Apple Inc

Apple’s competitive advantages: (1) Apple Inc. produces both hardware and software; (2) Apple's retail strategy. Apple Inc. has its own retail stores; (3) Apple products are easy to use; (4) Apple's design is elegant; (5) Not only does Apple produce PCs but also non-PC products: MP3 players, smartphones, and multimedia computer tablets; (6) built brand awareness, brand loyalty.

Personal computer industry: (1) Even though there has been constant volume growth within this industry since the 1980's, average selling prices tend to decline annually (p.4). That makes PC manufacturers lose profit margin (average profit margin fell below 5%. p. 4). (2) PC manufacturers are cutting spending on research and development due to the standardization of components (p.4). (3) New sub-products like netbooks and tablets emerged recently taking part of the PC market. All these tendencies within the industry wouldn't hurt Apple's sales much because Apple is positioning itself like a seller of both image & technology to customers who are less price-sensitive. Apple's prices are always higher than other vendor's prices; however, Apple's sales are growing even during the economic recession (Exhibit 1a).1 On the other hand, in a long run, if the recession lasts longer it eventually would influence Apple's sales as well.

Apple's competitive position. PC market: Apple has 4.2% of the PC sales worldwide (Exhibit 6). Its main competitors are industry leaders such as HP, Dell, Acer, Lenovo, and Toshiba. These companies are involved in intense price competition. Apple doesn't compete on price. It offers a nice design, unique software, and a full range of hardware for customers who are willing to pay more for these qualities. Industry leaders are keeping leading positions by acquiring smaller competitors (p. 5). Apple is working on delivering value to customers through new technologies, extra features, and design improvements. Apple spent 3% of its net sales on R&D in 2009 (Exhibit 1a), even...