...APPLE’S PROFITABLE BUT ISKY STRATEGY Case Study [Type the author name] CASE STUDY ON PROFITABLE BUT RISKY STRATEGY OF APPLE INTRODUCTION: A long term plan and action that is formulated to help a company to setback and achieve a competitive advantage against its competitor and rival is called competitive strategy. This type of strategy is frequently used in marketing, promotion and advertising operations by somehow questioning the rivalry's service or product. Competitive strategies are vital to businesses which are competing in markets for the leading position, the market which is deeply saturated with substitutes for consumers. (Porter,2008). This case study is truly about the competitive strategy of Apple. Apple was founded in 1976 by two Steve Job and Steve Wozniak. Apple initiated its early reputation by making user friendly personal computers and keeping the price high against those made by the competitors. Their first computer was the Apple Macintosh (MAC). It was launched in 1984. From the very first, Apple’s strategy was innovative and profitable. Innovation brings risk with it. So Apple always followed innovative, risky but a highly profitable strategy. Apple is a front line company in industry of electronics whether in cell phones, tablets, personal computers and music devices etc. Apple’s software is actually the one which is greatly designed and programmed. Apple charge premium and comparatively high price from the consumers when compared with prices...
Words: 2533 - Pages: 11
...Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their own computer – the Apple Macintosh (Mac)...
Words: 2804 - Pages: 12
...Answer – Apple’s Profitable but Risky Strategy Case study Apple’s profitable but risky strategy When Apple’s Chief Executive – Steven Jobs – launched the Apple iPod in 2001 and the iPhone in 2007, he made a significant shift in the company’s strategy from the relatively safe market of innovative, premium-priced computers into the highly competitive markets of consumer electronics. This case explores this profitable but risky strategy. Note that this case explores in 2008 before Nokia had major problems with smartphones – see Case 9.2 and Case 15.1 for this later situation. Early beginnings To understand any company’s strategy, it is helpful to begin by looking back at its roots. Founded in 1976, Apple built its early reputation on innovative personal computers that were par-ticularly easy for customers to use and as a result were priced higher than those of competitors. The inspiration for this strategy came from a visit by the founders of the company – Steven Jobs and Steven Wozniack – to the Palo Alto research laboratories of the Xerox company in 1979. They observed that Xerox had developed an early version of a computer interface screen with the drop-down menus that are widely used today on all personal computers. Most computers in the late 1970s still used complicated technical interfaces for even simple tasks like typing – still called ‘word-processing’ at the time. Jobs and Wozniack took the concept back to Apple and developed their own computer – the Apple Macintosh (Mac)...
Words: 7002 - Pages: 29
...The iPhone Case Write Up Feb. 24, 2013 Main Issues Apple Inc. one of the greatest contributors in IT industry, had many innovations that other companies and products followed for many years without breakthrough. For instances, graphic user interface, “mouse” device for control, large capacity digital mp3 player, online digital music shop, and smartphone with multi-touch screen which use finger for control. It literally changed the world. However, the growth of Apple Inc. almost went into a dead end during the 90s, until Steve Jobs was back. Company’s segmentation, targeting and positioning (STP) and pricing strategy are important issues that partially responsible for its fall and renascence. Since iPhone was so successful in personal cellphone market, should it shift to business market? Historical Strategies At late 70s, when Apple Inc. was founded, personal computers were meanly used in academic institute or industry. It is because of two reasons. First, computers back then require knowledge of “computer language” (programing) to use, and most of people didn’t have the skill. Second, computers were too expensive for personal users to afford. So, when Apple Inc. was founded, its market segment was those academic research institutes, financial institutes, and industrial businesses who require large amount of calculations and able to afford computers. So, Apple was targeting businesses as its main market. Which has been proven a right decision. The market share of Apple’s...
Words: 1492 - Pages: 6
...focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful. History Apple Inc: Apple Inc formerly known as Apple Computer Inc which provides corporate Server, MAC OS Systems and Operating System. Apples core product lines are the iPhone, iPod and Macintosh System. Steve Jobs and Steve Wozaniak, The founder of Apple has created the Apple Computer on 1st April 1976 and integrated in the company on 3rd January 1977, in Cupertino California. It has driven the Computer manufacturing market for more than two decades. Mr. Steve Jobs who was expelled in 1985 was return as CEO of the APPLE Inc in 1996 with new Ideas and corporate philosophy. With introduction of successful IPod Player in to 2001 Apple has again proved itself as a Market leader in consumer electronics. Latest era of extraordinary success of the company is in iOS based Apple products like I Phone, IPod slim, I Pad and now I Pad 2. Now a day’s Apple is a biggest technology corporation in the planet with the profits of more than $65 billion. It has about 49,400 employs all over the world. Fortune Magazine most Admired company in United State in 2008 and in the world in 2008, 2009 and 2010. Apple has over 240 Store all over the world...
Words: 4221 - Pages: 17
...Management of Apple Inc. GB520 Strategic Human Resources Management Professor Andrew Klein May 7, 2013 Strategic Management “Strategic management refers to the art of planning your business at the highest possible level” (What is strategic, 2011). A great example of strategic management is the story of Apple, Inc., formally known as Apple Computers. This story is innovative, includes traditional business strategies, an amazing record in leading change and unplanned successes. Steve Jobs, one of Apple’s founders, made the companies mission to be, “to bring an easy-to-use computer to the market” (Yoffie, 2008). When Apple went public in late 1980 the company immediately took on a new objective – to make the stockholders money. The company had several entrusted members that had different managerial strategies that were used to accomplish the objectives. Since the company was founded it has maintained a strategy of continuous innovation in product and application development. In the beginning Apple’s products were easy to use, revolutionary and profitable; however they struggled due to the lack of alliances with other industries. In the early 90’s Apple began reaching out to other industries to establish alliances and that proved to be a strategic move in order to ensure Apple achieved the company’s original mission as well as meet the stockholders demand of making money. Apple’s Leadership Steve Jobs along side of Steve Wozniak founded Apple Computers when...
Words: 1045 - Pages: 5
...as that primary. Technologies getting adopted and widely accepted in a society can have a massive affect on multiple aspects off that society. Allowing “the market” to make those decisions is a very risky idea. Plato, in his earlier life spoke of this exact predicament. In his work “The Laws” Plato stated that a well-regulated state should scrutinize innovations before permitting their introduction. David Nye that as a society, we need to be cautiously optimistic in our adoption of new technologies. One problem David Nye discuses in regards to allowing the market to choose our technologies is that companies are able to abuse their power with patents and dominate the market. The companies would obtain patents for new technologies and after purchasing these patents, just sit on them and not continue progress of creating it. The companies would engage in these acts to create a hold on possibly their own...
Words: 648 - Pages: 3
...Summary - If you Build it, will they come?? Innovation and new Ideas are valuable and change the prospective of any Industry however before jumping to conclusion it is important to know the market and analyze if there is market and if the space if profitable enough. As explained in book, most of the startups fails because they do not test market early on and concentrate on product and idea than the feasibility of it. To succeed the same, the author defines a process “Ready, Aim and Fire”. I will an example of consulting company who works with two financial angles first is to work with entrepreneurs and incubator companies with a percentage of share and second to work with middle sized companies with direct money transactions. READY First is to understand the market on multiple fronts including size, growth rate, emerging trends, competitors and expert viewpoints. All these factor are essential in understanding the concept and underlying idea. As stated by Steven Johnson in “Where good idea come from”, “The trick to having good ideas is not to sit around in glorious isolation and try to think big thoughts. The trick is to get more parts on the table.” To bring new part you don’t only need to understand what is already on the table and what competitors are doing to bring something new. Example: The more players an industry has more consumer friendly it becomes. It not only give power to customers but it forces organizations to distinguish themselves. To improve the customer...
Words: 717 - Pages: 3
...RADIOHEAD’S “IN RAINBOWS” RELEASE STRATEGY Radiohead is releasing their new album “In Rainbows” in an unusual way: The band manufactured, distributed and promoted their music without a record label; they allowed the customer to “price” the digital album by themselves and sold a deluxe CD set version at $80. In order to evaluate the extent to which this strategy may influence on record companies and on the entire record industry, we need to estimate its impacts on the artists and the music audiences. While Radiohead’s release plan may have some certain influences on record labels, those impacts are not big enough to be considered a threat to the record industry. Impacts on artists: Some record companies may worry that Radiohead’s strategy would encourage more artists to self-publish and self-promote their album as it may help artists earn more profit margins, which would render record labels obsolete. However, this claim is not necessarily true and it might be a risk for artists to follow Radiohead’s strategy. As Radiohead let people decide on their album’s price, there are risks that many people will not pay anything for the digital downloads. The estimated ratio of 20 illegal downloads for very track sold suggests that majority of people are unwilling to pay for music downloads. Thus it is unlikely that Radiohead’s earnings from digital downloads would offset the band’s costs. Radiohead also tried to make profit by offering a deluxe box set at a costly price. Though the...
Words: 951 - Pages: 4
...In this task, I am going to be describing and comparing how marketing techniques are used to market products in two organisations. The first organisation I will be talking about is Apple, and the second being Coca Cola. Marketing means that a business will identify the needs of the consumer and produce products that meet the requirements of them. In order for a business to perform and succeed, it needs to make sure that their customers are at the heart of operations. Should businesses do this, it would mean that they are market-orientated. As well as this, there are other forms of orientation for business. These include; * The production concept * The sales concept When a business uses a marketing concept, and putting customers at the heart of decisions. By doing this, a business operates more efficiently by prioritising investments on product development for the customers. Objectives In order for a business to grow and succeed, it is essential that it has its objectives outlined. The first aim a business will have when it starts out, is to survive. Once this goal has been achieved, it means that they can now focus on growth objectives, which means that they can focus on increasing market share and increasing profits. When businesses set objectives, they follow SMART guidelines. SMART stands for; * Specific – The objective must be clear and concise * Measureable – Objectives must be able to assess properly * Achievable – The objective needs to be reasonable...
Words: 3312 - Pages: 14
...Since the terrorist attack on the World Trade Center and the Pentagon on September 11, 2011, CEOs (Chief Executive Officers) have had to play important roles in the international commerce, because of the global economy recession, which was caused by the massive political uncertainty (Garten, 2008). Hambrick and Mason (1984) have also stated that because leaders of corporations are empowered to make a decision, they have an important impact on team characters and outcomes. The importance of leadership is definitely obvious. However, different approaches to leadership can lead to totally converse results. Authoritarian and laissez faire are two typical styles. The former means individuals control over all decisions with little input from group members, it is dominant and self-reliant. Conversely, the latter depends on teamwork, and be more democratic. This essay will firstly compare these two approaches to leadership in successful multinational companies in various aspects and then illustrate the benefits and drawbacks of each one respectively. Finally, it will analyse and evaluate the appropriate applications in terms of creating sustainable success, which includes steady period management and crisis management. What should to be emphasized is that it is unfair to define one leader as an exact example of an authoritarian leader or a laissez faire leader, thus, in this essay, I only classify leaders by the some characters they showed. The differences of these two modes are...
Words: 1510 - Pages: 7
...Assignment 3 1. Design a multifactor model with at least 2 factors besides the market factor, and answer the following questions. a) What makes your choice of factor a “factor” in multifactor model? b) Does the factor of your choice co-move with the market factor? If yes, should you include it along with the market factor? c) Describe how the stock return would be affected when the factor of your choice changes. d) Describe a scenario where one can benefit from trading on the factor of your choice. a) There is a variety of factors that can determine the returns on security. The market based factor is the return on the broad market index such as S&P 500. This market return is one of the factors in the model. Other factors include the following: • GDP growth rate. This factors shows overall macroeconomic conditions that tend to affect a stock’s performance. • Risk free rate of return. • 10 year T-bond interest rate that shows the required return on 10-year government bonds. • A company’s ROE as an indicator of its profitability. Therefore, the model will look like this: [pic], where betas show the sensitivity of return to the factor, rm is the market rate of return, rf is the risk-free rate, T-bond is the 10-year T-Bond rate and ROE is the return on equity (ROE). Generally, GDP has a positive effect on a stock return. Higher economic growth leads to more business opportunities...
Words: 2090 - Pages: 9
...APPLE INC. TABLE OF CONTENT INTRODUCTION… …………………………………………………………... 1 METHODOLOGY……………………………………………………………… 1 COMPETITION……….……………………………………………………….. 2 PORTER’S 5 FORCES……………………………………………………. 2 ANSOFF’S METRIX……………………………………………………… 2 SWOT AND PASTE ANALYSIS……………………………………………… 3 CONCLUSION ………………………………………………………………….. 4 RECOMMENDATION………………………………………………………… 5 APPENDICES ……………………………………………………………………… 6 REFERENCE LIST ……………………………………………………………… 7 1. Introduction Apple Inc. is an America multinational cooperation that produces software and electronics like phones, computers and tablets. According to Steve Jobs (CEO) perspective, he wanted a unique and effective insight about how people wanted to interact with technology. Steve Job believes in the ideology of Henry Ford who once said. “If I had asked people what they wanted, they will say faster horses.” Further illustrating the ideology that customer’s main problem is thinking on what they know instead on what is possible. So Job and his colleagues thought about customer experience more deeply than the customers could. According to Steve Job, Apple’s mission statement is to contribute to the world by making tools for the mind that advance humankind, through the innovation of PC and mobile devices. Thus, this vision statement is satisfactory and suited to the condition of apple. However...
Words: 1901 - Pages: 8
...Marketing Techniques Describe the marketing concepts used by Apple and Tesco. Marketing definitions: • Marketing is the social process by which individual’s and groups obtain what they need and want through creating and exchanging products and value with others (Kotler) • Marketing is the management process that identifies, anticipates and satisfies customer requirements profitability ( The chartered institute of marketing ) • The right product, in the right place, at the right time, at the right price (Adcock et al). Marketing Orientation: Product concept- This is when a company or an organisation for e.g. Apple improve there product such as the iPhone by adding new features to it so it’s better than the last phone. This is because it maintains the interest of existing customers and also attracts new customers. Selling concept- This is when a company or an organisation persuades customers into buying products through aggressive selling for e.g. putting on special offers. Production concept- This is when a company or an organisation sell on selling the product as cheap as possible. This is because it attracts more customers and by selling the product cheap as possible they use cheap materials to increase profit margins. Marketing concept- This is when a company or an organisation focuses on the customers where the business looks at all aspects of the business to insure that it has the customers at the heart of all its decisions making...
Words: 3146 - Pages: 13
...Strategic Management Apple & Nokia Case Analysis 1. Table of Contents 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE 2 2.0 QUESTION 1 3 2.1 Competitive analysis of Apple and Nokia – who is stronger? 3 2.1.1 Competitive Analysis 3 2.1.1.1 SWOT Analysis 5 1.1.1 Strengths of Apple 6 2.1.1.2 Value Chain Analysis 9 2.1.1.3 Resourced Base View Tool 11 3.0 QUESTION 2 14 3.1 PESTEL analysis tool 15 3.2 Porter’s Five Forces 17 3.3 The Implications for Strategic Development are; 21 4.0 QUESTION 3 21 4.1 Critical Analysis Lessons from Apple’s risky but profitable strategy 21 5.0 REFERENCE: 23 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE Apple chalked some initial success with its invention of the Macintosh (Mac) computer but with the introduction of the Windows 1.0 from its rival company (Microsoft), it was faced with a threat in the industry. Their earlier strategic decision of not cooperating with rivals in the industry was seen as a weakness which Microsoft capitalized on to make their software available to other computer manufacturers for a license fee. Apple, diversifying into a new market (mobile telephone industry) with the introduction of user friendly products sought industry cooperation when it came to the launch of subsequent products including the iPod and iPhone. This strategic decision was inspired by its past...
Words: 6149 - Pages: 25
