Apple in 2008

Executive Overview

Apple has been established for over 30 years since Steve Jobs and Steve Wozniak founded Apple Computer in 1976. During Steven Jobs’s tenure as CEO, Apple’s mission was to bring an easy-to-use computer to market. However, Apple was not performing as good as Jobs projected, so he resigned in 1985. In the following 12 years, Apple experienced three different CEO’s and still could not be brought back to life. Under John Sculley, Apple worked to drive down costs by switching much of its manufacturing to subcontractors. But these efforts were not enough to sustain Apple’s profitability. During the Michael Spindler years, international growth became a key objective for Apple. Yet despite Spindler’s efforts, Apple lost momentum. Soon after Gilbert Amelio replaced Spindler as CEO, he proclaimed that Apple would return to its premium-price differentiation strategy. Despite some austerity moves, Apple lost its competitiveness and could not regain its share in the market. In 1997, Steve Jobs came back again as the CEO of Apple. This time he had a new game plan, and Apple started to focus on the digital lifestyle for consumers. Internally, Jobs worked to streamline operations and to reinvigorate innovation. This proved to be Apple’s most successful business strategy to date because a once ineffective company now has ruled the computer world. In order to understand this situation, Apple's competitive advantages and industry forces must be analyzed.

Competitive Advantages

Apple has been in business since 1976, and has built quite a few competitive advantages along the way. Obviously, innovation has been at the forefront of Apple’s ability to compete in the world market. Other than that advantage, brand loyalty, product differentiation, superior quality, and retail strategy are also its advantages when competing with other brands.

Innovation

Steve Jobs and Steve Wozniak sparked the PC revolution, making the world of computers on Apple’s head. The Apple II launched in 1978 drove the PC industry to $1 billion in annual sales in less than three years. Even if initially regarded as a toy by many other businesses, Apple soon revealed itself as a feasible substitute to the traditional mainframe. It continued to demonstrate its ingenuity. For example, it was the first to introduce a computer with color, a graphical interface, and many other firsts. These inventions defined Apple and its business strategies. On the basis of its all bundled package of hardware and software, Apple became synonymous with usability.

Brand Loyalty

In 1998, Jobs recognized that customers really wanted a Macintosh. Apple's brand commitment is strong. Since 1970s, Apple user communities have been founded to connect together with enthusiasms.

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