Case Study on Apple

Apple Inc, an American multinational corporation with 34-years of history is just like a roller coaster ride full of highs and lows not to mention as expected in a highly innovative company. The company’s well-renowned products are Macintosh computers, iPod, iPhone, iPad and the line of software includes the MAC OS X operating system; the iTunes, iLife and the iWork. As of August 2010 the company operates 301 retail stores in ten countries, and an online store where software and hardware can be bought or sold.

Apple Inc, just like many strong culture driven organizations, reflects the characteristics of its leader “Steve Jobs” who is had his share of ups and downs yet faced all the challenges like a soldier. The company struggled in absence of Steve Jobs but was able to sustain itself contrary to what the market believed. When asked in late 1997what Jobs should do as head of Apple, Dell Inc. 's (DELL) then-CEO Michael S. Dell said at an investor conference: "I'd shut it down and give the money back to the shareholders. ” (Burrows,Grover, and Green) Well, times changed.

Less than 10 years later, BusinessWeek ranked Apple as the top performer in its 2006 BusinessWeek. Apple attributes their success to robust sales of iPod music players (32 million in 2005). They are optimistic about the economies of scope with media giants, such as Disney and Pixar. The strong concentration on aesthetic designs and a culture of differentiation has carved new stories in the success of Apple Inc. Steve Jobs and Steve Wozniak founded Apple on April 1, 1976 in Cupertino, California, USA. It was a concoction as diverse as vinegar and oil, but was simply a success.

Jobs was the virtuosic salesperson and a visionary while Wozniak was the technical genius and together they two sold 50 Apple I kits to Byte Shop, CA. This was only a beginning as in late 1980’s Apple went public. In 1984, Apple released the famous Macintosh, the first computer to use the GUI (Graphical User Interface) a radical development at the time, yet sold poorly resulting in departure of Steve. Sculley, who took over as CEO in 1983 had taken some major steps to bring Apple back to the profitability, for instance, he reduced the price of Apple computers to attract the mass-market.

Sculley also chose to form an alliance with the Apple’s rival IBM, but all his attempts went in vain. Then Splinder chaired as CEO, he cancelled the plan to put MAC OS on Intel chips. He reduced 16% of the Apple’s workforce to slash the cost. In 1996, Amelio took over as CEO the first thing he did was to restore the price differentiation strategy. But the company faced problems as Microsoft Windows operating system was eroding the market share. To turn this around Apple recalled Steve in 1997 and he returned the company to profitability by introducing more innovative products such as the iMac.

2001 saw the release of iTunes and iPod. In 2007 Apple launched the iPhone that took the company to the new heights when all other were getting severely hit by recession, and when that was not enough, Apple launched the iPad in 2010 that took the market with complete surprise. Tablet PCs another brilliant innovation by Apple. 2. 0 Strategies of Apple We can describe Apple’s strategy as the so called “digital hub strategy” based on product differentiation, product innovation and product integration. Another strategy Apple has successfully abled to pull till now is the price differentiation strategy.

2. 1 Product Differentiation So what differentiates the Apple products from its competitors? All of Apple products contains some sort of innovations, un-mirrored in their respective industry for example the trademark multi touch track pad, the distribution of the Apple applications tools to potential functionality is limitless!. A more stable operating system, “MAC OS X” and other software like iLife, iWork, Final Cut Studio and iLogic. Takes Apple to whole new dimensions which one could not even have dreamt of in the 1976!

The explosive growth of the Apple has come from the Sales of its ever changing iPod; just within nine years of its launch it captured more than 70% of the market. Through its huge storage capacity and very user friendly and aesthetic designs it has been the ruler in the Mp3 players industry. 2. 2 Product innovation Apple products have always been very innovative. They believe in the application of the ideas to practice. Before the launch of iPod there were numerous Mp3 players in the market but none with the characteristics of the iPod. The sleek design with the ability to connect through Wi-Fi took the mp3 players to the NEXT gen.

iPod touch was not only in the competition with the Mp3 players but also with the Nintendo DS and PlayStation portable because of its unique games functions with internet connectivity. The iTunes was one of a kind when launched. It was the first legal pay per song website. Within three days of launching the service, consumers have downloaded one million copies of free iTunes software and had paid for one million songs already. Another remarkable invention of iPhone, especially at the time when the mobile phone industry was already flooded with many suppliers and amongst them Nokia was the leader, with its every day new model strategy.

Initially, iPhone had some problems with the service sharing agreement strategy but with time Apple learned quickly how to lead. The result was the iPhone sales revenue of $13 billion by the end of 2009. With its revolutionary design, remarkable features and functions and above all with the help of “App Store”, Apple truly has left behind all of it rivals. Apple has always been innovative, with futuristic designs and ideas that actually work, has built a very loyal customer base. 2. 3 Product Integration

A major advantage Apple holds over its competitors is a seamless integration of its products makes it very easy for the user to download and make changes in their devices for example, the synchronization of Apple iPod with computers and iTunes, also referred to as the entertainment hub. Advertising: they have created a cool brand image like creating a product that is appealing to both young and adult alike. Apple prides itself on its innovation. It is evident that this attitude permeated throughout the organization.