Apple Case Team Assignment

Apple Case Team Assignment

What historically have been the sources of Apple’s competitive advantage? (15pt)

Apple, since its conception, has been focused on making a superior personal computer. Apple was, at first, ahead of their competition due to their improvements upon the personal computer. Apple was adamant on creating an easy to use personal computer with exceptional design and style; creating a premium product. Apple was focused on being different, rebellious and cutting-edge. Steve Jobs coined the motto, “It’s better to be a pirate than join the navy,” which exemplifies the rebellious and unique nature of Apple’s culture. Innovation and aesthetics were, in Steve Jobs’ eyes, the competitive advantage of Apple.

When Apple shifted away from this vision, it took major hits to their profits and lost much of its market share to its competitors. This is because Apple tried to implement the advantage that IBM and other competitors had, which was low-cost mass market appeal products. Apple even started creating desktop peripherals and other products not true to the identity of the brand. This marred the image of Apple and confused its identity; ultimately making Apple lose their competitive advantage. Apple went from a unique, rebellious, and innovative company to just another mass-producing computer company with inferior technology.

Once Steve Jobs returned, after all of the chaos, they went back to their roots of being an innovative company focused on creating aesthetic, premium personal technological devices. This revitalized the company and with innovations such as the new Mac OS and iPod, Apple bounced back to the likes that no one has seen before, and has become the most valuable company in the world.

2. Why do you think Apple has been able to maintain its success even after the death of Steve Jobs? (15pt)

Apple is a constantly evolving and innovative company. After the death of Steve Jobs in 2011, Apple was able to maintain its success due to Jobs leaving the company in capable hands and through the iconic brand image he created.

Steve Jobs created Apple Computer, Inc in 1976. During his time as CEO, he led the company through periods of financial success and innovation leading to category-defining products. His successor, Tim Cook, feared that Jobs’ successes from continuous innovation were not sustainable. However, before his death, Jobs knew he was leaving Apple in capable and innovative hands.

In 1983 Steve Jobs hired John Sculley as Apple’s new marketing guru. Sculley’s marketing campaigns introduced Apple as a “revolutionary, subversive, and rebellious company” (Rothaermel 3). His out of the box ideas changed Apple’s core identity. Another important hire by Jobs was the designer Jonathan Ive. Ive used industrial design to make more aesthetically pleasing products. Computers before Ive were considered boring boxes, but his ability to push the limits of design and technology gave Apple a serious competitive advantage over its competitors.

Pushing the limits through technology, design, and unique marketing are why Apple has been able to maintain its success even after the death of Steve Jobs. Apple’s brand name has been cemented as an industry leader and its success is here to stay.

3. Pick one of Apple’s product/service (Iphone, Ipad, Apple TV, Apple Music, Apple Pay, etc.) and discuss if you think Apple will (not) be able to maintain sustained competitive advantage against the competitors in that sector and why (e.g. Iphone / Samsung, Xiaomi, etc) (20pt)

Use the VRIO/SWOT framework wherever appropriate to guide your answers.

We have chosen to look at the Apple product the iPhone. The iPhone was first released in 2007 and has since become intimately woven with our modern social and technological world. There is no doubt that the iPhone is integral and innovative, but we are curious about the iPhone’s role and place in the smartphone industry going forward. Using VRIO and SWOT analysis, we will analyze the competitive strategic advantage gained by Apple from carrying the iPhone.

VRIO Framework

Valuable

The iPhone has been a historically profitable product for Apple. At the end of 2014, Apple posted a yearly profit of $18 billion after releasing the iPhone 6 that year, the largest ever in any company’s history. Its development and sale have helped Apple repeatedly post record quarterly and yearly profits, not to mention the impact on the intangible value of the brand and the exclusive image connected with owning an iPhone. But the company has announced that the iPhone has hit its slowest sales since the initial 2007 release. This drop in sales is indicative of the drop in the iPhone’s value. While the value has not completely eroded, some analysts attribute the slowing sales of new iPhone models to the fact that the value of the features of the new models have not correlated with the increase in price.

Rare

Neither the technology nor the idea of the iPhone is rare today. The increasing number of different smart phone models and types is a testament to the fact that the iPhone is no longer the only game in town. Companies like Samsung, LG, HTC, Sony and Google have ensured that both the concept and execution of the iPhone is no longer rare.

Inimitable

The main technology of the iPhone is not in itself inimitable. When the iPhone was first developed, it had technology that was considered “groundbreaking.” It rolled an iPod, a mobile phone and a brand new internet device into one revolutionary product. It was Apple’s golden child, one that other companies would scramble to imitate. The competitive environment for the iPhone looks different today. Many technologies and designs are shared by smartphone from all of the various competitors to the iPhone. Apple does not have a monopoly on the technology. On January 26th, 2016, however, Apple was granted a total of 53 new patents, with 9 of them being design patents. It remains to be seen whether these patents will be effectively employed by Apple in successive models of the iPhone.

Organized to Capture

Apple is organized to capture the value of the iPhone. Apple, due to its history, is already familiar with the technology market, as well as emerging markets. Apple also has the infrastructure, such as Apple stores, in order to capitalize on the iPhone, has contracts