APPLE Inc.

Case Analysis

GROUP3:
Vijay B D010
Sriram D S D017
Sujatha G D018
Mohit Gupta D024
Kumar K D034
Sarthak D039
Abhinay P D041
Hemanth S D049
Dhruvi Shah D060

















Q1. Using the Porters five forces analysis, explain the key factors that define PC industry
opportunities and challenges



PC industry opportunities: The barriers to entry are high and as a result building a robust supply chain
with preferred suppliers can help cut costs. Many small companies come up with very interesting
innovations and the big players can look at an acquisition strategy to achieve inorganic growth to
establish a leadership position as an innovator in the market. Maintaining strong relationships with
powerful suppliers will help companies go a long way.
PC industry challenges: Patent infringement lawsuits are a common thing in the technology industry and
as a result players should have a very competent law team. Establishing cost leadership is easier said
than done in a world plagued by price volatility. Making a lifetime consumer is a big challenge in a
market with a lot of interesting products from various companies.
Q2. How did Steve turn around a company which was in near bankruptcy in 1996 to being the most
admired company for three consecutive years?
When Apple was incurring losses due to the rising competition from IBM and Microsoft in the 1990s,
insiders believed that Apple was within 90days of bankruptcy. It was at this time that Steve Jobs took
over the charge as the new CEO and brought about the following changes to make the new Apple.
Product strategy
Product: After taking over the charge from Gilbert Amelio, Steve halted the Macintosh licensing
program to Microsoft Office Suite and focused on developing core products. He increased the spending
on R&D and narrowed down its product line to just four categories. Jobs laid special emphasis on the
products industrial design, simplicity and elegance with cutting edge technology. All these efforts led to
the innovation of iMac in 1998 which turned the tables for the company, which was making loss a year
ago, to earn a profit of $309million. After that, the company thrived on its technological innovation to
control both hardware and software of a product and released innovations like the ultra-thin Mac Air. In
2001, Apple introduced a new OS called iOS based on UNIX which was the first fully overhauled platform
since 1984. The same year they launched iPod, followed by the iPhone in 2007, then the iPad in 2010.
Place: Jobs restructured its supply chain and distribution line by hiring Taiwanese contract and moving
from small outlets to national chains. Apple launched a website to set up direct sales for the first time.
Further on, Steve built on his strategy to have a separate set of proprietary apps and also introduced the
Apple Retail Store and later the iTunes software which differentiated Apples MP3 leadership.
Price: Apple moved away from the low-cost PC producer strategy initiated by Sculley to a premium price
segment of computers. The iMac was priced at 1299$. Apple never tried to break its premium tag in
products but gained inroads by allowing cheaper pay-per-song downloads, eBooks at lower price and
applications for iPhone at prices as low as $0.99.
Brand Positioning
In order to reposition itself as a trendy brand and a brand that would be a cultural force, Steve jobs ran a
multi-million dollar marketing campaign like Think different advertisement. They promoted their
product through popular and fashion magazines instead of general computer publications. Apple
highlighted its computers as the worlds greenest lineup of notebooks. Also, Apple never failed to
position itself as a brand for innovation. Even though cloud computing was known by then, Steve
launched the iCloud with much fanfare and positioned it as your computer becoming a digital hub.

Q3. What are the broad lessons from Apple?
The following are the key lessons that we can infer from Apples successful turnaround as a company:
1. Managing perception: By the turn of the millennium Apple was known as a company that produced
PCs to a company that sold digital devices. Steve Jobs and Apple made a clear point that expansion of
ones product base is of extreme importance for survival of a brand. However, more important is the
ability to figure out what the consumers want even before they do.
2. Stop the sell-out: To take on the competition, the previous CEO Sculley decided to license Apple
technology to the outside world to make it a mass product. However, Steve Jobs reversed it back and
the USP of Apple today is its uniqueness. There was Apple, and there were others. This reiterates the
lesson: Work on your core competencies to differentiate.
3. Detox the supply chain: A good product is never enough to succeed on its own. The distribution chain
is as important, if not more, as a product and Apple proved it yet again. Apple bet hugely on the Apple
Retail Stores which were a humongous success. The stores brought the Apple experience to the
customer. Similarly, the online iTunes store was a runaway success. Also, iPhone changed the rules of
the cellular carriers industry by commanding a different revenue sharing strategy, which was possible
due to its success. Apple used to its advantage in every sense.
4. Move Beyond the Myopic culture: Like Theodere Levitt postulated, for companies to ensure
continued evolution, theh must define their industry broadly and should not bank on the presumed
longevity of a product. Apple rightly understood this concept and always defined itself as per the
customers needs. It sought to control its hardware and software capabilities to become a digital hub in
every sense.
5. Market your ecosystem: Apple led customers to view their computers as a digital hub, their one-stop
in the virtual world. Jobs wanted to ensure customers had their hub ensconced by the Apple experience.
Ergo, Apple came up with in-house software that fit just in with the Apple eco-system. So, that it is not
the hardware that was ergonomic but the software too providing a holistic aesthetic digital experience.

6. Defend your Turf: The iPhone was one of the most selling Apple products and within 6 years of its
launch overtook the largest mobile phone manufacturer. However, imitations and inspirations of iPhone
led to patent wars and Apple did not shy away from defending its intellectual property. Apple and
Samsung are involved in one of the greatest patent wars of all time.

7. Redefine your success: Apple did not rest after the success of its iPod or after the revolution of
mobile industry by iPhone. It redefined the netbook category with the introduction of iPad in 2010,
which was a huge hit in itself, again changing the industry. For any brand to sustain, it needs to
constantly innovate, redefine and plough ahead or perish.