Apple Inc Introduction Apple Inc., founded by Steve Jobs and Stephen Wozniak in 1976, began its way in computer business Apple has expanded into a complex company that specializes in much more than just the computer industry There are narrow industries within the broad industry of high technology Online content industry (iTunes, App store and Apple TV) Its marketing share is in the legal download market Music player industry (iPod) It is a great invention for music lovers The iPod has products; the iPod shuffle, iPod classic, iPod Nano, and iPod touch Telecommunication industry (iPhone) The iPhone combines concepts: 1) Smartphone 2) Wide screen for multiple uses 3) Internet communication device Tablet industry (iPad) The iPad is a mobile computing and productivity device Apple aims to maintain good relationship with suppliers and stay ahead of their competitors by using good marketing plans and strategies to enter into a global market with their state-of-the-art products that are widely popular globally Analyzing the external environment The general environment Demographic Nowadays, in most countries in different regions, people of different education levels, ages, and purchasing powers are all awake to new technologies Technology has played an important role in human lives Actually, in developing and developed countries, technological products and services are frequently accessed by people of younger ages, with higher education level, and with medium to high purchasing power Economic The U.S economic recession from 2007 to 2010 has negatively affected many corporations, industries and nations The sale volumes of many firms had decreased dramatically The earthquake in north Japan in 2011 was also another negative effect to the world economy Many firms in Japan had to postpone delivery dates of their products to their customers Socio-cultural People intend to use more portable and easy-to-use technology products and online services in all cultures and societies, especially in America Lifestyles of people are rapidly changing to use online services to buy products instead of visiting the actual stores Different societies have different trends in using technology products and services Political-legal High competition in technology industry forced almost all firms to have an intellectual property rights over their products to protect their capabilities over the competitors The firms and industries have to develop a political strategy to influence government policies and actions to help protecting and assisting them Global America, Europe, The Middle East, Africa and Asia are the continents that have high potentials to consume technology products and services America is the biggest market with big population of high-income level Technology Nowadays technology has become an inevitable part of our life, internet and wireless communication devices have played more important role in our daily lives Music and movie contents can be purchased and downloaded from the internet legally much more easily than they have ever been Technological changes affect many parts of societies The new high technology devices are continually being released to the market, thus every company has to develop their products and services to satisfy consumer needs Conclusions This is a mix of opportunities and threats for Apple Technology can broaden and reach to everyone anywhere in the world, and that creates significant opportunities for Apple to expand its market The products and legal content services of Apple are suitable for customers in all societies and cultures Technology continues to improve quickly in the near future and that can become threats to Apple Recessed economy could also be another threat for Apple Industry Analysis A big success of Apple Company with high net sales, uniquely designed product motivates many competitors to imitate Apple has to come up with good plans and strategies to protect and maintain their market share There are many business models but analyzing in the Porter five forces model for Apple Inc Online content industry Barriers to enter are high due to intellectual property over the contents from all publishers Substitutes include hard copies of music, movies, magazines, and books can be found everywhere in any stores but at the higher prices Rivalry is high because this is a new industry with the fast growth rate in less than 10 years This is a big market that requires only small amount of capital investment Bargaining power of suppliers is low due to a small number of suppliers in this industry; the suppliers include record labels for music, third-party software developers for application, major studios for movies, and publishers for magazines and books Each of the suppliers normally has its own distribution channels High bargaining power of buyers according to low switching cost to substitute products Fast growth rate of this industry has made it very attractive However, the products and services still has to have legal content and it has to compete with many substitute products Music player industry Barriers to enter are low according to the low technology use in this type product The products are also very easy to be produced or imitated Substitutes are portable MP3 players These substitutes present a high treat because they can be found everywhere Rivalry is moderate because there are not many players in this industry This industry seems to be growing slowly in the future Bargaining power of suppliers is high because only a few players are in a big market High bargaining power of buyers: customers use products for multiple purposes therefore the manufacturers have to add more features to match customers’ needs This is an attractive industry because the market is big and rivalry is also low However, customers still need more varieties in their products to fit with their needs Telecommunication industry Barriers to enter are extremely high Many mobile phone firms have variety models and designs for consumers The new companies need to compete rigorously to gain market shares in this industry No substitute products in this industry Rivalry is fierce due to a large amount of contenders struggling for market share Bargaining power of suppliers is low due to a large amount of contenders Bargaining power of buyers is high according to the varieties of mobile phones available in the market These mobile phone companies have to cut down their price in order to compete with each other This is a huge industry with many players It is not attractive because the high barriers to enter and the high bargaining power of buyers make it difficult to earn good profit Tablet industry Barrier to entry is not high because not many players and similar types of products are offer to customers Substitutes include portable and mobile computer with similar functions and features but are a bit bigger in terms of size Rivalry is low It isn’t a new industry as it has existed for more than 20 years This is a very small industry but it tends to grow fast in the near future Bargaining power of suppliers is high because they have only few competitors and firms that produce this type of product Bargaining power of buyers is also low due to a small size of this industry, and only a few competitors This is a very interesting industry with only few players at the moment but the size of market tend to grow very fast Competitor Analysis Online content industry competitor This is a new industry with a large number of competitors such as Napster, Kazaa, Amazon, and Netflix; however all are very similar in terms of content, copyrights and use the content from the same resources All of them offer music and movies mainly Distribution channels are only on the internet that is very easy to access Music player industry competitor This is a small industry with a few competitors such as Zune HD, SanDisk Sansa Clip, and Sony X-Series Walkman Substitute products exist in this industry but no similar products found The main products of this industry are portable Mp3 music player Telecommunication industry competitor This is a huge industry with a lot of competitors All have been long-time leaders in this industry Google, RIM, and Apple are the main competitors in this arena The main products of this industry are mobile phones Tablet industry competitor This is a very small industry with a few of competitor It has existed for more than 20 years but is not very popular yet Motorola Zoom and Samsung’s Galaxy Tab are in the same league in this competition The main products of this industry are mobile computing devices Analysis the internal environment Tangible resources Its excellent financial resources, together with high sales volumes in all of its products, make Apple become a very wealthy company and also became the World’s Most Admired Company overall Apple Inc has excellent technological resources to produce and invent its own hardwares and softwares with unique designs that differentiate itself from competitors, hence giving the firm advantages in this technology industry The physical resources are good but limited in some region; only a small numbers of the retail stores outside the US All outsourced component manufactures in each region were nearly Its organization resources are excellent and the company is able to organize a numbers of supply chains with good relationship and arrange deals that guarantee supplies and pricing Intangible resources There are many excellent intangible resources for Apple and most of them come from the unique variations of the company The brand is outstanding with good reputation all over the world; the perception of goods and services are excellent It has excellent human resources, the company hires the best and most talented people in their disciplines and the highly skilled specialists The innovation of the products and services are outstanding as Apple Inc understands the needs of their customers and provide them with unique and variety products The company has good reputation among the suppliers and the customers Apple Inc is able to maintain good relationship and stay ahead of the competitors Value Chain Analysis The chain for Apple is presented below: Inbound logistics and operation were outsourced mostly from Asian countries One type of component was outsourced from three different countries to avoid some disruption problems in case of natural disasters Marketing and sales start with good designs of the products Apple heavily promoted its products by creating memorable and attractive advertising Apple operates many of its own retail stores around the world to provide both good quality products and services to customers Services are offered by Apple’s specialists to answer technical questions and provide troubleshooting solutions to its customers Apple buys a legal content from many suppliers and resells it to its customers at low price Capabilities and core competencies Apple has an outstanding set of capabilities with many performs at the level of core competencies Is the resource Is the resource Is the resource Is the resource Ability to or capability or capability or capability or capability non valuable? rare? costly to substitutable? Deal and control with many major Y N Y N studios and publishers Control the quality of products with their supplier while maintaining a Y N Y N good relationship Provided a legal online music store Have an outstanding innovation Y N N N style and ease of use of the products Y Y Y Y and services Have their own brand retail stores in Y Y Y Y many region around the world Be big innovator in all industries Y Y Y Y imitate? and maintain a competitive advantage over other players in high rivalry market Create customer loyalty Expand their products to many Y Y N N Y N N N different cultures and societies Maintain the sale volume during Y N Y Y 10 recession period Design and visualize innovative products with different and unique Y Y Y Y 11 from others Maintain their top position in highly Y Y Y N 12 rivalry industries Have a quick growth in the global Y Y Y Y 13 smart-phone market Have good media contents for their Y Y Y N 14 products Leading the tablet market in both Y Y Y N quality and price There are a range of the capabilities set out of above are core competencies for Apple, specifically number 4,5,6,10, and 12 Apple is a very successful company in those industries because of these core-competencies Apple has products with outstanding innovation styles which are easy to use It has quick growth rate especially in the smart phone market (number 4, 10, 12) These are major strengths and core successes of AppleApple was the first in the industry to reinvent smartphones with many new features and user interface, leading to high volume in sales in a very short period of time It has its own brand retail stores around the world (number 5) Apple is the only computer company which has its own retail stores in many countries around the world This retail store outlets provide great opportunities for Apple to gain access to and interact with its customers directly Apple maintains competitive advantages over other players in high rivalry market (number 6) It always moves ahead of its competitors and Apple was the first mover in the market, making it hard for other players to follow or imitate Weaknesses Apple is a company that has numerous core competencies However, it still has a few weaknesses According to high market share in this industry, they have to use focus differentiation as their business-level strategies that cause high price on products and became their biggest weakness Technology products always have short product life cycle because switching in technology is very fast The top management of Apple has changed in high frequency in the last few years, and this has affected different innovations and strategies Current strategies Apple is using focused differentiation as its business-level strategy to enhance competitiveness and profitability This has been achieved through designing and production of unique products and services, unlike other firms which focus more in lowering production cost and lowering products’ pricing to gain competitiveness and profitability They invest in learning about the needs of customers and perfectly design products and services to match with those needs The targeted customers are people who are willing to pay more for products with better user experiences and people who like to have fun with technology Online content industry Offering legal online content for music, movies, and applications while having an agreement with many major alliances Music player industry Offering a wide range of sizes, colors and variety of features to fit different need of the customers Offering new features to its players to set them apart from the competitors Telecommunication industry To create innovative features to make the product more powerful, easy to use and more appeal to users Tablet industry Leading the tablet industry with quality and low price but its usual products always at premium priced Future strategies At the business-level they must continue to use focused differentiation, as it had been success by this strategy Differentiation and uniqueness is its core competencies that made them drive and growth very fast in those industries The company has to continue create innovation products and services in order to expand to more countries over the world, Apple’s retail stores also have to continue to open in Asia and Europe where only a few Apple stores there Then expand to the market that they have never been to such as Brazil and Africa Due to high financial potential of Apple, the firm can easily access to buy new technology from other companies instate of develop and invent by its own and invent new categories of products in other industry but still with in the field of technology Apple’s strategy for the future must be build planning on the success of iPhone and iPad Online content industry Expand services to cover most of the region in the world However, Apple also has to deal with local major alliances in each country to be able to provide the content that suitable for customers in the region Pricing is very sensitive in this industry so, Apple should maintain its low price to avoid substitute services Music player industry Maintaining good design and verity of products suitable with different need of customers Continue to add new feature and invent more accessories to use with their products and fit to different purposes of customers Telecommunication industry Apple has to continue using alliance strategy and create good relationship with service providers in each region Maintaining good relationship with third-party software developers in order to have more applications to suit the need of broad target Tablet industry Continue to utilize their own services and maintain functionality of iPad to differentiate from competitors Adding more additional contents by alliances with more third-party software developers Conclusion According to above future strategies, Apple should maintain good and unique design of products and services with new innovation and also innovate services that has long products life cycle to overcome their product’s weakness Apple has to tapping the economic of scale by having a long-term supply contact help to lower the cost of the products and services Every successful Apple product has had a design that notably distinguishes they from competitors, and in most cases, the Apple product has re-defined its market Leadership Issue Apple was faced with an additional challenge when Steve Jobs left the company for medical leave of absences for many times during the past few years and hand over the control of the company to Timothy D Cook the chief operating officer Finally he was officially retired and passes his role to Timothy D Cook However, many people were considering if Apple could still be success in these industries, would Apple use the same strategies to carry out their success? It will be a big challenge for Apple and Timothy D Cook to maintain their core competencies that was the key to accomplish of Apple in the past 10 ... of component was outsourced from three different countries to avoid some disruption problems in case of natural disasters Marketing and sales start with good designs of the products Apple heavily... successful Apple product has had a design that notably distinguishes they from competitors, and in most cases, the Apple product has re-defined its market Leadership Issue Apple was faced with an additional