APPLE Inc. “THINK DIFFERENT”

MATHIVANAN K.MBA 2014SOURASHTRA COLLEGE,MADURAI

“Change the World through Technology”• On April 1, 1976 - Apple Computer Inc.

STEVE JOBS & STEVE WOZNIAK & RONALD WAYNE (Co- founder)

• Industry: Computer Hardware and Software, Consumer Electronics

• In 1978, Apple – II (color graphics & open architecture). Introduction of a 5 1/4 inch floppy disk drive.

• In 1979, Development of VisiCalc (spreadsheet program).

• In 1980, launched an IPO (record breaking after 1956 IPO of Ford Motor Co.)

Products And FiguresProducts And FiguresHardware – Mac (personal computer series), Hardware – Mac (personal computer series),

Apple Remote Desktop. Apple Remote Desktop.

Software - Mac OS X, Mac OS X Server, Quick Time, i Life, Software - Mac OS X, Mac OS X Server, Quick Time, i Life, i Work, Logic pro, Cinema Display etc.i Work, Logic pro, Cinema Display etc.

Consumer Electronics - i pod, i pod hi-fi, i phone, Apple TV.Consumer Electronics - i pod, i pod hi-fi, i phone, Apple TV.

Employees - 19,787 full-time ; 3,399 temporary Employees - 19,787 full-time ; 3,399 temporary (March 31,2007)(March 31,2007)

Retail stores - 183Retail stores - 183

Porter’s 5 forcesPorter’s 5 forces

EXISTING RIVALRY – EXISTING RIVALRY – VERY HIGHVERY HIGH

Windows OS and media player for playing music and video Windows OS and media player for playing music and video (Microsoft)(Microsoft)

Competition to Mac OS X (Linux)Competition to Mac OS X (Linux)

Alternate sources of computer hardware (Dell, HP, Lenovo)Alternate sources of computer hardware (Dell, HP, Lenovo)

Small stylish MP3 players (Creative, Samsung)Small stylish MP3 players (Creative, Samsung)

Online music stores similar to itunes stores (Napster)Online music stores similar to itunes stores (Napster)

I-phone segment (I-phone segment (Nokia, Samsung , Motorola, HTC)Nokia, Samsung , Motorola, HTC)

THREAT OF NEW ENTRANTS - THREAT OF NEW ENTRANTS - LOWLOW

Streaming audio and video with v-cast (Verizon)Streaming audio and video with v-cast (Verizon)

On-demand online services (similar to i-tunes)On-demand online services (similar to i-tunes)

New entrants with disruptive technology (The New entrants with disruptive technology (The “next Google”)“next Google”)

BARGAINING POWER OF SUPPLIERS - BARGAINING POWER OF SUPPLIERS - MODERATEMODERATE

Suppliers of processors and computer memory Suppliers of processors and computer memory (IBM, Intel) - High(IBM, Intel) - High

Strategic alliance/supplier of Mac (Microsoft)Strategic alliance/supplier of Mac (Microsoft)

Supplier of TV and movies (Disney, ABC, Fox, Supplier of TV and movies (Disney, ABC, Fox, Sony)Sony)

Sources of music (BMG, Sony, Warner, Sources of music (BMG, Sony, Warner, Universal)Universal)

BARGAINING POWER OF CUSTOMERS - BARGAINING POWER OF CUSTOMERS - MODERATEMODERATE

Customers share music using peer-to-peer Customers share music using peer-to-peer networks without paying for music (Ares, Lime networks without paying for music (Ares, Lime wire)wire)

Retailers may pressure for lower prices or better Retailers may pressure for lower prices or better terms (Distributors)terms (Distributors)

Consumers/Businesses may reduce spending on Consumers/Businesses may reduce spending on computers if they fear economic downturns computers if they fear economic downturns (Consumer Attitudes & Behaviors) (Consumer Attitudes & Behaviors)

Consumer Refresh Cycles. But many Loyalists Consumer Refresh Cycles. But many Loyalists (Niche class).(Niche class).

THREAT FROM SUBSTITUTES - THREAT FROM SUBSTITUTES - MODERATEMODERATE

Satellite radio for music (XM, Sirius)Satellite radio for music (XM, Sirius)

Entertainment media and music (XBOX, PS2)Entertainment media and music (XBOX, PS2)

Alternative means to acquire music (Music CDs, Alternative means to acquire music (Music CDs, DVDs)DVDs)

Alternative sources for videos (Cable, Broadcast, Alternative sources for videos (Cable, Broadcast, Theatres)Theatres)

Competitor Environment • High Competition• Share of Dell and HP• Microsoft and Intel-Leaders of Software, ardware• Phone Industry- Sony, Nokia, Samsung

Competitor Environment

• Differentiation Strategy

• Innovation

Core Competencies(In Current Scenario)

Differentiation Strategy

• Unique Features and characteristics• Commands Premium Price• High Customer Service• Superior Quality• Prestige• Rapid Innovation

Sustainable Competitive Advantage

FF

Value Creation Process

Focus On Education

eMac

Adding Value

iMac

Lifestyle Strategy

Digital Hub

Music Strategy (iTunes)

Video Strategy (iMovie)

Internet Strategy (iTools)

Convergence

Apple I,II,III Mac

Sustained Competitive Advantage

Valuable : Innovators

Rare : Strong R & D

Costly to imitate : itunes, Mac OS

Non substitutable : applications, softwares

• Branding • Innovation• Differentiated Product• Superior Quality• Retail Strategy

Strengths

• Less Penetration

• Cannibalization

Weaknesses

Opportunities • High growth potential.• Line Extension.• High Potential music phone market• Strategic Alliances 

Threats • Competition • Substitute Products• Threat of Suppliers

Ansoff Matrix    Existing ProductsExisting Products New ProductsNew Products

ExistingExistingMarketsMarkets Macbooks, iStationMacbooks, iStation Macbook Wheel,Macbook Wheel,

Apple TVApple TV

NewNewMarketsMarkets

        Ipod, iPhoneIpod, iPhone       iTunes iTunes

BCG Matrix STARSTAR

I-PHONEI-PHONEAPPLE MAC BOOKAPPLE MAC BOOKIpodIpod

PROBLEM CHILDPROBLEM CHILD

CASHCOW CASHCOW DOGSDOGS

Apple TVApple TVMac MiniMac Mini

GE Matrix Smart Phone Market- I Smart Phone Market- I PhonePhone

Apple software'sApple software's

Music Player Industry Music Player Industry – I Pod– I Pod

Personal ComputerPersonal Computer- Mac- Mac

High

Medium

Low

Strong Medium Weak

Market Attractiveness

Business Strength

Corporate Level Strategy

Diversification: Iphone, Apple TV

Backward Integration: Manufacturing of Semiconductors

Forward Integration: Retail

Acquisitions

•Emagic in 2002-To acquire knowledge and skills about Music software

•PA Semi in 2008- Mac Hardware acceleration- Backward integration- Skilled Manpower

Strategic Alliances

1. Apple – Disney - To reduce losses of standalone istore

and Disney outlets - To improve the Disney store

“experience”

2. Apple – Microsoft

THANK YOU