Apple Flashcards
1
Q
Strengths
A
- innovative capabilities
- proprietary design
- brand recognition
- highly profitable, financial strength
- eco-system of products (interlinked products)
- –> cross-sell
- efficient supply chain
- economies of scale
- –> more bargaining power
- ease of use of products
- stores
2
Q
weaknesses
A
- may be perceived as over priced
- closed system
- ->all developed internally, people couldn’t make compatible products
- ->IBM became industry standards (everyone made products/programs compatible)
- –>forced Apple to become a niche
- –> at first, Jobs didn’t even want iPod to be available to Microsoft users
- ->Jobs didn’t want 3rd party developers to add apps to App store
- HomePod speaker
- -> virtual assistant, Siri, wasn’t as good as Amazon echo or google home
- respectful of privacy
- –> but not keeping data means Siri underperformed
3
Q
business-level strategy
A
- *diversification
- closed system, proprietary designs sold at premium prices
- at one point, this wasn’t effective, began to license products (essentially wanted to pursue cost leadership)
4
Q
Corporate-level strategy
A
3 main divisions
- hardware
- wearables, home accessories
- services
- these divisions work together, Apple tries to make things work together
- Apple bundles products
- Apple can do joint marketing
- diversified to wearables because phones began to become saturated, wanted to take advantage of Apple’s ecosystem, tap into existing customer base
- hardware is what makes the most money for Apple (most revenue), wearables is the smallest
- horizontal diversification (within divisions)
- -> ex. PCs, iPhones, iPads
- uses value-added diversification
- ->services add to existing products
- synergy
- ->cross-selling = same target consumer base
- economies of scope
- ->knowledge, R &D, HR, joint marketing/distribution
- backward integration –> also a kind of diversification
- ->bought Intel’s cellular modem business, bought microprocessor companies
- -> cost savings, and to control critical component
- forward integration
- ->Apple Store–> much higher sales, control of customer experience, more upselling
-geographic diversification
5
Q
describe the wearables, accessories, and home devices division
A
product markets:
- headphones/”hearables” (airpods)
- smart watches (apple watch)
- smart speaker (homepod)
- airpods and apple watch in strong position and both growing
- 9.4% of contribution to total Apple revenue
6
Q
describe the hardware division
A
- different industries since competition and suppliers are different (different configuration of 5 forces)
- PCs are core business (started with this)
- ->started to diversify because prices were dropping in PC, and there was an industry standard, but mostly because PC industry matured
- –> there was an innovation plateau
- iPhones, started to serve as substitutes for PC
- majority of Apple revenue comes from here
-also iPads
7
Q
Apple’s synergies
A
- Apple care with hardware + wearables
- all services work with hardware
- airpods complement iPhone, iPhones give base to upsell
- digital hub strategy
- apple store
- –> success of iPod, brought people into store/changed image of Apple, could increase sales of PCs
8
Q
describe Apple’s multipoint competition
A
Amazon
-competes in smart speaker, cloud services, Apple TV and Music
Google
-phones, speaker
Samsung
-phones, tablets
9
Q
what are the benefits of corporate diversification/corp advantage
A
- less risk, can afford to cut costs
- can bundle products
- ex. apple Music vs. Spotify
10
Q
describe the problem and potential solution to this case
A
- hardware is plateauing
- ->should Apple switch to focusing on growth in services?
- if services first, want to make them not tied to hardware
- –> device agnostic, but this goes against closed system
- 5G tech could help hardware
- could they really differentiate services?
- -> ie. Apple Music, TV (would need exclusive contracts)
