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Apple Computer Corporate and Business Strategy
that stresses the quality, performance, and functionality of Apple products, in essence, its differentiating features. Measures such as new user adoption rates need to be continually monitored so that Apple can see if their marketing efforts are succeeding.
Internally, how will Apple be able sustain its ability to change and improve? Strategically, Apple needs to continue to be on the forefront of innovation. This can be accomplished through continual R&D expenditures. New products generate buzz and free publicity and Apple’s core competency rests in its ability to introduce new and exciting ways to enhance its products’ functionality. Internally, the entire company from top to down must be linked with the driving strategy of delivering an enhanced computing experience. Emphasis on differentiating features such as quality, performance, and innovation should drive all processes.
What business processes must Apple excel at? Crucial to achieve its mission, Apple must excel in operational efficiencies. This is directly related to costs and Apple’s premium price tag is undoubtedly the most significant hindrance to widespread adoption. Apple needs to maintain its core competencies in inbound and outbound logistics, but its greatest area of improvement is in its operations.
To succeed financially, Apple has to return equity back to its shareholders. Overcoming negative customer perceptions through marketing, building upon Apple’s rich tradition of product innovation, and improving operational efficiency will drive improved financial performance. Costs will be lowered and net margins will then be buffered.
In summation, Apple has successfully differentiated itself as the only viable alternative to the PC standard. The two major forces that have affected market share loss are the misconception that Apple computers are incompatible with available software for Wintel machines and buying one will result in losses in functionality. This can be overcome with aggressive marketing campaigns in which Apple has demonstrated value added competencies. The second major factor contributing to Apple loss in market share is the unmatched price erosion from the PC market. Apple has failed to narrow the gap because of its operational inefficiencies. If Apple can narrow this price gap and overcome the negative software perception, it will undoubtedly regain market share.
Exhibit 2 PC Industry Ratio Analysis
Exhibit 3 PC Industry Sales & Profit
Exhibit-4 Porter’s Value Chain
Exhibit 5 Industry SWOT Analysis
APPLE SWOT ANALYSIS
Strengths
• Product innovation
• Vertical integration – higher perceived quality.
• Superior OS
• Segment dominance in multimedia and education markets.
• Horizontal integration: PC complements such as the iPod, iBook, etc.
• Ease of use, technical elegance.
• Diversified sales channels: stores + website.
• Increased ISV support
• Lowest inventory and cash conversion cycles
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