:
Let’s start the whole story with the evolution of the term "Apple Inc." It was the name given to a company in 1996 just after it went almost bankrupt which started off as "Apple Computer". Apple Inc. in 2010 is celebrating smashing success in almost every measures - be it 'over faithful customers', 'rapid growth', 'high profits' or spectacular accomplishments since beginning in terms of 'innovation accomplishments’ and amalgamation of these features has raised the expectation bar very high for apple Inc. in 2010; very competitive for its market rivals and above all it has set a benchmark for study in terms of its External Analysis and Industry structure on various Parameters.
For the past 35 years- * all facts about Apple Inc. are unusual, yet interesting; * all its activities are debatable yet ultimately profitable; and * Finally all its business segments with their products are emergent of revolution yet approachable.
Parameters set to perform study:
Apple Inc. is continuously setting trends in the business world in terms of leadership skills, innovation of products, and ultimately deriving new meaning of 'demand vs. supply', and hence this makes it highly prone to get calibre by laureates on set parameters to enhance the global business arena with excitement. * Framework- Porter's five forces framework; * Skill- Leadership; * Structure- Industrial structure; * Analysis- External; SWAT Analysis * Tool- Porter- 5
Framework - Porter's five forces Model for Apple Inc.-
As per the five forces model norms, the factors are- * Suppliers and Customers- on a vertical level; * Competition from products, new entrants and rivals- on a horizontal level.
Apple is strictly focussed on design and marketing, outsourcing the manufacturing of most of its products, and is equally oriented for customer side in horizontal direction, performing most of its operations in its retail locations and online stores. Its famous saying in Apple Inc. that “you can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new- Steve Jobs”.

Low
Low

high high high high Low
Low

Explanation:
Because of its concentration of power in the middle and proximity to the customer, it also has more power over its suppliers, able to make strong demands, and it is also equipped to compete with horizontal players (like HP or SONY) who are not as vertically integrated towards the consumer. the additional benefit of a close customer- presence is that Apple Inc. has also initiated it as an opportunity to create customer focussed products, something at which most of the non- vertical integrated players are not good.
Leadership Skill:
Apple has smartly been blessed with Charismatic leader throughout its operations. As per the said proverb- “Leadership is all about finding the future and making it happen”. Steve jobs reshaped Apple Inc. in all possible ways to make it what it is today! * With Steve jobs’ innovation and motivation, Apple launched its trial version of personal computer. It was made in relatively smaller numbers. * A year later, Apple II was launched with Steve jobs at Apple’s helm of affairs, and was considered as a successful product. * Once after being out of Apple, he turned back in 1996 and transformed the fortune of Apple. His first act was to design IMac a year later, which was an instant hit as the all in one desktop computer featured advanced HD graphics and quad core processors. It was new beginning for Apple under the leadership of Steve Jobs. * Next year, he propose I pod in the industry, and in next year, he came with I tunes. * In 2007, first i- phone was launched, and in 2010, first i- pad was launched. * Every time, in his leadership, he accepted the challenge of developing and re-establishing a clear strategy for the organization, even in the presence of so many forces at work against making choices and trade-offs in organisation. In short, he proposed- * Core strategies- product based, aimed at driving the market; * Mechanistic approach to organisation; * Centralized, disciplinarian style of leadership, and it resulted into, * “companywide pursuit of perfection”.
Industrial Structure:
To analyse the industry structure, SWAT analysis can be carried out in one sense and Value chain creation process will enable to analyse the internal general environment as follows- * New Product
Ideation

New Product
Ideation

Designing/ funding
Designing/ funding
Value chain creation process:
Diffusing products across company
Diffusing products across company
Product Creations
Product Creations

As per study it is the followed chain in Apple Inc for Value Creation * Resource Valuation:
In terms of resource valuation, resource capability must be both rare and of high value. For Apple Inc. to enhance industrial structure, capability determinant on these two factors is significantly satisfactory, yet needed to remain upgraded as well.
External Analysis: * Based on five forces model, Apple has been able to command a premium in market and gain above average returns owing to its innovation and differentiation of technologically superior products. This learning and innovation in its products has led the Apple to leverage its expertise in the i-pod, i- phone, i- tunes, i- works suite of products. Over due course of time, Apple has been able to perfect the chain of activities in innovation and design leading to a fit between the activities which is difficult to imitate and hence offers them an edge over the competitors.

* Current rivalry:
It is very intense and fierce and the industry also has very low switching cost. This makes current rivalry very high.

* Threats of new entrants:
Since there are considerable investments to be made for setting up any industry, new entrants would be reluctant. But since the existing companies have created strong branding awareness, this threat would be low.

* Bargaining power of suppliers:
Considering it in overall business segments for Apple, two types of suppliers- microprocessors and OS: very few suppliers, but for memory chips, keyboards, disk drives, many suppliers. Suppliers will adjust pricing and quality to make their products more attractive, so competition is high leaving them in a low supplier position.

* Bargaining power of buyers:
Since switching costs are low, this situation places the buyer power in a strong position that can only be countered by companies with strong product differentiation that would increase the switching cost.

* Threat of substitute products:
The more differentiation of product the less likely the switch to a substitute will occur. If prices are higher, then the company with the higher prices has to provide the justification for the increase. For ex. Apple’s operating system differentiation can command higher pricing when it is presented to the creative designer community but not to the individual buyer community unless they are specifically looking for such enhanced graphic capabilities.
Overall, dynamics do not look favourable for Apple, but at the same time, Apple has been able to manage to retain its technologically savvy and designer approach to come out of this mirage
Tool- Porter 5:
Starting with the Macnitosh, Apple Inc. has enhanced its product as- I Pods, I Tunes, I Phones, App store and currently dealing with I Pad. Through Porter tool, it can be categorised into different segments and can be easily parameterized on the scales available in tool.
Segment A: PC Industry;
Segment B: I Pods + I Tunes;
Segment C: I Phones + app Store;
Segment D: I Pads
Further, completion of segment rating in terms of rating will put the corresponding value on Spider char individually for every segment declared as an industry. It will in its next step will concise to as spider chart summary, resulting into overall rating of the industry calibrated on all five forces as explained in external analysis.
SWOT ANALYSIS:
Based on the SWOT analysis parameter, as done in the tool format, following can be identified as the major points in terms of strength, weakness, opportunities and threats-
Strengths:
* Design and innovation capabilities * Distinctive graphical user interface. * Ease of use * own operating system reliability
Strengths:
* Design and innovation capabilities * Distinctive graphical user interface. * Ease of use * own operating system reliability
Weakness:
* Expensive compared to other competitors. * High repair and service issue
Weakness:
* Expensive compared to other competitors. * High repair and service issue

Threats: * Linux, Microsoft Vista, Microsoft Zune media player, IPhone vs. I-pod as I-pod design has become dull * Substitute products
Threats:
* Linux, Microsoft Vista, Microsoft Zune media player, IPhone vs. I-pod as I-pod design has become dull * Substitute products
Opportunities:
* Mobile phone business * Home entertainment: digital TV * Strategic Alliances
Opportunities:
* Mobile phone business * Home entertainment: digital TV * Strategic Alliances Recommendations to Apple Inc.:
Though Apple Inc. has loyal customer base, high quality technology in terms of both- software and hardware products, and excellent leadership style, enlisted below are point of notions to proceed further as per the complete analysis done on various parameters- * It is needed to collaborate with more technology related industries and companies. * Trying to make IMac more compatible. * Get prepared post Steve Jobs.