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strategic management > apple case > Flashcards

apple case Flashcards

1
Q

strengths

A

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

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2
Q

weaknesses

A

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

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3
Q

apples business strategy

A

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

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4
Q

3 divisions

A

hardware, services and wearables

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5
Q

Horizontal diversification

A

can see through them coming up with different services , wearables

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6
Q

Why is it looking to diverisfy in self-driving cars, augmented reality,

A

the markets for computers and iphones are slowing down, they want to diversify and be the first into these new product markets

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7
Q

Reason to diversify into wearables:

A

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)

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8
Q

is there diversification value creating?

A

yes

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9
Q

Why diversify into services?

A

brand image, multipoint competition, and hardware sales are saturating so need to find new ways of growth,

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10
Q

Which is the biggest contributer to sales?

A

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

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11
Q

vertical integration

A

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

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12
Q

forward integration

A

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)

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13
Q

apple synergies

A

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.

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14
Q

economies of scope

A

save money because we use the same resources for multiple purposes

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15
Q

Apple stores were successful because of

A

ipods, one division (hardware) can help sales of other products

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16
Q

horizontal diversification

A

moved into different industries (services, wearables)

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17
Q

geographic diversification

A

geographic diversification, the brand can grab more market share, more customers, stabilize if some countries are growing in one market but saturated in another

18
Q

Bc apple is diversified, if something happens to one product, they are fine

A

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

19
Q

issues with apple

A

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

20
Q

opportunties

A

New tech→ AR, self driving tech

21
Q

buyers and pc manufactures

A

Lenovo, Hewlett and dell vendors –> very concentrated
buyers of pc fell into five catgeirues, wanted to balance price with service and suooort

22
Q

suppliers are two categories for pc

A

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

23
Q

why did pc sales suffer

A

bc of the iPhones being introduced

24
Q

changing the Mac

A

new distrbtuon strategy by adding stores, shift to intel chips, new iOS

25
Q

iPod

A

jobs Visiom of an explosion of new digital devices
iPod that set apple on its explosive growth path
could sync w a Mac (synergies )
made a lot of the revenues

26
Q

Iphone

A

at the time was risky bc there was a lot of competition , had control over distribution and pricing , able to capture the majority of the profits in the smartphone industry bc iPhones were so expensive
App Store helped the iPhone as it gets revenue when apps are downloaded
a lot of competition with android as they have lower prices and a lot of variety, innovation
xiaomi and oppo
comp to the app store was play store by google but App Store made twice the revenue
qualcomm- the suppler
even though the industry was becoming more slow, apple didnt lose profits as they kept innovating the iPhone

27
Q

iPad

A

was supposed to be ben easier to use than a pc, ,many competitors released tablets
lost momentum bc of no innovation
sales trended onward

28
Q

services

A

can get all services for a gee
Apple Music: biggest competition was Spotify , people were subscribing fast to apple music, wanted artists to be funded
Apple Pay: had competition with banks, credit card companies , growing revenues
Apple TV: lost money, relied on china, doubled prices, completed with Netflix amazon prime
apple care, iCloud, iTunes

29
Q

wearables

A

wants to reach multiple sectors (horizontal diversification)
apple watches: created bc iPod and iPad sales were bad, lower costs for it, new features , dissapiint at first, watches were banded
AirPods: sold fast
air tags: exploded in the us bc of post pandemic travel
HomePod: smart speaker, competed with amazon and google but didnt do well bc of shirr

30
Q

new tech

A

vision pro: comp was meta , would become a vita. part of the apple ecosystem , could sync with AirPods and phones
self driving cars: project titan but had been disolbed bc of high employee turnover
ai: apple was the largest acquirer of ai companies , wanted to improve siri, Ajax gpt

31
Q

shadows over apple

A

facing numerous lawsuits in the ys and Europe bc of anti trust behaviours (building an eco system where you cant use complementary products ), tracking without permission , they are so secretive
chain also banned iPhones

32
Q

apples history

A

jobs wanted to bring an easy to use computer and did well apple was the industry leader until IBM entered
everything changed when IBM entered
IBM pcs honed more market share and a new standard (bc apple was too secretive and didn’t want to rely on third parties )
apple responded by introducing the Macintosh
IBM and apple created a joint venture but parted ways
tried to do cost leadership but didnt work
apple announced it was going to commit to core products–> narrow product line and introduced the IMAC
jobs trued to reshape apple

33
Q

the personal computer industry

A

IBM that brought PCS into the mainstream
started to decline cause of covid

34
Q

Digital hub strategy

A

wanted the Mac to be seen like this
able to premium price the pc
made changes to the pc (new iOS, new distribution and new chips)

The strategy revolved around positioning the Mac (later the iPhone and other devices) as the central “hub” for digital content creation, management, and consumption, connecting with various peripheral devices and software

35
Q

what allowed apple to grab A BIG SHAre of the market

A

covid

36
Q

why could apple sell their Macs at a premium price

A

bc they had loyal customers

37
Q

intel and microsoft

A

have power for supplying microprocessors and operating systems as they were concentrated
intel dominated the microprocessrs
microsoft domiate the operaitng systems

38
Q

pc alternatives

A

smartphones and tablets

39
Q

suppliers for smartphones

A

one major one that was Qualcomm
Jobs decided to buy two ARM microprocessor companies
apple also bought Intels cellular modem business

40
Q

Iphone

A

were expensive
app store
gained market share super fast bc they were easy to use, innovative
pandemic allowed it to gain a large market share

41
Q

winter=l

A

windows os combined with an intel processor

strategic management (11 decks)

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