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Apple: Strategic Management Case


Study

Imran Khan
Saurabh Gupta
Shreshtha Jaiswal
Subhash

Where is Apple Located?


Apples main headquarters is located at 1
Infinite Loop, Silicon Valley, California.

Where is Apple Located?


Apple has also expanded internationally
with locations in Cork, Ireland and
Silicon Valley, Singapore.

Cork, Ireland

Silicon Valley, Singapore

Where is Apple Located?


Apple has over 200 retail locations across the
U.S. To find a store nearest you, Apples main
website provides a search engine that can
provide that information.

Apple, Inc.
Now

Founded 1977
HQ Cupertino, Ca. The Mother ship
Largest U.S. company ever
72,000 Employees
34 Patent Applications in October
80% of revenue is from new products sold from
Mid Sept to M/E Oct

Competencies
1.
2.
3.
4.
5.

Simple, Well Designed, User friendly


Innovative Culture of Design
Loyal Customers
Technology iOS
Energy Efficient

Internal Assessment
1.
2.
3.
4.
5.

Operational Focus - Willing to release incomplete products


Wall Street - Engaging to increase dividends
Shifting Values - MBA vs. Liberal Arts
Relaxed Atmosphere - Leadership quiet yet demanding
Highly Ethical ?- Some might question

Procurement
Vendors

Change
is Inevitable?
Release
history

LEADING INDICATORS
&
DEMAND DRIVERS

Demand as a F(x) of leading


indicators
D = f(li1, li2, li3, , lin)

Market Share: Stable


Search trends as an early indicator: Who has it?
Networking effect
Sharing
Social Nets Social Networking capabilities

Economic Leading Indicators


Demographics

World Progress Indicators

Leading Indicators: Product Drivers


Product Drivers:

Mobile browser counter as a


leading indicator ?
ANDROID
iPhone

EXTERNALITIES

Smart Phones: Competitors

iPhone, Android or Windows Phone ?

Mobile computing: Laptops &


Notebooks

Value Chain & Business Model


Banking: $$$$$$$$
Educational Financing

App developers
Effective Designers
Infrastructure
Talent (Well trained
workforce)
Apple University
$$$$$$$$$$$$$$
Manufacturing,
Suppliers, Partners
(100+)

R&D,
IP

Innovation
Marketing
Design
Manufacturing

iPhone
iPad
iCool
Patents

Quality

Distribution

Kiosks
Digital
Cloud
Direct
Apple Stores
Retail
VARS
Education

Key Success Factors


FreeBSD

Design
Miniaturization
Security
Ease of Use
Reliability
Marketing

Open Systems

V
A
L
U
E

Improve + Innovate

Closed Systems
++
+
$$
$

Cool! Secure
Reliable
Reduced Cost of production

Improved Sales & Margins

Target Market
Enterprise + Government
G

$$$$$$ Affluent

Premium Pricing

Education

$$$$$ Class

SMB

BOP $
B2B Market

B2C Market

INDUSTRY GROWTH & MARKET SHARE

Smart Phones
: 71% CAGR for the next 4 yrs.
Cloud computing
: 20% CAGR
Mobile dev. in general: 25%
Carrying
Capacity ???

Convergence

*provisioning

*nomic

02

Smart Phone: Market share growth

The mobile worldwide market in 2010

Apple as a Mobile browser leader In


2010

iPhone Mobile market share


2012

What about the iPad ?


Apple has 68% of the tablet market
Cannibalization of iPad by the mini iPad?

Google & Others Tablets


Open source to the rescue?
App store: Closed platform ?

The Apple Retail Store


Employees:
Apple Specialist: Knows
software, inside and out
One-to-One Personal
Training: Hour Long
Free Workshop-Group:
Training
Genius Bar: Damaged
product assessment
Concierge: Help you find
anything is in the store

Activities:
Local Gathering Place
Free Musical
Performances
Entertaining/Informative
Presentations
Youth Workshops: Yearround
Apple Camp: Summer
School Night: Students &
Teachers showcase own
work done on Mac.

Why and How did Apple beat Google & Microsoft?

When you first start off trying to solve a


problem, the first solutions you come up with
are very complex, and most people stop there.
But if you keep going, [] you can often times
arrive at some very elegant and simple
solutions. ---- Steve Jobs

Apple re-legitimize vertical integration

Competitive Advantages of Apples


vertical integration

Sell at a Premium

Apples profit comes from


margins in hardware (iPad/iPhone)

Big picture: hardware drives


Apples gross margin

Cross-sell your product line

Who is the iCustomer?


Product line covers all markets, all price
ranges, all needs with an accurate
segmentation.
Product lifecycle: each new product
implements appealing new features, strongly
inducing the loyal iCustomer to buy new
products (iPhone 4 to iPhone 5)

iPod and iPhone drives Mac sales

Integration reinforced by retail


strategy

Apple Stores are a place where the company can:


showcase a 100 % Apple environment (to appeal the iCustomer)
have a trained sales force selling its products.

iCustomers will drive Apples sales

How did Apple cross the chasm?

Lessons learned from its failure in 80s

Think Different!!!
What was Apples vision of Computing?

To make it happen Apple is investing


in cloud

Assessing Risks and Competition

Worst-case scenario:
How could Android kill iOS?

Conclusion

QUESTIONS???

THANK YOU!!

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