Case: How Apple’s Corporate Strategy Drives High Growth
Case Questions: How Apple’s Corporate Strategy Drives High Growth
Norman Smith III, MGT 5509
1a.
They were focused on the ‘existing’ market of sophisticated and creatively-inclined users to sell fancy and elegant computers with a high profit margin per device, while Windows was expanding their market share to appeal to the ‘every man’ computer user using the slogan “Windows Everywhere”. In other words, Apple was fighting for an existing share of the pie (red ocean strategy), while Windows was looking to expand the pie and bring in new users to the PC market, which is ironic, considering that when Apple first started out, their goal was to bring in new users to their customer base by simplifying computer into an “every person’s computer” in order to offer value to new and potential customers and cast away the perception of the computer as a complex machine only navigable by wonks and geeks. When they strayed away from that strategy in order to cater to high-end, sophisticated users in their existing market with higher-margin machines, they started losing considerable market share, as Windows expanded and dominated the overall computer-user pie.
1b.
Which factors that the industry takes for granted on should be eliminated? They should do away with complementary offerings, such as printers, and focus instead on the meat and potatoes of what their customers want, which was user-friendly, easy-to-use computers. There were plenty of existing printers from a whole array of manufacturers at the time customers could choose from. Complementary offerings, such as printers, are worthless if the thing that makes them run (the computer) is too difficult for most customers to understand. Sales of complementary offerings will only be significant if sales of computers are high enough. People won’t buy a printer if they don’t first buy a computer, so Apple needed to focus on making computers people wanted to buy, which at the moment, they weren’t, so it didn’t make
Norman Smith III, MGT 5509
1a.
They were focused on the ‘existing’ market of sophisticated and creatively-inclined users to sell fancy and elegant computers with a high profit margin per device, while Windows was expanding their market share to appeal to the ‘every man’ computer user using the slogan “Windows Everywhere”. In other words, Apple was fighting for an existing share of the pie (red ocean strategy), while Windows was looking to expand the pie and bring in new users to the PC market, which is ironic, considering that when Apple first started out, their goal was to bring in new users to their customer base by simplifying computer into an “every person’s computer” in order to offer value to new and potential customers and cast away the perception of the computer as a complex machine only navigable by wonks and geeks. When they strayed away from that strategy in order to cater to high-end, sophisticated users in their existing market with higher-margin machines, they started losing considerable market share, as Windows expanded and dominated the overall computer-user pie.
1b.
Which factors that the industry takes for granted on should be eliminated? They should do away with complementary offerings, such as printers, and focus instead on the meat and potatoes of what their customers want, which was user-friendly, easy-to-use computers. There were plenty of existing printers from a whole array of manufacturers at the time customers could choose from. Complementary offerings, such as printers, are worthless if the thing that makes them run (the computer) is too difficult for most customers to understand. Sales of complementary offerings will only be significant if sales of computers are high enough. People won’t buy a printer if they don’t first buy a computer, so Apple needed to focus on making computers people wanted to buy, which at the moment, they weren’t, so it didn’t make