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Apple Case Study Historical Timeline of Apple Inc. 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.IBM entered the market in 1981 and gave Apple its first real competition. Apple managed to bounce back and thrived on this competition to abolish complacency and starting findings new ways to stay on top.
Macintosh was released in 1984 and they focused on that for the 1980’s and 1990’s. The emphasis Apple put into the Macintosh turned out not being the best decision for the company, and they almost went bankrupt in 1996. What Apple did in response makes them the powerhouse company they are today.
In 2001 they released the iPod along with opening their first retail store in Maclean Virginia.The retail store was a huge success for Apple as it allowed them to build a relationship with their customers in person, an advantage they had over their competitors. Apple continued to create other new, revolutionary products such as the iPhone in 2007, the iTouch in 2007 and the iPad in 2010. As this course is based upon Strategic Leadership the history of Apple’s managerial progress is an interesting timeline in itself. Steve Jobs was the head of Apple since its creation in 1976 up until he supposedly resigned in 1985.
John Sculley and Michael Spindler had shorts stints as CEO until Gil Amelio took over in 1996. Amelio turned out to be a huge mistake for Apple as he nearly forced them bankrupt. Due to this disaster Apple decided to call back Steve Jobs to CEO who became the official head again in 1997. Jobs has since turned the Company around with innovation creating the iMac and declaring their new focus on non-PC products and making the company appear younger and more attractive appealing to a broaden target audience.Macro-Environmental Factors When it comes to the product and development stage of Apples production line there are several decisions that need to be made including those that effect the social and cultural environment that surrounds us.
There has been a huge shift within the last decade of people adopting a lifestyle associated with the concept of “green”, and Apple is doing their part in the reduction of their carbon footprint. But how green is Apple?Apple’s notebooks lead the industry in the elimination of toxic chemicals by having a Mercury-free LCD display, arsenic-free display glass, Polyvinyl chloride (PVC)-free internal cables and components, and being free of brominated flame retardant (BFR). The newest MacBooks also have a highly recyclable aluminum and glass enclosure.
In addition Apple has cut down the size of their boxes so that more boxes can fit in a shipping container. This requires less vehicles to transport, and in the end cuts down the amount of greenhouse gas emissions that are created.Apple has is also practicing responsible manufacturing, longer lasting products and employee commuter programs. Innovative markets such as the ones Apple products exist in demand high levels of technology and this has become a global trend.
As technology becomes more sophisticated it allows for business to expand international and increase their market share. Although this can be seen as an advantage for Apple, it also offers new challenges as more and more competitors enter the market. What this means for Apple is that no longer to they need to specialize nationally in America, but also right across the world.Their products have to not only be available in multiple languages, but need to appeal to the vast cultures of the world. With all the economic doom and gloom in the world of late, Apple executives are wondering what all the fuss is about. Apple has been one of the very few companies to make it through the recession successfully.
They have the ability to create products that people will buy despite the state of the economy. Apple is a unique company in the way that there is a very prominent amount of consumers that will buy everything that Apple puts on the Market.This type of supporting allows Apple to charge higher prices for their products. In saying this alongside Apple’s consumer loyalty they have created numerous low priced products. The IPod Shuffle is an excellent example, which can be purchased directly from the Apple website for just $49. Obviously in a technology based industry there is a huge emphasis placed on technological advancements. As stated earlier, technology can be related to international business but technologies within Apple’s products are the reason why they continue to leave their competitors in their wake.
The combination of the iPod with iTunes has been a huge success for Apple. On the 1st of September 2010, it was announced that Apple had sold 275 million iPods, making it the biggest selling digital music player of all time. Then when technology was advancing toward touch-screen devices, Apple came out with the iPod touch, iPhone and most recently, the iPad. Apple’s ability to constantly stay one step ahead of its competitors is the driving force behind their success. Five Forces Analysis 1. Threat of New Entrants “Low” a.Getting into the industry will take a large amount of capital that in reality would basically be impossible to come up with.
b. In sales alone the iPhone brought in around thirteen million dollars in sales. Making such large amounts of money allows you to invest back into the company making even better products. c. The reputation that Apple has established also helps put them ahead of other companies. Apple as a company has been around since 1976, twenty-five years in business tends to bring credibility and makes it so customers trust that you will stick around. .
The iPhone has also now been around for about four years this gives them a large advantage in the experience curve of things. Other companies can’t simply jump in and hope to create a product that is comparable to the iPhone. Through those four years Apple has been able to get through and work out many of the start up malfunctions and glitches.
2. Threat of Substitutes “Low” e. People will always want to have a phone with some kind of communication. f. The only potential problem would be if the market began to completely shift toward video chat.Although, Apple would be mostly covered, because they already have face time. Companies like Skype and Oovoo would pose some competition if it did come to face time.
The chances of a shift like this happening anytime soon are really low. g. Another communication that competes with Cell phone industry would be your basic email.
It seems these days most people are texting much more then calling. In that case if someone didn’t want to pay a large sum of money for a cell phone bill they could email for communication. This is no real threat though, because email is more of thing in the past. 3.Threat of Suppliers “Medium to High” h. When it comes to making the actual iPhone there are over fifty suppliers around the world specializing in the parts production. Since there are so many they have very limited power over Apple.
If Apple had any supplier of the parts drop out on them they could simply put a bid out for a new producer of it. Since Apple is such a popular company, many other companies are eager to do business with them. i. The reason the threat is medium to high is because of the actually carriers.
They are supplying the service for the actual functionality of the phone.Especially, a few months ago when AT&T was the sole carrier they held significant power over apple because they were the exclusive carrier. Now with two companies the power has been slightly taken away, yet with the two companies they still have a large say and importance to Apple. j.
Apple also runs the threat of losing their app supplier, but since there are so many producers they are not at a high risk. 4. Threat of Buyers “Low to medium” k. Individuals buy for the most part iPhones. This means that losing one or two buyers at a time would not have any significant threat to the company.
In 2009, Apple sold almost twenty-one million phones. With this many people, the threat of an individual hurting the company is low. l. The reason there is a medium risk is some companies sign contracts with Apple and buy all their workers these phones.
This presents a larger risk because you are dealing with hundreds of people at a time and a large company would have credibility if they were to talk badly on the product. 5. Threat of Rivalry “Medium to high” m. The smart phone has become a very large industry. The biggest competition comes from Android, Blackberry, Symbian, and Palm.Many of these companies have entered into the App world, but don’t have nearly as many as apple. n.
The risk of carrier would have been high a few months ago, but since Apple has now joined Verizon they are no longer such a big threat. Now the main competition will come from the other actual smart phone makers instead of the service carriers. o. Threat of prices and new product innovation are very low with apple for two reasons. First, people are willing to pay for quality and with a smart phone that is exactly what you do.When it comes to innovation Apple is the most innovative company arguably in the world.
Opportunities and Threats Apple May Face in the Future Oppurtunities Over the years, Apple has faced many various opportunities and threats. The company went from nearly going bankrupt to becoming one of the top leaders in the digital world. However, it is the threats and opportunities of the future that are critical to Apple’s success.
Apple has several opportunities that it can take advantage of in the future to help maintain its position as a leader in its industry.Apple has a competitive advantage over all of its competitors in that it has its own store where it not only sells its products, but also offers “Genius” support for all of its various types of technology. Apple uses its outstanding customer service as a way to communicate with its customers and maintain a loyal customer base. This loyal customer base is another opportunity for Apple. The company is able to not only reinvent existing products, but also enter new markets, knowing that it has a solid customer base that will buy their products.Because Apple is in different technological markets including mp3 players, cell phones, and computers, it has the opportunity to expand and dominate over various competitors. In regard to the cell phone industry, Apple’s recent contract allowing Verizon to carry the iPhone is a huge opportunity to increase its market share.
The fast pace of any technological industry allows Apple to keep innovating its products. Threats There are also many threats to Apple’s future. Not addressing these threats poses a danger to Apple’s future.Being in any technology-involved industry can be threatening because there is a lot of competition, and product ideas can be duplicated. Apple’s high priced products can be offered at discounted prices from competitors. Amazon.
com and Walmart. com offer song downloads for a price cheaper than Apple’s (Kim 9). Online radio sites such as Pandora offer music streaming for free. People are not willing to pay as much as $1.
29 for a song when they can listen to it for free somewhere else. In the computer industry, Apple’s main competitors are HP and Dell.Many Windows users are loyal and unwillingly to switch to Apple, which can pose a threat to the company. Its cell phone competitors include Research in Motion and Android.
These companies can easily copy Apple’s features from the iPhone and offer lower prices. Although there are many threats the Apple in the future, there are also several opportunities. If correctly taken advantage of, Apple can greatly benefit from these to maintain a stable position in the market.
Apple must respond to the threats posed to them and come up with solutions to avoid being hurt by their effects. Link between Textbook and CaseFoundations of Strategic Management One example from the Apple case that exemplified what the foundations of strategic management, Unit 1, are all about comes rather quickly into the reading. After nearly going bankrupt of 1996, CEO Steve Jobs “went to work, transforming ‘Apple Computer’ into ‘Apple Inc. ’ with innovative non-PC products starting in the early 2000’s. In fact, by 2010, the company viewed itself as a ‘mobile device company’. ” After already having a clear picture of what his company would be about since its beginning in 1976, Jobs realized that a change was necessary in analyzing who and what they’re company would be about.This emphasizes the key component of the definition of strategic management which states that it is an “ongoing process”.
Strategic management is never stagnant and is always changing to contort to the company’s and shareholder’s needs. And what they needed was a change in where there revenue was coming from. Instead of merely focusing on products pertaining to personal computers, Jobs and Apple branched out to creating an item such as the iPhone, a product that is certainly more related to mobile-devices rather than personal computers.Leading Strategically Another example, this time pertaining to Unit 2, Leading Strategically, stems from Jobs’ “priority to break away from Apple’s tired, tarnished image. Jobs wanted Apple to be a cultural force. ” Developing a vision for a company is what is needed from a leader which is what Jobs set out to do.
He wanted Apple to establish a stranglehold on several levels and markets within the corporate world.Changing the media market through his development of Pixar, the mobile phone market through the innovation of the iPhone, and the computer market from the home computer to the now portable iPad helped push Jobs’ vision of Apple Inc. for decades. Analyzing the External Environment An example for Unit 3, Analyzing the External Environment, comes from Apple’s development of the iPod. As Apple began making breakthroughs with the original iPod and the iPod Nano, they realized the importance of flash memory and to get it cheap, especially for the Nano. Recognizing the importance of flash memory, Apple set out to insure that it got the best prices.
In November 2005, for example, Apple agreed to pay $500 million up-front to Intel and Micron to secure a ‘substantial portion’ of their memory output. Apple subsequently became one the largest purchasers of flash memory in the world. ” Apple realized by analyzing the environment of MP3 players, it was an increasing necessity to have their products hold more memory than their competition.They were able to assess their competition and come up with a strategy to pursue an opportunity, i. e. buying flash memory.
It must have worked seeing how when one thinks of an MP3 player, the main product that comes to mind is an iPod. Analyzing the Firm Lastly, an example for Unit 4, Analyzing the Firm, is that Apple was able to examine its own procedures and products and find out a weakness in their market for a product between a smartphone and a laptop computer; and now we have the iPad. The launch of the iPad in 2010 was yet another bold move by Jobs to redefine a market… He argued that the iPad would be a netbook killer and drive new consumer behavior.
” Apple took a look at its products and realized that there was a niche missing between a model like their iPhone and a laptop. There was still a product that was missing that could bring the two of those devices together. By analyzing its own practices and products, Apple was able to find a market they had not tapped yet and thanks to that, we have the iPad.