Business Models and More

Cases Where Second/Late Movers

Surpassed First Movers
Product First Mover

35 mm cameras

Ballpoint pens

Diet soft drinks

Personal computers
 Cases Where Second/Late Movers
Surpassed First Movers
Second/Late
Product First Mover Mover Comments

35 mm cameras Contrax (1935) Nikon (1946) Germans pioneered the

technology and led market
until the Japanese copied
technology cheaper.
Ballpoint pens Reynolds (1945) Parker (1954) Pioneer disappeared with
Bic (1960) original fad. Bic entered last
& sold cheap disposables.
Pioneers unable to match
Diet soft drinks Royal Crown’s Tab (1963)
distribution & marketing
Diet Rite Diet Pepsi (1964) Cola (1962)
resources of Coke & Pepsi.
Diet Coke (1982)

Pioneers created computers

Personal Altair 8800 (1975) IBMPC (1981) computers for hobbyists, second movers
Apple II (1977) Dell (1984) dominated with marketing,
late movers used lower cost.
Apple

Why did the first mover advantage Apple had in the computing
industry not provide a sustainable competitive advantage?
The Dynamics of Computer Industry

• What is the competition of computer industry like in 1980’s,

1990’s, 2000’s, and after 2010?
• The main technologies
• Who are the competitors?
• How do their situations change in the industry?
 Comparative Market Share (%)
by Revenue

25 IBM
Apple
Packard-Bell
20 Compaq
Dell
15

10

0
1988 1989 1990 1991 1992 1993 1994 1995 1996
Revenue Comparison (in $millions)

$30,000
Dell
$25,000 Compaq
Intel
$20,000
Microsoft
$15,000 Apple

$10,000

$5,000

$0
1991 1992 1993 1994 1995 1996 1997
Profit Comparison (ROS %)

40 Dell Compaq Intel Microsoft Apple

30

20

10

(10)

(20)
1991 1992 1993 1994 1995 1996 1997
Rebound?
More Than Rebound!!!
 From iPod, iPhone, to iPad

The question of
sustainability…
How did Apple move all the way from
iPod to iPhone and iPad?
Key Resource: Multi-Platform

iPod iPod iPhone＆

&iTune Appstore

200 2003 200

1 8
The business model of iphone

• Brand • Exclusive partnership • Rocket high sales of

with telecom iPhone
• User-friendly
US companies
interface • Increasing customers
A • Telecom companies
for telecom companies
• High technology win customers
Germany
• Rich • Apple provide some • Google admitted that
complementary data service, iTune the high sales of
etc. iPhone increased the
hardware and visits to google map
France • Apple and the
software by 50%
telecom companies
• Great experience share the income
from telecom service
UK
The Eco-system of Iphone
Traditional Eco-system in Telecom
9

Individual
Customer

5 4 8

Content provider System integrator Apps Developer

2 1
3

Network equip.
Telecom Corp. Terminal Devices
manufacturer

Internet service
provider

7 6

Component
Tester
provider
What is a Business Model?

• Model
• A model is a plan or diagram that’s used to make or
describe something.

• Business Model
• A firm’s business model is its plan or diagram for how
it competes, uses its resources, structures its
relationships, interfaces with customers, and creates
value to sustain itself on the basis of the profits it
generates.
• The term “business model” is used to include all the
activities that define how a firm competes in the 6-18
marketplace.
Dell’s Business Model
1 of 2

• Beyond Its Own Boundaries

• It’s important to understand that a firm’s business
model takes it beyond its own boundaries.
• Almost all firms partner with others to make their
business models work.
• In Dell’s case, it needs the cooperation of its
suppliers, customers, and many others to make its
business model work.

6-19
Dell’s Business Model
2 of 2
Dell’s Approach to Selling PCs versus Traditional Manufacturers

6-20
Hub-Spoke System & Point-to-point System
Lulu.com in publishing business
Business Model in Dynamics

Virtuous cycles: strengthen their own business model and

weaken the competitors’

• Is it aligned with company goals?

• Is it self-reinforcing?
• Is it robust?
Successful Business Models

• Facebook
• Twitter
• Airbnb
Discussion: live video streaming

o Facebook Live; Periscope

o Twitch.tv; Twitch Plays Pokémon

o Lifecasting; Douyu
Issues and Outlook:
2018 and Beyond

• Do you consider Apple as a successful company?

• Past/current strategy?
• What are the main concerns/issues that confront Apple?
• Where is Apple heading in the future?