What are the strategies of Apple Incorporated - Essay Example

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The opening of the thesis report consists of the background information about the Apple Incorporated. The discussion seeks to answer the question: What are the strategies of Apple Incorporated? What is the core of Apple from a product point of view? …
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What are the strategies of Apple Incorporated
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Download file to see previous pages Center of discussion in this paper is Apple as a very unique company because it dominated a market segment which is not its core business. Apple was launched in 1976 in a garage with Steve Wozniak and was able to revolutionize the computing industry with the introduction of its product line Macintosh (Mac) that “dramatically changed personal computing through its user-friendly graphical user interface (GUI), which allowed users to interact with screen images rather than merely typing text commands”. Apple’s success is not solely attributed to the creativity and functionality of its product line but also to its pricing strategy which has been a big change from the 1990s when consumers regarded Apple as a producer of overpriced tech baubles that cannot effectively compete against the far cheaper Windows PCs. This change was a result of a succesful implementation of its value chain activities that has significantly lowered its price. It became very pronounced with the launching of Ipad which price was far lower than what they expected. Its introductory price last year of $499 stunned everyone, which led John Gallaugher, an associate professor of information systems at Boston College to comment “It was a very competitively priced device”. The same is true in the notebook product line. When Macbook Air was introduced in 2008, it was priced at an exorbitant $1,799. This became possible by the briliant management of Apple’s supply chain due to capitalizing its organizational capability of having huge cash reserves. It made its supply chain a strategic weapon to lower price in order to capture the market. It tapped into its huge war chest of $82 billion in cash and marketable securities to lock up supplies of parts for years to enable it push down cost by the scale of its purchase (Wingfield, 2011). It also bought manufacturing capacity ahead of its time and made its components scarce that, in turn, made its competitors scrambling for any parts that are left and drove the cost of its products up while Apple had lowered its own (Wingfield, 2011). To date, Apple has been recorded as the biggest buyer of flash memory chips in the world according to the research firm iSuppli (Wingfield, 2011). The effect of using value chain management as a strategic weapon proved to be a nemesis among its competitors. When this effective value chain management was reflected in retail prices, competitors had to slash their prices where Motorola’s Xoom tablet was pushed to lower its price at $379 at Best Buy (for a limited time) and virtually won the competition with Hewlett-Packard’s TouchPad line of tablets which were pushed to be sold at $99 to clean the inventories. III. What is the core of Apple from a product point of view? The core product of Apple was its desktop computer Macintosh. Its main revenue source however comes from its other product line such as Ipad, Iphone and Ipod. IV. Are all products and services equal to Apple? If not what are the key pieces? Use your entire toolkit, especially the financials, to support your decision.  Apple Incorporated made itself distinct by making its hardware and software work in synergy that enabled its products and services unequalled by its competitors. The best example that we can show for this is the synergy that its operating system iOS5 that provide synergy among the different product lines of Apple. It powers the iPad, iPod and iPod touch which allows the three products to interact and complement each other. Its new computer operating system Lion also has an Air-drop feature that has made sharing of information between Mac computers very convenient. Air-drops peer ...Download file to see next pagesRead More
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