Apple_Inc

1. What, historically, have been Apple's competitive advantages'  * Bring easy-to-use computers to market. * Sculley years (1985-1993), Apple targeted low cost computer and forge an alliance with IBM for OS development on Intel platform, both of which didn’t bear any results. * Spindler‘s (‘93-‘96) strategy to expand to international market gave short-term results * Amelio (‘96-’97) decided to go back to premium price differentiation strategy * Steve jobs restructured company around the original strategy of Apple and turn that into a competitive advantage. * Apple’s competitive advantages are: * Control of software and hardware * Marketing * digital asset management, * retail strategy, * Apple has always had a proprietary design. * product differentiation: industrial design, elegance, product loyalty (coolness) * Synergy to use on all products (plug and play, entrertaiment hub) * Steve Jobs’s strategical decisions. 2. Is the PC industry a strategically distinct industry' Why or why not' * Moore’s Law: that the performance and capacity of an integrated circuit would double approximately every two years.  * his led to decrease in R&D spending. Hence almost all PC suppliers used cost differentiations as their strategy and sell to volume. The consumers are also very cost conscious and need value for money. * The product life cycle is short Analyze the PC industry, and evaluate its attractiveness using Porter’s Five Forces analysis. Is there a sixth force' Ifyes, what could we call that force' What is your conclusion about how good of a business is the PC industry' 6th force: new entrant Industry: include PC manufacturers like Dell and Apple, suppliers of semiconductor chips like Intel and Micron, suppliers of disc drives like Seagate, suppliers of software such as Microsoft, etc. Substitudes: Netbooks, Ultrabooks, tablets, smartphones Market: Education, home users, corporate . Threat of New Entrants The industry is highly concentrated. Following HP, Lenovo, Dell concentrate 50% of the market Since start-up costs for a PC manufacturer are high due to R&D, but the assempbly is low (like Dell did) the threat of new entrants is middle range. It is difficult to enter the market with existing firms already operating on cost and differentiation strategies. 2. Bargaining Power of Suppliers PC manufacturers provide such high volume orders that suppliers have been cautious not to temper with the relationship and ended up being in a low bargaining position. 3. Bargaining Power of Buyers They can switch brands because there is little differenciation. Interconectivity and such 4. Threat of Substitute Products/Services 5. Intensity of Rivalry among Competitors 4. How sustainable was Apple’s competitive position in the PC’s industry by the 1990s and beginning of the 2000s' 1990’s Began well. Continued heavy investment in R&D. International expantion. Gross margin reduced -> market value hit rock bottom 2000’s Success though iPod launch, entrertainment hub.