Apple Inc

Assignment # 3

For your company, which of the 3 generic business strategies is used? If differentiation, then how do they differentiate their services/products?

The Apple Corporation uses the differentiation strategy. The differentiation strategy is used by Apple because the type of product and products that Apple produces are different that their competitors. An example in the IPod. An IPod is an example of a MP3 player, but has certain characteristics that make it different than an everyday MP3 player. Apple as a whole uses differentiation in many different ways. The first example as stated earlier is the IPod. Secondly is the IPhone which is similar to other phones of the market, but offers different features that sets it apart from the competitors. Apple also makes laptops that are different that an everyday laptop because of the features once again. I feel that the differentiation method is very productive because people are looking for things that set themselves apart from competition. This is why the Apple Company is so lucrative.

For your industry, estimate how much power each of the 5 forces has (suppliers include their employees and suppliers of technology). How do they reduce the buyer and supplier power? How do they create switching costs and entry barriers?

Buyer Power - Medium

Apple has competitive advantages on their products such as the iPod - iTunes or the Mac and One to One Training. Things that Apple has to try and reduce Buyer Power and increase Supplier Power.

Supplier Power - Medium

*CORRECTED*

Apple, as read in an article on 'How Apple Does It,' Steve Jobs, Apple's CEO, has been always fanatic of high customer experience. Which brings us to the point that Apple has always found ways to reduce supplier power by seeing who makes the next iPod with the highest standards in designs and technology and above all, secrecy. Because of the requests that Apple has, I believe Apple must have medium Supplier Power, Although it tries to keep it low, there will be a small hand-full of manufacturers that assemble the next revolutionary product Apple comes up with.

Threat of Substitute Products or Services - High

There are many products that Apple has that there’s an alternative product for. Nevertheless, Apple has managed to create a competitive advantage into merging the iPod with the music store which is not offered as a whole in the market. Zune HD is a substitute with music store rasphody, but the interface and reputation of the iPod has given Apple that competitive advantage.

Threat of New Entrants - Low

There is a very low possibility for a competitor to enter the market that Apple is in. The entry barriers are the competitive advantages mentioned before as well as the loyalty that the customers have towards Apple.

Rivalry Among Existing Competitors - High

As seen on TV. There are many ads on “I’m a Mac and I’m a PC,” which is informative for new customers to enter the world of Mac and commercials of PC’s such as “You find it, you keep it” campaign to find a laptop PC on a budget. So there is definitely rivalry on each side of the market. It is competitive advantages that keep each other within the industry.

Apple creates switching costs by making all their products user friendly. Even then, it offers programs like One to One training to help customers in their first steps on how to use a Mac. Cutting edge technology in Apple’s devices are switching costs that enable the customer to think twice before purchasing a cheaper media player.With this in mind, Apple has not only created a switching cost but also entry barriers. Since a new competitor will be low likely to provide a customer the services that a present company already offers and does well.

Read Chapter 2. For your company, what major business initiatives are used or being considered? What software is used? Are they top-line or bottom-line initiatives?

Apple uses an E-collaboration style of business initiative, they get everyone involved from each department to work on a product. Their focus is to be innovative so their competitive strategy is differentiation, because of that they are a top- line initiative.

What type of IT organization is used? What philosophical approach do they use.

The philosophical approach they use is knowledge. They have the technology to learn their customers inside and out in order to satisfy the demand of there customers needs. The type of IT that my company uses is e-collaboration.