Apple Analysis Week 8

Apple Analysis Week 8

Executive Summary

For the week 8 individual assignment we will be examining the Apple case from Baltzan, Chapter 1. This analysis will review various common tools used to analyze competitive intelligence such as Porter's Five Forces Model, the three generic strategies for choosing a business focus and the value chain analysis. We will also converse on why and how statistics, data, business intelligence and familiarity are vital aspects to Apple. In addition this analysis will include how Apple identified areas where it achieved a competitive advantage using information systems management.

In April of 1976, together three men created and launched Apple computers. By January of 1977 one partner sold his shares and the remaining two incorporated their company. For over 20 years, Apple was mainly a builder of individual computers, such as the Apple II, Macintosh, and Power Mac lines, however the company confronted unsteady profits and low market share throughout the 1990s. Steve Jobs, who had been exiled from the business in 1985, came back to take over as CEO if Apple in 1996 after his company NeXT was purchased by Apple Inc., and Steve took with him a new corporate philosophy of distinguishable merchandises and simple scheme. In 2001 when Apple introduced the iPod, Apple became known as the leader in the buyer microelectronics business and then dropped the word computer from his name .The company is now also known for its iOS series of products that started with the iPhone, Apple TV,iCloud, iPod Touch and today several versions on the iPad models (Mallin & Finkle, 2011). As of 2011, Apple was presently the leading technology company in the world with its stock market value reaching $500 billion in March 2012. Their revenue for the year 2011 was $127.8 billion in sales (Mallin & Finkle, 2011).

5 forces Model

This analysis tool was established in 1979 by Michael Porter. This tool helps companies evaluate their competitions and determine strategy. Baltzan (2011) lists the five competitive forces as buyer power, supplier power, risk of substitute products/services, risk of fresh competitors and, competition amongst current competitors.

Buying Power

With Apples' release of the iPod in October of 2001, buyer power was not a resilient force because the limited amount of digital players available to the market that contained a proprietary digital media service specifically designed for the player. Apple is a forward thinking company and realized early on that consumers would be listening to their music through computers instead of buying. This recognition brought on the introduction of iTunes, a media player program, before the iPod in January of 2001 (www.wikipedia.org).

Supplier Power

Apple uses suppliers for key mechanisms from Japan, Korea, and U.S. and completes the assembly by a Taiwanese manufacturer in China (Linden, Kraemer & Dedrick, 2009). Due to their market share in smart phone users, Apple is in better position to negotiate the prices it will pay for these components.

Threats of Substitute Products/Services

The threat level for Apple is high due to the numerous options that consumers have to choose from. Amazon and Android both offer buyers the ability to download digital content, i.e. books, music, movies, and etcetera through its online store. Samsung, Sony, Motorola and Microsoft sell various products (tablets, mp3 players, cellular phones) that directly compete for the same consumers as Apple.

Competition between Current Competitors

Apple is the frontrunner of the competition by evolving products that surpass the desires of their patrons. The corporate approach has preserved their leadership in their sector for the past decade.

Customer Developed Applications and the Five Forces Model

Through its customer developed applications, better known as the App Store, Apple has addressed the three of the five forces of Porter's model. As of March 2012, there is approximately 585,000 available applications in the App Store with more than 25 billion downloads. In comparison Google Play, which offers applications for the Android operating system, has 15 billion downloads and a