Apple 2008 Case Study

Apple 2008

1.        Apple has had many competitive advantages in every area that they have worked in.  An overarching advantage that has been pervasive in all industries for Apple is the user friendliness.  The devices have been simple to use, and the customers really have enjoyed this. Apple has achieved this by implementing things such as plug and play, which makes it easy to add hardware without using a wizard.  According to the case study, “The majority of IBM and compatible users ‘put up’ with their machines, but Apple’s customers ‘love’ their Macs.” They sell these points by using slogans like, “it just works.” Apple also focuses a lot of their attention on design. The company uses different materials in order to differentiate its products from the competitors.         

2.        The PC market is a great industry to analyze with the Porter Model. When is comes to the threat of new entrants the risk is low.  There are high barriers to entry due the fact that it is a mature market that has many companies with strong holds on the market share. The bargaining power of the customers is very high due to the amount of competition that is in the market. The customer has many options in the PC market to choose from.  The bargaining power of the suppliers is very low though. PC producers have many options as to where they can purchase the parts necessary to make their computers. Threat of substitutes has become very high in the PC market with the huge emergence of smartphones and tablets. Many tablets have the full functionality of PCs and boast more features. As already stated there is a lot of competition in the industry already.

3.        The structure is problematic for Apple. At one point the structure almost put Apple out of business. Since the industry is very difficult to compete in Apple’s market share fell to 3% before Steve Jobs returned. In order for Apple to make a comeback, the company would need to work extremely hard in an industry structured like this in order to differentiate its products and find a sector to sell them.

4.        Apple did this because the current suppliers could not meet the level of performance that Intel had achieved. The current chips had poor efficiency that burned a lot of energy, which was bad for battery life of laptop computers, which in turn kept Apple from advancing its laptop computer industry. Since portable machines were becoming a larger area of interest and profit for computer companies, Apple needed to move to Intel.
        Intel also allowed Mac products to run parallel operating systems like Windows. This was a huge selling point for the Apple computers because it was of the biggest complaints about their products. These reasons led to Apple having to move over to the Intel chips.