Course: Strategy and Innovation

Mini Case Study: Apple

1. Explain Apple’s success over the last decade. Think about which
industries it has disrupted and how. Also look at Apple’s main
competitors.

Over the last decade, Apple has contributed huge success in many industries.
First of all, Apple created a whole new division in the personal computer
marker, called Mac. With the concise and clean design of the product and
new operating system, Apple attracted huge amount of loyal customers.
During the last three years, the most laptop brand that all the university
students use is Apple. Also, according to the LAPTOP, through 2011 to 2016,
Apple has remained their top brand for the seventh year in a row (Editors,
2016). The personal computer market, once dominated by Microsoft, now has
been taken a larger and larger slice by Apple.

Secondly, the success of iPod and iTunes dominated the portable music
player market. IPod with beautiful design, diverse product types and easy to
use operation, differentiate themselves from all the other products. All the
different color that iPod have, also the different sizes and function of the
product, iPod covers almost every market division in portable music player
market. More than that, before iPod and iTunes was released, no company
really could integrate the music player, the computer, and the software and
connected them (LePage, 2006), even the companies like SONY and
Creative Labs Nomad. In addition, many auto companies also have
corporation with Apple, letting iPod to be played in the cars. Also, with the
trend of healthy life, people start exercising more and more often. Apple sees
the opportunities and provides products that suitable for using during the
exercises, which lead their success to even far away.
Last but not the least, the introduction of iPhone, which blow up the
smartphone market. Among all the Android phones, Apple developed a whole
new operating system iOS, which brings revolutionary changes in smartphone
market. It is fairly simple and easy to use with very friendly user interface and
convenient apps. Also, it has the unbeatable operating speed over the
Android phones. In addition to that, Apple is good at chaining their products
together. The iOS system is the base of the Apple watch, Apple TV, Apple
pay and possibly all the other future Apple products, which makes the users
of the other products want to have the iPhone to support or improve the other
products.

To sum up, Apple is good at differentiate themselves with the other

competitors in the market in order to get the uniqueness and attract those
customers who wants to be different. Also, their design and always
developing the new ways to do things also is admired and contributes to their
success.
2. Is Apple’s success attributable to industry effects or firm effects, or a
combination of both? Explain.

I think Apple’s success is a combination of industry effects and firm effects.

As digital products become more and more common in our daily lives, all
related industries like computers and tablets, smartphone, cameras, audio,
wearable technology and even games and visual reality are growing
increasingly faster. Companies like Apple, which covers most industries
mentioned, definitely got help from the industry effects. However, other than
industry effects, firm effects are also very important to Apple’s success, since
Apple really did good job on standing out from the other companies in the
same industry. Apple is unique, special and creative. Among those industries,
Apple has a lot and strong competitors, such as Sony, Dell, HP, Nokia and
Blackberry, but it still got its success with clear positioning, creative products
design, and innovative products.

3. What are the greatest challenges Apple is facing? Detail them by

internal weaknesses and external threats. How can Apple transform
internal weaknesses into strengths and external threats into
opportunities?
The greatest challenges Apple is facing is the increasingly strong competition
and rapidly changing industry environment. The technology can always bring
possibilities. Apple is facing the challenge with internal weaknesses and
external threats. For external threats, like the article mentioned, Apple’s
competitors are trying hard to neutralize Apple’s competitive advantages.
Microsoft, as introducing the Surface, which is a combination of laptop and
tablet, is already threatening iPad in a serious way. In Chinese smartphone
market, new brands like XiaoMi (Little Rice) and Huawei, are taking Apple’s
market share in China rapidly. For internal weakness, the integration of
products brought Apple success, but it may also drug Apple down because of
 its unable to work with the other devices. Since Apple products are so unique,
their cable, software, and hardware are all different than the others, whenever
there is a new product, they need to create a version in order to be
compatible to Apple products. However, in this way, Apple will always be
catching up with new products or technology, unless they invent it. In addition
to that, the other companies will still try to make Apple undifferentiated, so
once Apple cannot catch up with the new technology or loses its uniqueness,
Apple will lose its competitive advantage, which will be the greatest challenge
that Apple is facing.
Relatively, those threating and weakness would also be opportunities and
strengths. If Apple could keep inventing the new revolutionary products and
technology or become the first implement of the new technology to keep its
uniqueness, Apple will be able to reverse all the threats and weaknesses
mentioned above to its competitive advantage, which make its competitors
harder to catch up with.

4. Apply the three-step process for developing a good strategy outlined

above (diagnose the competitive challenge, derive a guiding policy, and
implement a set of coherent actions) to Apple’s situation today. Which
recommendations would you have for Apple to outperform its
competitors in the future? Be specific.
With the current strategy that Apple has, I would recommend Apple to spend
more on its innovation and R&D apartment. Like I mentioned, if Apple want to
keep its competitive advantage, it must try to keep its uniqueness. So rather
than catching up with others and make them compatible with our products,
Apple should try to become the first implement of every new product and
create its own system with broadest and most complete product cycle, so that
its competitors can never break into that cycle.