Development and Analysis to Apple Incorporated - Case Study Example

? Development and Analysis of two mini case studies AFFILIATION: Development and Analysis of Two Mini Case Studies Mini Case Study of Apple Inc. Apple Computer was started by Steve Wozniak and Steve Jobs who were college dropouts and about 20 years of age in 1976. In late 1980s, the company grew to become a strong brand in the market with rapid growth rate and substantial high amount of profit; at that time, Apple almost went bankrupt in year 1996 as there were some problems within the management. In 2000’s, Jobs changed the name of company to Apple Inc. with aim of being most innovative company with technologically advanced products that entered the market of mobile industry so that it can differentiate itself from PC industry (Fuller, 2010). It was successful in making its name in mobile device company in 2010. By the end of 2009, Apple grew to become fourth largest vendor of PC in the market of United States with market share of about 8%. According to Mishra (2011), Apple had market capitalization of about $220 billion in spring of 2010. Apple has mostly implemented multi-million dollar marketing campaigns like the most successful ads by slogan “Think Different” and it promoted itself as a well-known alternative for computer and mobile device industries. The company highlighted itself as the world’s “greenest lineup of notebooks”. According to Kim and Mauborgne (2009), the primary goal of Apple is to differentiate its products and intense competition in the PC and mobile device industry. However, Apple faced some challenges when management and employees were having different opinions about running the company and they even missed some opportunities which impacted its competitive advantage and gave clear path to companies such as Dell, Gateway and Microsoft. Other failures that were faced by the company in its initial operational years comprised of design crime which meant it focuses on synonymous designs i.e. sleek and sexy and when it deviates from it some problems are encountered such as in 1998 the hockey puck which was colorful and translucent and 1997 20th anniversary Mac which was a bronze-colored monstrosity failed in the market; iWay or Highway approach by Jobs till 1997 made Apple lose its market share to Android as people wanted to freely use their iPhones and iPads and its attempt to target professional market by launching the Pippin, the Macintosh Portable, the invasion of the Mac clones and the Newton MessagePad; all were failure products (Pitta & Pitta, 2012; Tynan, 2011). Apple Inc. now operates in various lines of computer and music industries; it designs as well as manufactures all of its computers and software. It was ventured into the music world by marketing its products such as iPod, iTunes and digital music player (Al-Rubaie, 2010). The main target market of Apple comprises of home users, small and medium sized businesses along with education segment that comprises of younger generation and creative individuals. Apple retail store has successfully captured its target market’s attention and helped it in offering direct access to its products and software. According to McGee, Thomas, and Wilson (2005), strategy used by Apple is differentiation strategy as it believes in providing innovative products to its target market that are developed with cutting edge technology. Recently, Apple won its case against Samsung in which it charged Samsung for copying the design of iPhones. According to Gahran (2012), the jury of much-hyped Apple versus Samsung patent infringement lawsuit handed down the verdict in which Apple was given everything that it wanted which was a billion dollar payment from Samsung and possibility of injunction against sales of infringement of Samsung smartphones and tablets. The main critical success factors of Apple are that it has well integrated computer systems; AirPort Express is a package offered by the company that comprises of print spooler, audio, bridging and Ethernet; subcontracting of its manufacturing to third party sources so that it can focus on its core competencies of research and development of software; most efficient distribution network both in physical stores and proper distribution of its iTunes and music software products; products are introduced after analyzing the needs and demands of customers and best team of management and employees for being successful in mobile device and computer industry (Mishra, 2011; Sandmeier, Morrison, & Gassmann, 2010). Mini Case of Microsoft Corporation Microsoft Corporation is the Multinational Company which has been in the market since 1975. It entered the market with the aim of providing home computers so that people could easily exchange the information and work process becomes smoother. The pioneer in the computer industry has introduced numerous products in the market taking advantage of the technological breakthroughs happening in the world. The company is well-known for the best range of products that it introduces in the market and it has diversified itself strategically into various other industries. As of 2012 as reported by Eichenwald (2012), the company is dominating the markets of both operating systems for the PCs and office suite with Microsoft Office. It has its strong presence in other areas such as internet search engine (Bing), market of digital services (MSN), mobile phones especially smart phones (Windows Phone OS) and also launched Xbox and Xbox 360 to enter the video game consoles industry. It is expected that company will enter the PC market of vendors this year by launching Microsoft Surface tablet computer. Some of the challenges that the corporation faced comprised of unethical marketing tactics by forcing its suppliers to supply the raw materials to only their organization; violating the anti-competitive strategies such as taking advantage of monopolistic position and putting restrictions on the use of its software and etc. In 2002, company faced intense problems in its organization as the corporate culture transferred into a bureaucratic one in which profit making was the main aim of the management team (O’Sullivan, Abela & Hutchinson, 2009). Although the company introduced the concept of touch screen mobile phones in the market, it proved to be unsuccessful one as there were a lot of internal conflicts going on within the organization. The company failed in getting its market share by introducing this innovative product in the market as it lacked quality; realizing its mistake, organization had to undergo drastic changes so that its performance got enhanced in the long-run (Schipanova, 2008). Microsoft started viewing itself as the market leader in technological world and when Apple launched iPhone in the market with software similar to those offered by the company; it was a big setback for it. The market share of the company started moving to Apple and it was even successful in getting attention from its customers for Apple’s PC related products. In 2006, Microsoft launched its music player called Zune but it was unable to capture targeted market share as iPhone was released by Apple that had mobile phone, music player and camera along with other features that were not present in Zune. As a result, Zune was a product failure of Microsoft. Likewise, Tiger which was the operating system of Apple was superior in quality than that of Microsoft’s operating system. Similarly, its Internet search engine i.e. Bing has been not so much successful in competing neck to neck with Google (Cooper & Edgett, 2008). Hence, Microsoft is still striving hard to maintain its market share in the market by focusing on innovative product development and shift its focus from profit making to follow a clear and focused strategy. Cross-Case Analysis The critical success factors on the basis of which comparison between the strategy implication will be done among Apple Inc. and Microsoft Corporation will comprise of Product innovation, technological advancement, market survey, managerial creativity, regulatory framework and emergence of consumer needs. All these factors are crucial for those organizations that want to successfully prosper in PC, mobile device and Internet communication industries. In each and every case, it has been highlighted that companies that keep an eye on their environment and competitive moves are able to succeed in this tough and dynamic environment. Every organization needs to be proactive and remain alert about changes and developments in the surrounding so that they can be incorporated in the strategy. The success or failure of a company’s strategy is largely dependent on its vision, mission, and objectives to be achieved and close watch on competitors’ strategy. The strategy of competitors can be largely depicted from information that is available on their website and even from social networking sites. Although Microsoft has been the leader of technological world but there have been some deviations in its strategy when it shifted its focus from identifying customers’ needs to behaving like a business that is profitable by limiting its approach to its business. Success: Apple Inc. Failures: Microsoft Corporation Critical Success Factors Similarities Innovative products were developed keeping in mind the needs and demands of consumers that were simpler to use All products were innovative that were developed in accordance with the target market’s needs but with the aim of profit making business Product Innovation Strategic alliances are must to get sufficient market share and has developed them with IBM, Microsoft Dell and other companies Likewise, strategic alliances have been developed with Apple, Android, Intel and other leading brands in technological world Strategic Alliances Management team of Apple allows its employees to take calculated risk Microsoft’s management team believes in launching only successive products in the market with less chances of failure Managerial leadership It started its business as PC manufacturer, expanded into mobile device industry with smart phones and Internet facilities. Entered the market with cutting edge computer hardware and software, then expanded into mobile industry and online Internet industry Expansion into other industries Favorable rules and regulations for making successive advancements in respective industries Availing the opportunity of developing new innovative products by taking advantage of relaxed regulatory framework Regulatory Framework Differences Products are developed with the aim of providing user friendly options and that provide most amazing experience to the users Products are developed that will help the company in moving ahead in the industry and will contribute to its profitable growth Product Development Any new demands of customers are identified on an ongoing basis by asking questions within the organization so that new ideas can be shared Consumers’ needs are researched but only those products are introduced that management team considers best for the company Emergence of consumers’ needs Apple takes calculated risk and enter new markets boldly with the aim of creating new business models such as iPod, iPhone and iTunes Company tends to focus risk averse strategy and enters new markets after doing extensive research Risk taking power Jobs believe that if there are questions, only then innovation can be achieved. More questions, better answers is the policy followed by Apple Microsoft behaves like business corporation with the purpose of following strategic direction and not experimenting too much with new ideas Question asking policy No licensing policy was implemented to provide easy access to customers to their software Licensing of software was mandatory to ensure that customers were provided exclusivity Licensing of software Conclusion The analysis of both Apple Inc. and Microsoft Corporation reveals that organizations that follow a focused strategy for their success are able to capture market more favorably than its competitors. In order to compete in the market, companies need to ensure that they try to create new business models and capture the landscape that is changing at a constant pace. The market share should grow with buyers as they grow and they should be offered multiple products so that they can buy more of a company’s products. Both Apple and Microsoft have learned from their mistakes and are ensuring that they follow the right strategy so that they can prosper in their respective industries. References Al-Rubaie, A. (2010). Apple Innovation: A case study. Retrieved September 6, 2012 from http://events.kustar.ac.ae/EBTIC/Techical%20Notes/slides/Session%202%20Apple.pdf Cooper, R.G., & Edgett, S.J. (2008). Maximizing productivity in product innovation. Research Technology Management, 51(2), 47-58. Eichenwald, K. (2012). Microsoft’s Lost Decade. Retrieved September 6, 2012 from http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer Fuller, J. (2010). Refining virtual co-creation from a consumer perspective. California Management Review, 52(2), 98-122. Grahan, A. (2012). What the Apple vs. Samsung Lawsuit Means for the Future of Smartphone Design. [Web blog comment] Retrieved September 6, 2012 from http://www.entrepreneur.com/blog/224289 Kim, W.C., & Mauborgne, R. (2009). How strategy shapes structure. Harvard Business Review, 87(9), 72-80. McGee, J., Thomas, H., & Wilson, D. (2005). Strategy: Analysis and Practice. London: McGraw-Hill Education. Mishra, D. (2011). Apple Inc.: A case study. Retrieved September 6, 2012 from http://www.slideshare.net/divya-mishra/midterm-part-ii O’Sullivan, D., Abela, A.V., & Hutchinson, M. (2009). Marketing performance measurement and firm performance: evidence from the European high technology sector. European Journal of Marketing, 43(5/6), pp. 843-62. Pitta, D., & Pitta, E. (2012).Transforming the nature and scope of new product development. Journal of Product & Brand Management, 21/1, 35-46. doi: 10.1108/10610421211203097 Sandmeier, P., Morrison, P.D., & Gassmann, O. (2010). Integrating customers in product innovation: lessons from industrial development contractors and in-house contractors in rapidly changing customer markets. Creativity & Innovation Management, 19(2), 89-106. Schipanova, M. (2008). Competing in Times of Convergence: The Use of Strategic Alliances by Nokia, Apple and Google. Retrieved September 6, 2012 from http://studenttheses.cbs.dk/bitstream/handle/10417/1057/marina_shchipanova.pdf?sequence=1 Tynan, D. (2011). Apple's greatest triumphs and worst failures. Retrieved September 6, 2012 from http://www.itworld.com/it-managementstrategy/192487/apples-greatest-triumphs-and-worst-failures Read More