Apple Inc. Case 2010

1. What, historically, perk up been apples competitive advantages? orchard apple tree has had discordant competitive advantages since its origin until the present. Firstly, orchard apple trees innovation has invariably been its hallmark. runner with the origin Apple I money box the iPad 2, Apple products take for change the development of the market many times, specially during the last decade, with the first iPods lunch. Although Apples single technologies have not been walk by dint of with(predicate)s created by the company itself, it has developed the characteristics of these technologies and combined them in a way that had neer been done before.One of Apples main ways to innovate is through the ease of use of its products, another of its grown competitive advantages. Apples products ar popularly considered as very intuitive and, although MP3 players already existed in 2001 or multi-touch surfaces in 2007, products like the iPod and iPhone al dispirited gear the use o f these technologies and devices in a very practical way with an almost vertical learning curve. in like manner this ease-to-use, Apple has plug & play oriented designs devices ready to be utilise with a series of peripherals without requiring prior association.This has led Mac computers to be digital hubs of the new digital devices. Moreover, Apple has always had a proprietary design. Apple has never licensed any of its products or designs (except during Spindlers management). This means that it has always had a liberal control over its value chain, from the designs from scratch of their computers, till the softw ar and its marketing or sales. It has a widely vertical compound business and nowadays, it is even beginning to design its own microchips. This has led to a very unique specialty that can be hardly erect in competitors products.That is why one of Apples most exemplary characteristics atomic number 18 its products elegant and state-of-the-art industrial designs and superior software (OS). totally components of its products are perfectly integrated and work altogether better than separated. Apples design process consists of a series of activities that can be hardly copied. Finally, it is very important to highlight Apples bell ringer image and the whole culture created around it. As Jobs says, Apple products are intended to be a cultural force.Apple delivers through its products perfect(a) solutions and experiences, different to the use of any other companys products. Its devices are considered as iconic within their correspondent markets and the company is seen as a leader of the digital age. Apple has always had a consentaneous base of loyal customers and its commemorate is presently one of the best know in the world. Furthermore, Steve Jobs CEO is considered as an innovation guru and has been named CEO of the decade, boosting Apples popularity even higher, if possible. 2. Analyze the personal computer industry.Are the dynamics favor su fficient or problematic for Apple? The personal computer industry is a passing concentrated market. The four top PC vendors (Acer, Dell, HP and Lenovo) control the 55% of worldwide shipments. It is a competition intense field given the low transposition costs of the industry. Growth has been driven by a come down of prices and expansion of capabilities, with consequently higher sales volumes, but with a relatively smaller growth in revenues. PC components are going through a standardization process and PC makers are cutting expenditures in R&D.Due to the aforementioned low switching costs and the low differentiation among vendors, the threat of substitute products is very high in the industry. However, despite the low product differentiation, vendors have built strong brands and the investments required to enter the sector are very high, for what the entrance of new competitors with similar volume and brand awareness as the present top vendors is quite unlikely. The only easy way for competitors bets to be the white-box market (with around 30% of sales in 2009), but these machines cover only the desktop market.Regarding the clients power, they have a wide range of very similar products in design, capabilities and price to choose from, for what the switching costs are very low, as mentioned. PC vendors customers are wherefore in a strong position to lug them in the in demand(p) direction. On the other hand, PC makers have also high negociate power in their relationships with their suppliers, as PC components are widely operable at very competitive prices (excluding microprocessors and operating systems).As for Apple, the sectors dynamics involve both favorable and problematic characteristics. The still hegemonic wintel systems make Apples products a strong and very differentiated alternative. Moreover, home consumers are the biggest segment in the industry, a group that values design, mobility and connectivity, some features in which Apple is a lead er. On the other hand, the company may have an overall minor base of potential clients willing to acquire the knowledge to operate its devices.Despite the fall in prices and increase in capabilities that the market requests, something that could seem problematic to any player in the sector, Apple is still able to charge premium prices through design and user experience differentiation, without requiring to push its devices capabilities over the average. All of this means that Apple can make big profits in its premium niche market, but that overall brainwave might be a setback. Nevertheless, Apple is still reliant on its components suppliers, who force Apple to purchase major volumes in order to slip by competitive costs.