Computer Industry

Apple

1. What, historically, have been competitive advantages and positioning?

* Due to devotion of research and development, Apple could make innovative technology and many patents, compared to competitors. For example, Apple is pioneer of touch device of smartphone and MP3 players.

* Jobs’ continuous efforts to change brand image from Apple’s tired and old fashioned image to innovative cultural force made Apple fashionable brand image in PC industry. For example, Apple’s aggressive advertising attributed to catch consumers’ attraction.

* Having retail stores and providing a strong after service boosted its sales. About 16% of revenue is from retail stores. And highly educated staffs provided one on one services to its consumers.

* First mover advantages gave solid market shares.

2. Analyze the Personal Computer industry. Are there dynamics favorable or problematic for Apple?

* PC industry is highly concentrated with large companies. Existing companies such as Dell, Acer, and Lenovo compete severely each other with the standardized product. Even though the size of PC industry is huge, average profit margin has been decreased because average selling prices (ASPs) declined continuously and prices for key components such as CPUs, memory and hard disk drives decreased as well. This condition would be favorable for Apple unlike other PC manufacturers due to differentiation of Macintosh’s Digital Hub.

* Four large PC manufacturers account for more than half of worldwide shipments. HP was competitive advantage of selling outside of U.S. and also of retail stores of worldwide outlets. Unlike HP, Dell struggled with sales due to failure of catching consumer trend. Acer, which is third largest PC manufacturer benefited after acquiring other PC companies. Lenovo, which also acquired a PC company, had dominant position in China. This condition would be unfavorable for Apple, due to fierce competition of existing large companies.

* Potential...