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Apple - Assignment Example

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The company developed the multimedia gadget, the iPod, which was the only one of the kind in the market. This made Apple grab the untapped…
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Apple Inc. Question The iPod-iTunes business has been a spectacular success. Has Jobs found a new formula to create a sustainable competitive advantage for Apple?
Steve Jobs found a new formula to enhance Apple’s competitive advantage by the use of multimedia tools, a distinguished Apple stronghold. The company developed the multimedia gadget, the iPod, which was the only one of the kind in the market. This made Apple grab the untapped market thus enhancing its advantage. Consequently, Apple was able to provide backup software and tools for the iPod such as the iTunes store that enables iPod owners to get the latest content on the web at the lowest cost. The bundle is rare and unique to Apple customers.
Initially, the iPods and the iTunes synchronized with Mac operating system only; however, Jobs thought that it would be in the best interest of the company’s market position to include Windows Operating Systems since it was becoming increasingly popular. This made the iPods and the iTunes the best bet for Apple’s success in the market.
The company encompassed multimedia player with access to music downloads from major recording house. The uniqueness of the technology can be analyzed through the Value, Rarity, Inimitable and Organization (VRIO).
From its inception, Apple has been making high value goods, hiring top performing executives and also serving high value markets. The iPod and the iTunes supplement apples quest for rare products that revolutionize technology. This is because the idea of two ideal multimedia tools would synchronize together to form a major technological breakthrough.
Apples competitive advantage also lies in the inimitable nature of its products. The products, from computers, phones, iPods and software, are not easily copied since hey use Apples exclusive technology. This enables Apple to be the sole maker of the products.
Question 2
How would you assess Apple’s initial strategy for the iPhone? Why did Apple change so quickly to a different strategy?
Apples initial strategy for the iPhone was disastrous. This was because the market had many other gadgets with higher capabilities that Apple’s iPhone, yet they were selling at relatively low prices. The price for and iPhone was much higher than other brands making sale to stall. Consequently, Apple preferred to make its own distributions with no carrier networks, usually used to subsidize costs. Apple ignored giant retailers ability to cover more market than its own distribution outlets.
Another issue that made Apple to change its strategy on the iPhone was the internet access capabilities. At the time, Third Generation (3G) service was the widely used by mobile phone manufacturers. Apple iPhones supported only 2G networks which was relatively slow. A rework on the iPhones was inevitable.
The need to catch up with changing internet access technologies forced Apple to start producing iPhones that had 3G mode. This would enhance their competitiveness among internet lovers. Consequently, the stalled sales made Steve Jobs to think of an alternative way to ‘fit’ into the market. The result of the change up was that apple entered into contract with AT&T to subsidize its mobile phones thus lowering the prices. Consequently, apple allowed big retailers such as Wal-Mart and Best Buy to distribute the iPhones. The iPhones also started to be distributed worldwide through private distributors, thereby reducing loses caused by black markets. This was a major market breakthrough for the iPhone and Apple at large.
References
Yoffie, D., & Slind, M. (2008). Apple Inc., 2008. Harvard Business School, 708(480), 1-24.
Zylla-Woellner, J. (2013). Business Analysis of Apple Inc. Germany: GRIN Verlag. Read More
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