OPPapers.com

Apple Case Study

1. Historically, what were Apple's major competitive advantages?
Apple were a very successful company at maintaining competitive advantage over its main competitors, this success can be analysed in more detail using Porter's five forces model which is broken into:
1. The threat of substitute products
2. The threat of the entry of new competitors
3. The intensity of competitive rivalry
4. The bargaining power of customers
5. The bargaining power of suppliers
These are the five forces that determine the competitive intensity and therefore attractiveness of a market.

The threat of substitute products
Lev Grossman once commented that, "Apple is essentially operating its own closed miniature techno-economy." In other words Apple do everything for themselves, they produce their own hardware, software, operating systems and peripherals such as consumer electronics. This made it very difficult for competitors and new entrants to the market alike, to copy their ideas. There were many attempts to clone the Apple concept but none were successful, while other companies such as IBM fell victim to this. Apple promoted itself as a "hip" alternative, with colourful graphics, as opposed to the boring "green screen" of IBM. Apple also made it impossible for competitors in the MP3 player market to keep up with their cutting edge designs and ever evolving concepts, many competitors such as Dell were forced to pull out of the market.

The threat of the entry of new competitors
Apple had many new competitors enter the PC market, namely Dell and IBM, other smaller players such as Compaq and Gateway followed later. However, Apple were able to maintain customer loyalty and see off the threat of others. This began initially under the reign of John Sculley in 1990 who strived to become a low cost producer with mass-market appeal and also by bringing out "hit" products every 6 to 12 months. This helped Apple to constantly be at the forefront of the market. To facilitate the...