Apple inc. In 2010 Harvard Case Solution & Analysis

Case Description

Apple Inc. the world’s renowned technology brand t6hat deals in electronic appliance and rely heavily on innovation has comea long way with its product innovation and development. The company has witnessed success in every segment and rather competing in any segment, the company always dedicated its focus towards creating a new segment. However, the company launched a new product “iPad” in the year 2010 which is the third major innovation that the company introduced in the last decade.

The company has grabbed laurels under the visionary leadership of Steve Jobs; the founder of Apple Inc. Steve Jobs identified new segments besides PC industry and thrived successfully with products in the non-PC business. iPhone and iPod are the two major examples of the successful innovation that helped the company strengthening its brand image and market share.

However, the company is facing challenges in the different segments it is competing due to the emergence of new players and growing competitors. The market share of the company in Macintosh is declining and with the emergence of new players the iPhone is also facing challenges. The same situation is with an iPod, which is also facing critical challenges in sustaining its market share.

Problem Statement

Steve Jobs has to recognize the challenges that the company is facing in the PC market, iPhone and iPod segment. Besides that, he also needs to assess the opportunity that can be exploited leveraging the new innovation in the form of iPad.

Plan of Analysis

The plan of analysis first of all accompanies Porter’s Five Forces to analyze the strategy as these are the forces that guide a firm to shape its strategy. Secondly, the SWOT analysis will be conducted to highlight the strengths and weaknesses of the company along with the opportunities and threats present for the company. Lastly, the Ansoff matrix will be used to highlight the different levels of progression that company has utilized during all these years.


Porter’s Five Forces

Using the Porter’s Five Forces analysis the trends that are common and significant in the industry will be analyzed to gain a deep understanding of the threats present for Apple’s iPhone.

Bargaining Power of Buyers

Apple as suggested is a company that targets people that are mostly affiliated with technology or are heavy users of technology. Secondly, the company in all these years did a great job in targeting its customers and grabbing or gaining their trust. Therefore, the company has acquired a huge customer loyalty and has acquired a significant place in the consumer's consideration set. This scenario suggests that consumers or the buyers in the industry don't have the power to bargain as there are very few providers of highly efficient and innovative products. This aspect is also supported by the stronghold of Apple in the industry that has always focused on developing new segments in the industry to gain first mover advantage that gives buyers a very minimal chance to bargain.

Bargaining Power of Suppliers

Suppliers in the industry don’t have the luxury to claim high prices or bargain as there are ample suppliers for small chips and other materials required. However, Apple also maintained good relationships with their suppliers and is seeking different materials from different suppliers. Therefore, it can easily be stated that the players in the industry face no threat from suppliers and can easily switch a supplier due to low switching cost.

Threat of New Entrant

The industry has significant entry barriers that discourage new entrants from entering the market. One of the most important barriers is the investment or the startup cost that needs to be ample and heavy as the industry is highly dependent on technology. Secondly assessing new and innovate technology and huge investment in research and development to create product differentiation is also a difficult task. Therefore, it can easily be stated that there is no threat of new entrants, although the consumer electronics industry is highly lucrative, and there are ample opportunities. Besides that the companies operating in the industry have a vast experience and settled consumer base. Therefore grabbing new consumers and gaining a market share will be a challenging task for the new players.

Threat of Substitutes

Currently, the iPhone is a new and pleasant innovation and has opened a new segment of the smart phone market therefore currently the industry has no substitutes. However, viewing the overall industry the substitutes are present but do not present a significant threat to the industry or any player especially Apple........................................

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