2008 Apple Case Study

​Executive Summary:

Through our analysis of the Apple case, we found two problems that really stuck out. These problems were created by the same business decision made by Apple in its release of the IPhone in 2007. Apple made the decision to restrict the IPhone to a single network, in this case AT&T. The first problem that occurred was the threat of rivalry. Because Apple only used the one network, it allowed competitors to jump in the market easily. The second problem, the threat of powerful buyers, occurred because of this rivalry. Because so many different competitors were able to jump in the market and get their product out there, consumers slowly gained power because they could pick and choose every detail for the lowest price. For this reason, Apple probably didn’t make as much money as they could have if they just took a different approach to their initial release of the IPhone. Our proposed solution, based on our strategic analysis, was to allow the IPhone to be used on multiple different networks, rather than just the one. We believe that this would have cut back on the “grey market” sales referred to in the text, which in turn would increase Apple’s revenues.

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Problem Identification:

From the beginning of Apples inception there have been many highs and lows for both the company and the customers that purchase Apple products. This up and down behavior demonstrated by the company was correct to a steady climb upwards in almost every area from development to integration and, in turn, to increasing market share. The two problems identified by this group are from Porters Five forces Model, the threat of Rivalry and the threat of Powerful Buyers. We defined these as problems because in these certain areas, the higher the threat is the lower the average profit is.  In our analysis, the problems were created by the same business decision made by Apple in its release of the IPhone in 2007. Apple made the decision to restrict the IPhone to a single network, in this case AT&T. What this did was allow Apple’s Rivals to introduce their products into the market that would be able to compete with the IPhone, however, give consumers a choice of networks to use. Thus, the two problems that arose from this decision are the threat of rivalry and the threat of powerful buyer’s. As the case cited, many people purchased an ITouch and continued to stay on with their current phone carrier, which reduced the number of IPhone’s in the market. This also allowed Apple’s competitors to market against issues that the IPhone was having such as short battery