Apple Case Study Apple

Apple: Changing the rules of industry, again and again.

Apple’s dominance in innovation & developing the most loved products of the world is unparalleled. The company sparked a computing revolution in 1978 and then again in 1984. PC industry growth was driven by lower prices and new features in early 2000s. But PC industry also saw the emergence of alternative technologies such as smart phones, tablets etc. that changed the attractiveness of PC industry. However, Apple saw these devices as a part of integrated strategy to deliver breakthrough user experiences. Apple currently faces a challenge of continuing its current success and reaching to a new level by sustaining the culture which Steve Jobs left at Apple.

Apple’s recent success has been due to its continued investment in R&D, evolving its products over time & developing a complete eco-system around its products. Apple developed the idea of digital hub and capitalized on it by launch of iPod, iPhone and iPad that set Apple on explosive growth path. Apple’s unique culture of innovation, huge brand equity/customer loyalty & strong leadership gives it a sustained competitive advantage. Application of VRIO framework, (Annex 1), shows that its core competencies are valuable, rare and hard to imitate.

Although Apple is a dominant player, it cannot ignore the external environment in which it operates. Porter 5 forces, (Annex 2) are used to analyze the factors affecting the external environment. Rivalry among existing competitors is high with companies such as Samsung having the capabilities & resources to challenge Apple. Buyers can switch easily to other products without considerable switching cost. Threat of new entrants is moderate owing to large capital requirement. PESTEL ana...

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...f Apple products.

Social - People today are aware of social issues and these issues influence the consumer buying decisions. Apple outsourced most of its production to Foxconn in China. Many Foxconn workers in China committed suicides and Apple was forced to commission a study by fair labor association. Apple will have to face challenge of keeping up to the tasks of cultural aspects emphasis on people safety etc.

Technological – Apple faces the imminent threat of technological innovation from its competitors. Almost every company in the hi-tech industry is striving for disruptive innovation in order to sustain competitive advantage.

Legal – Intense competition in smartphone industry has caused various lawsuits on intellectual property issues. Almost everyone has sued everyone in the industry. Apple has to spend resources in legal costs to fight these lawsuits.