Draft Apple Case Study

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Subject:
Strategic Management and Decision Making
Case study of
Apple inc in 2010
Submitted by:
CHEMA C. PACIONES
Submitted to:
Dr. Ronaldo A. Poblete, CMITAP, CFMP, CATA, CAEA
Professor
JULY, 2020
Background of the Case
The company started off as “Apple Computer” by Steve Jobs and Steve Wozniak, a pair
of 20-something college dropouts in 1976. Jobs then went to work and transformed
“Apple Computer” into “Apple Inc.” with innovative and technologically sophisticated
non-PC products in 2000’s. By 2010, the company also viewed itself as a “mobile
device company.” Apple became the fourth- largest PC vendor in the US market with an 8%
share by the end of 2009. Its market capitalization went to $220 billion in spring of 2010 through
multi-million dollar marketing campaigns such as the successful “Think Different” ads and catch
slogan. Apple promoted itself as a hip alternative to other computer brands. It also highlighted
its computers as the world “greenest line-up of notebooks”. The goal of Apple is to differentiate
its products amid intense competition in the PC and mobile device industry.
Apple’s strategic management

The success of Apple Inc. has been based on its ability to integrate into its model of business
operation a management that is strategic. Through strategic management diligent involvement,
Apple Inc. has been able to ensure that it is not maneuvered; a strategy that has enabled the
company for the past 3 decades to emerge as successful in the competition. However, believing
that Apple Inc. has not gone through some setbacks would be illogical. In fact, this is one of the
companies that have their good testimony of how the tread of emerging as successful in an
already established market can be challenging. However, Apple Inc. has been able to maintain
a steady pace as it makes effort to continue with the market analysis, which has been enhanced
through having a strategic plan that has been implemented properly, and through capitalizing on
strengths that have been highlighted, the analysis has indentified. In the philosophy simple
terms, the strategic management is perceived to be basically important to every leading
business in any sector of the economy. A model example happens to be presented by Apple
Inc. on how the strategic management incorporation can assist in making a firm to successfully
be able to meet its expectations and objectives (Yoffie and Slind, 2008).
Through the strategic management development, Apple Inc. has benefited in many ways
despite the challenges that have been witnessed in the process. Emerging as an industrial giant
in the modern business is not an easily achievable goal, but will require a strategy in place that
clears the path to success. Internal growth has in one way or the other enhanced the
competitive growth of Apple Inc. and through maintaining an aggressive business tread, its
importance has been realized in the lucrative success that has been enjoyed by Apple Inc
(HBSWK, 2004).
In technology, Apple Inc. has advanced from the initial computer industry to involvement
of the peripherals which has been based on its products and services that have been on a wide
scope. The Apple’s mission highlights a company that is with no doubt in the process of
revolving the technology industry. The short term goals of Apple have not been well defined,
which presents one of the major shortcomings Of Apple Inc’s strategies. Due to its major goal
which has in the past been aimed at ensuring that the customers are provided with the best
personal computers globally, finding other specific objectives has proved difficult to Apple. Of
late, it has been realized that due to the modern emerging competition, Apple Inc. has continued
losing its customers to the alternative companies that are offering their products at a lower
market price, especially in the iPod music; this has strongly been attributed to the increasing
hackers of the code and the piracy. Other challenges facing has been failure to draw a specific
target to a customer group that is focused and failing to take advantage of the customers that
already exist. Product integration failure coupled with the technologies that are available readily
has been another challenge that has continued to establish itself into this company, which has
been critical its success. These problems have however not been very critical to the business.
The inability of Apple Inc. to be comparable to other companies has been based on the fact that
Apple has not been specializing in one product scope , thus providing a more complicated
scope of products. This can be an advantage as well as well as a disadvantage. Looking at
Apple Inc. initial mission, the specification has been based on the computer development. With
a new product development (consider the iPhone), a new mission was redefined, leaving
uncertainty in evaluation of Apples initial goal (Freedman, 1998).
PROBLEM STATEMENT
What should Apple Inc. do, amidst growing competition and challenges, to thrive and maintain
its status as a successful full-fledged digital convergence company?
Areas of consideration
STRENGHT
 Pioneer of innovative and high-tech quality products like iPod, iPhone, iPad and
Mac
 Globally recognized brand name
 Large segment of loyal customer of “Apple culture”
 Strong research and development Department
 Retail stores providing the eye-catching products and experience of Apple’s
Software
 Innovative culture
 High quality and user experience
 Revolutionary products
 Appealing designs
WEAKNESSES
 Lower market share
 Products are expensive compared to Microsoft and other competitors
 Reliance on suppliers for MP, App, and Memory
 iTunes: Low margin
 iPhone: Lacking features
 Less market presence overseas
 Content provider relations
 Technological Limitations
OPPORTUNITIES
 Good relationship through joint venture with other big Companies coupled to
bring out new hits
 Constant growth of PC and mobile industry
 More international expansion
 Increasing demand of online music and other applications like cloud based
services
 Growing market of “Green” and energy efficient products
 Capitalize on iPhone, iPhone, and iPad growth
 iTunes and app store
 Strong growth of mobile advertising market
THREATS
 Competition in technology with other PC industry giants like Dell, HP, Lenovo
and mobile industry giants like Nokia, Motorola and Samsung
 Expensive products as compared to other competitors such as Dell, Nokia,
Microsoft
 High product substitution effect in the innovative and competitive technology
market
 Incompatibility with windows platform
 Imitators
 Rapid technology changes
 New Entrants like Google
 Dying Mp3 market

 Piracy and free content availability
 Highly competitive and saturated market
 The rise of Android OS
Alternative courses of action
The Apple Inc.’s identified markets are: PC market (Macintosh), phone market (iPhone)
and other digital device markets (iPod Touch and iPad).
1. The first alternative course of action is international expansion like looking
into the China and other developing countries.
Pros: China has 616 million mobile subscribers, there are a lot of opportunities and
possibilities that Apple Inc. can do with that population of mobile subscribers.
Cons: International expansion would mean high expenses and costs.
2. One of Apple Inc.’s competitive advantages is its Research and
Development rapid innovation. The second alternative course of action is
based on this competitive advantage. It is to increase its budget allocation
on its R&D.
Pros: With the rapid changes in technology in this contemporary society, it is logical for
Apple Inc. to increase its budget allocation on its R&D. Furthermore, one of the core
strengths of the company is rapid innovation, an increase of budget on its R&D would
ensure that this core strength would still remain as one.
Cons: The Apple Inc. may decrease its budget on one or some of its value chain link
like sales, marketing, and advertising in order to give in to the increase of the budget
allocation on its R&D.
 Capitalize on iPhone, iPad, and iPod growth
Pros: The brand is already strong. It is trusted and widely known
Cons: Expensive development
 Employ on Market expansion and penetration
Pro: Retail store strategy is effective and iTunes worldwide content is already popular
Con: Competition
3. Apple should continue investing more in research and development to
design more innovative products that would satisfy its loyal consumers.
This would sustain the organization’s goals although it would have an
impact on its budget as more finances would be required. It is
recommended that the company adopts the alternative strategies
discussed.
4. To achieve this, Apple Inc has to increase its financing, carry out market
research to determine consumer satisfaction and how the company is
fairing in the market. Apple also needs to undertake an evaluation of the
actual and standard progress of its innovative products as a way of
checking market and product performance.

Action plan
Conclusion
Apple Inc. is a leader in global product innovation. Over the years, the company has
introduced one of a kind technological advancement. However, due to the rapid
changes in technology, some of Apple’s contemporaries are becoming at par with them.
Thus, it is only logical for Apple Inc. to increase its budget allocation on its Research
and Development. Further innovation and improvement of their products will not only
maintain their competitive advantage but it will also boost their market penetration.

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What is the background of Apple Inc.?

What is the background of Apple Inc.?

What are Apple's strategic management practices?

What are Apple's strategic management practices?

Las Piñas Campus

Phone : (02) 8872-7041

Apple’s strategic management

scope of products. This can be an advantage as well as well as a disadvantage. Looking at

uncertainty in evaluation of Apples initial goal (Freedman, 1998).

its status as a successful full-fledged digital convergence company?

 Globally recognized brand name

 Large segment of loyal customer of “Apple culture”

 Strong research and development Department

 Retail stores providing the eye-catching products and experience of Apple’s

 High quality and user experience

 Lower market share

 Products are expensive compared to Microsoft and other competitors

 Reliance on suppliers for MP, App, and Memory

 iTunes: Low margin

 iPhone: Lacking features

 Less market presence overseas

 Content provider relations

bring out new hits

 Constant growth of PC and mobile industry

 More international expansion

 Growing market of “Green” and energy efficient products

 Capitalize on iPhone, iPhone, and iPad growth

 iTunes and app store

 Strong growth of mobile advertising market

and mobile industry giants like Nokia, Motorola and Samsung

 Expensive products as compared to other competitors such as Dell, Nokia,

 High product substitution effect in the innovative and competitive technology

 Incompatibility with windows platform

 Rapid technology changes

 New Entrants like Google

 Dying Mp3 market

 Highly competitive and saturated market

 The rise of Android OS

Alternative courses of action

and other digital device markets (iPod Touch and iPad).

1. The first alternative course of action is international expansion like looking

into the China and other developing countries.

Cons: International expansion would mean high expenses and costs.

2. One of Apple Inc.’s competitive advantages is its Research and

Development rapid innovation. The second alternative course of action is

based on this competitive advantage. It is to increase its budget allocation

ensure that this core strength would still remain as one.

allocation on its R&D.

 Capitalize on iPhone, iPad, and iPod growth

Pros: The brand is already strong. It is trusted and widely known

Cons: Expensive development

 Employ on Market expansion and penetration

3. Apple should continue investing more in research and development to

This would sustain the organization’s goals although it would have an

impact on its budget as more finances would be required. It is

recommended that the company adopts the alternative strategies

research to determine consumer satisfaction and how the company is

fairing in the market. Apple also needs to undertake an evaluation of the

actual and standard progress of its innovative products as a way of