Transcript The Value Chain
Apple 2006
Ellen Suprun Julie O’Halloran Wojciech Jagiello Finbarr Kearney Kingsley Egwim
Introduction
1. External Analysis 2. Internal Analysis 3. Strategy 4. Assessment and Recommendations
Porter’s Five Forces
Threat of Entry Low • High capital investment • Commoditized market makes it difficult to differentiate • Substantial dominance of Wintel platform and low-cost large-scale players (Dell, Gateway, HP, IBM) •Oligopoly market Suppliers High (components suppliers) • Most components are commoditized, however Intel, Motorola, IBM become dominant, that increases power of supplier Substitutes High • PCs are available in multiple configurations, performances and price ranges •Other firms offer as good products •Rivalry is very high Buyers Low •PC and new applications High End users are mostly loyal •Imperfect knowledge about price forming
Information Systems
The Value Chain
Support Activities Company Infrastructure Materials Management • • Leadership Culture Human Resources • • • • • Jobs and Wozniak John Sculley Mike Spindler Gilbert Amelio Return of Steve Jobs R&D Production • • Apple have always added value through R&D Failed R&D project with IBM • Vertical Integration to outsourcing 1998 to reduced costs Marketing and Sales • • • • Premium Pricing Brand Loyalty Retail Outlets Low market share in the corporate market place Customer Service
Strengths
• • • • • • Technology and R&D team Investors Organizational culture Brand Loyalty Marketing Partnerships
Weaknesses
• • • • Lack of compatible software 1984 Strategy change inconsistent with the business model – cutting costs Failed investments Leadership – changes and succession planning
Opportunities
• • • iCloud New markets- expansion into mobile phones, tablets, BRIC countries Large corporate market segment
Threats
• • • • • Open architecture Economic downturn Competitors Suppliers Legal issues
Apple’s Competitive Strategy
• • • Differentiation Strategy Core competencies – Innovative Culture – Team spirit (people) Marketing – Consumer Loyalty – Distribution network
Questionable moves
• • • • Mac Clones Niche market Strategy change & Leadership problem Partnership with IBM
Critical Success Factors
• • • Leadership of Steve Jobs Marketing and design Innovation and new product development
The role of vertical integration in strategy
Simplicity and quality Complete user experience
Benefits
Capturing values on every step Higher costs of production and development Not dependent on innovation Importance of strong leader
Dangers
Apple being relatively fragile Preventing others from innovating
The iPod Phenomenon
• • • • • • Launched November 2001 Buy – Listen - Manage Sold 42 million iPods by 2005 75% market share iTunes: a justified loss leader 2005 -39% Apple revenue
• • • •
2006 to Date
Apple Computer-> Apple 2007, iPhone, Apple TV 2010, iPad Ongoing Software Innovation (iCloud)
Recommendations
• • • • Vision and leadership Learn from mistakes Corporate Social Responsibility Stick to Core competencies – Design – Innovation and R&D