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Apple Case Study

2431 words - 10 pages

What were Apple's Competitive Advantages? At the outset, Apple had many competitive advantages that allowed it to become a profitable business. Apple's PCs relied on proprietary designs that only Apple could produce. When Apple developed the Macintosh, it was very easy to use, had an industrial design, and technical elegance. People craved these qualities in a PC, but the Mac was very slow and there was very few compatible programs due to the proprietary design. To combat this, Apple was able to tap into the corporate sector, as the Mac became the best PC with respect to desktop publishing. It was also able to hold more than 50% of the education sector. In addition, Apple was able to control the Mac completely in both hard ware and software. It was also able to develop its own peripherals that took advantage of a "plug and play" system1. Many of Apple's current competitive advantages can be linked to its initial competitive advantages. Users in today's world still value the user experience just like when the Mac was initially introduced. Thus, the current incarnations of Macs offer attractive design, ease of use, good security, and bundled software that all contributes to an "Everything-ready" system that is very easy to use1. The "plug and play" system is still in use, though right now, the Mac has incorporated current standards such as USB ports. Thus, the current Mac is a PC that "offers a cutting-edge, tightly integrated user experience," meeting the needs of most of the market1. In addition, Apple has introduced Apple stores, which offers its own unique retail experience, as people looked forward to a good shopping experience when buying computers. There was also a significant iPod "halo effect" which attracted people to these Apple Stores. This synergy along with iTunes definitely helped to boost sales of traditional PC systems from Apple. It is also fashionable to have an Apple computer, as a recent Microsoft Ad proclaims that some people are just "not cool enough to be a Mac person2." Analyze the Dynamics of the PC Industry. Are these Dynamics Favorable or Problematic for Apple? The PC market is extremely fast-changing, as it is currently penetrating into other aspects of peoples' lives, such as multimedia. Until 2000, there was a 15% annual increase in number of PCs. However, recently the market has slowed down, particularly the domestic market, as the annual growth rate is only 3%. This is in great contrast to the international PC market, as the annual PC growth rate has increased, with emerging markets such as Asia dominating. When Apple first started making PCs, the profit margins were extremely high. However, recently these profit margins have decreased dramatically, recently being less than 5% in 2007. Thus, this industry is highly competitive, containing other well known PC manufacturers such as Dell, Hewlett-Packard, Acer, and Lenovo. These manufacturers established Wintel as the industry standard1.The majority of the buyers are...

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