STRATEGY CASE STUDY

Apple Computer
Benjamin Royon Master in Management Strategy - Professor Davide SOLA

COMPETITIVE ADVANTAGES SOURCES

A disruptive and innovative company Innovator of personal computer First mover (experience curve, scale effect, size

a different value proposition A complete solution with bundled software plug and play :

With integrated value chain Proprietary designs, non replicable, can manage

An sucessful differentiation strategy Strong brand equity resulted in high customers willingness to pay and stickiness

INDUSTRY TRENDS
TOP 3 PLAYERS MARGIN LEVEL

From a early-stage market to a commodity one Segmented markets with different criteria (customer service) Easy to implement imitation lead to cheap pc clones Wintel leading the way

40% 35% 30% 25% 20%

15%
10% 5% 0% 1997 2000 Apple 2003 Dell 2004 HP 2005

PC INDUSTRY ATTRACTIVENESS
PORTER 5 FORCES ANALYSIS
Buyers

Suppliers

LOW

HIGH rivalry

Substitut es

HIGH

LOW

Entry threats

APPLES STRATEGIES
Sculley/Spindler years: into the mainstream Average prices Focus on innovation and internationalization (resulting in loss of competitive advantage) Focus on cost structure
Amelio/Jobs: back to differentiation Premium prices Not only a PC firm but a diversified organization Focus on cost structure (from 15 to 3 products, selectivity of distributors, 2 days of inventory)

APPLES DIAGNOSIS
SWOT ANALYSIS STRENGHTS
Successful differentiation Brand loyalty Global presence

WEAKNESSES
Cost structure (more R&D, less efficient operations than competitors) Dependency on suppliers

OPPORTUNITIES
Digital platforms (music, video, books, games, applications)

THREATS
Intense and smart competition
High dependency on leadership Closed world U-turn

SUSTAINABLE ADVANTAGE
With the iPod combined to iTunes : a sustainable advantage was created. An echosystem or platform (include third party players) lock the users ( razor/blade business model)