The PC industry is highly competitive and constantly changing as technology evolves and customer needs change. Some of the top competitors in the PC industry are IBM, Hewlett-Packard, Dell and Apple. Theses rivals are constantly jockeying for the top competitor’s position. They compete in prices, product innovation, advertising, etc.
In the early 1980s the top competitor in this industry was IBM due to its open system and ease of being cloned. During this same time, Apple struggled to keep pace and changed its competitive strategy multiple times. From 1980 to 1993 Apple positioned itself in the computer industry as the company that provides easy to use desktops with superior software and hardware. Unlike its competitors, Apple did not use “open systems that other producers could clone; instead they practiced horizontal and vertical integration and used Apple’s own proprietary design” (Pearce, 2013). It is this strategy that held the company back. Open systems were popular within the industry and customers enjoyed the flexibility of the systems
From 1980 to 1996, Apple’s competitive range in the PC industry was rocky. Although Apples products were unique and well built, they were overpriced compared to competing products from IBM and others. As competitor prices dropped, Apple prices stayed the same and the company saw a decline in sales as customers opted to purchase from its competitors. John Sculley, former CEO of Apple, took many steps to improve the company’s competitive advantage. One of those steps was to compete with price by producing a low-cost computers that appealed to a mass-market. The second step was to form an alliance with rivals IBM and Novel in order to create new operating systems and applications. “These projects, coupled with an ambition to bring out new hit products every 6 to 12 months, led a full scale assault on the PC industry” (Pearce, 2013). Despite these initiatives, Apple’s competitive range was mediocre compared to its competitors.
The next strategy was to return to an old business practice which was Apples premium prices. But this strategy, like the others, did not boost the company’s competitive advantage.
In 1997, Steve Jobs returned to Apple as an advisory and with the purposes of reshaping the product line. The changes made by Jobs resulted in increased sales and $309 million in profits. Job changed the mindset of Apples management and development team. He encourage them to have the “think different” management style that promotes the development of products that are ahead of the technology and design curve, and a creative retail strategy. It is this strategy that would eventually make Apple the best-selling company in the PC industry.
Jobs also changed the pricing strategy and focused on value-based pricing that provided customers with premium products at a premium price. Product pricing has specifically set Apple apart from its competitors. Apple believed that they could create...