apple case Flashcards
(41 cards)
strengths
Brand image
Ecosystem of products→ high switching costs
Vertical integration
Customer service
Innovation and r and d
Successful in retail
Economies of scale
Economies of scope
weaknesses
Privacy
Siri is underperforming
Closed ecosystem → being closed played against apple because their product wasnt compatible with other brands whereas other brands were compatible with eachother
Maybe high price
apples business strategy
Differentiation, offers premium pricing , try to make their products unique
Did they try to change their strategy? They foudn themsleves with a very small market share (IBM was the standard), whent eh CEOs changed, they decided to appeal to the masses by franchising and their licensing tech→ this is cost leadership→ did not work for apple
Other moment where being closed, secretive worked against them: wanted to keep ipods more secretive
Apple store → also was secretive , will develop apps themselves no one else is allowed to create apps on our platform, steve jobs was convinced to let outside app developers to have their apps on the appsstore and they mdae a lot of revenue
3 divisions
hardware, services and wearables
Horizontal diversification
can see through them coming up with different services , wearables
Why is it looking to diverisfy in self-driving cars, augmented reality,
the markets for computers and iphones are slowing down, they want to diversify and be the first into these new product markets
Reason to diversify into wearables:
wanted to expand their brand image→ flood the market to maximize sales , their competitors were getting into wearables (multipoint competition→ look at what competitors are doing), reinforces the ecosystem (more touchpoints we have with the customer, the more we lock them in)
is there diversification value creating?
yes
Why diversify into services?
brand image, multipoint competition, and hardware sales are saturating so need to find new ways of growth,
Which is the biggest contributer to sales?
Hardware is the biggest, allows extension of sales, hardware is the back bone of their businesses
Wearables is the least contributing position, services is a large amount
vertical integration
outside supplier for microprocessor for their phones however they decided to make it inhouse→ Cost savings, extreme practices of secrecy, critical component as well do not want to rely on outside suppliers
forward integration
had apple stores so they can distribute the prodicts directly to consumers, preserve your products, gives customer chance to interact with products, in apple store only apple products (no comparison with competitors)
apple synergies
gives extra revenue, Sellers can push more than one product → one salesperson for multiple products →
-sellers can push more than one product at the same time (this saves money and produces more
money for) (promotes economies of scope)
-ex. People came for the ipod and then ended up being exposed to the mac.
economies of scope
save money because we use the same resources for multiple purposes
Apple stores were successful because of
ipods, one division (hardware) can help sales of other products
horizontal diversification
moved into different industries (services, wearables)
geographic diversification
geographic diversification, the brand can grab more market share, more customers, stabilize if some countries are growing in one market but saturated in another
Bc apple is diversified, if something happens to one product, they are fine
ey have a lot of ther options→ corporate advantage, have bundles of services and products
Shared Technology and R&D: Apple’s products, such as the iPhone, iPad, Mac, and Apple Watch, share common technological components (e.g., processors, software, security features), which allows Apple to spread R&D costs across different products. The development of one product often contributes to innovation in others, minimizing overall costs.
iOS Ecosystem: Apple’s devices are interconnected through the iOS ecosystem. Apps, features like AirDrop, iCloud, and services such as Apple Music or Apple TV+ all work seamlessly across iPhones, iPads, Macs, and Apple Watches. This integration encourages customers to buy multiple Apple products, benefiting from the synergy between them.
Marketing and Brand Loyalty: Apple’s strong brand allows it to market multiple products together, leveraging the trust and recognition built through its flagship products like the iPhone to sell complementary items like AirPods, accessories, or services.
Retail and Distribution Channels: Apple’s stores and distribution network are used to sell a wide range of products, spreading fixed costs like store upkeep, logistics, and customer support over multiple product lines.
Apple Services: Apple’s services (e.g., Apple Music, Apple Pay, iCloud, App Store) are designed to enhance the value of their hardware. The same customer using multiple Apple devices tends to use the same services across them, spreading the cost of service development and infrastructure over a larger base of users and devices
issues with apple
One threat is the regulations→ cant have an apple charger that only fits apple phone
Issue with china
Work conditions are not very good
Anti-trust allegations, anti-competitive behavior
Google being the default search engine, google pays apple a lot of money per year to be the default search engine
opportunties
New tech→ AR, self driving tech
buyers and pc manufactures
Lenovo, Hewlett and dell vendors –> very concentrated
buyers of pc fell into five catgeirues, wanted to balance price with service and suooort
suppliers are two categories for pc
those that made the products with many sources and those that made products (intel and Microsoft )
micropressors= brains of the pc, intel controlled this bc they had power and lot of tech
os was what managed a pc and Microsoft dominated
smartphones nd tablets coming into play
why did pc sales suffer
bc of the iPhones being introduced
changing the Mac
new distrbtuon strategy by adding stores, shift to intel chips, new iOS
