Microsoft PowerPoint Business Strateg

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Apple Inc. in 2010
Stragegy and Structure_ Nov.18, 2014

Content
Industry Introduction
Strategy Analysis
Recommendation

Industry Introduction

Industry Introduction
- Smart Phone Industry
Supplier
- Low bargaining power

Buyer

Substitute

- Booming market

- Difficult to find substitute

- High price elasticity
- Low switching cost
- Certain brand royalty (for Apple users)

New entrant
- Certain requirement of technology and

investment

- Networks/Carrier barrier
- Certain local policy incentives
11/26/2014

Existing competitor
- Heavy competition (Nokia, Motorola
and Samsung with market share of 60%)
-Low product life cycle(6-9 months)
- High product differentiation
(platform/system, business model)
- White-box phones

4

Industry Introduction
-PC Industry
Supplier

Buyer

- High bargaining power for
microprocessor supplier

Substitute

- Booming market

- Low bargaining power for accessories

- Certain substitutes: Play station,
smart phones and so on.

- High price elasticity
- Low switching cost
-Certain brand royalty (for Apple users)

New entrant
- Substantial requirement of
technology and investment
- Certain policy incentives

Existing competitor
- Heavy competition
- Many players
- Product differentiation
- Driven by price and functions
- White-box PC

11/26/2014

5

Industry Introduction
-Industry Analysis

Smart
Phone
PC

Supplier

Buyer

Substitute

New Entrant

Current Competition

















• The comparison is based on the situation around 2010. When Apple entered smart phone industry, the situation was different from the aspect of entry barrier and Buyer. • Standing in the shoe of Apple, these two industries share a lot of similarities, and advantage of 11/26/2014

Smart Phone industry is not really substantial.

6

Strategy Analysis
-SWOT analysis
S

Strengths

O

Opportunities

cutting edge technology, multiple usage product
Locking AT&T
Premium price
Revenue sharing and subsidy with mobile phone
operators
• Integration with Apple ecosystem
SWOT •ANALYSIS
Brand recognition and marketing abilities












Main competitors were not doing good
 RIM: in March 2010 : 11th
 consecutive quarterly loss
 Nokia: No US carrier accepted to subsidy
Nokia phones
Cash generated allow to get vertical integration
Integration with payments services
Lower cost structure
More integration with Apple ecosystem and
presenting gadgets

W

Weaknesses

T

Threats

• No prior experience in radio technology
No control over grey market ( 1 Billion USD lost from
emerging markets)
• Relatively easy to unlock
• Weak presence in emerging markets
• Closed OS, development is limited to apple
• Strong suppliers power (processer, memory, touch
screen)
• Does not support Flash technology
• Locked outside markets of operators
• High relative price







Rising power of Android
 50 Android-based models in 2010 and Google
application Market
 Android as an open source OS allows third
party developers to enhance the system on a
faster rate than apple
Losing emerging markets
Easy to copy technology
Price competition

Strategy analysis
-iPhone innovation

Strategy analysis
-iPhone innovation

Strategy analysis
- iPhone as a new standards setter
• Elimination of a physical keyboard through introducing 3.5” touch screen
• Premium price.
• Low applications cost (99 Cents per app)

Strategy analysis
- iPhone profit generation
• iPhone 1: AT&T revenue sharing
• iPhone 2 and so on: Subsidy

Strategy analysis

- iPhone and AT&T alliance benefit
• AT&T generated average revenue per user (ARPU) through using iPhone of 95$ compared to 50$ of other operators.

Strategy analysis

- iPhone strategy shortcomings
• Decision to restrict iPhone to AT&T only in the US (which had a bad coverage in NY...
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