Apple Company Analysis

1. Apple’s history of business reaches back to 1976. Since then, the company has developed specific competitive advantages that preliminary have led to a leadership role in the PC industry until market entrance of IBM in 1981: So Apple first established the so-called “Ease of use” computer and priced its products according to a premium price differentiation strategy. IBM’s market entrance has marked the decline of Apple’s competitiveness with regards to system openness and the product’s price structure: Compared to IBM, Apple has been very much vertically and horizontally integrated e.g. including the internal development of hardware design or avoiding licensing. During the 1990s Apple has firstly introduced the “Plug and Play” technology for an integration of hardware, software and peripherals. Apple focused on publishing and education industries and overall customer’s brand loyalty has been high. Nowadays, Apple operates as hardware and software company known for its good research capability and a fast development of innovative new products.

2. In 2008, approximately half of the market share in the global PC market was held by HP, Dell, Acer and Lenovo. Apple’s worldwide PC market share was approximately four percent. Buyer power in the PC industry is moderate as (1) there are offered highly differentiated products, (2) there are very large companies on the buyer side and (3) because of low switching costs by tendency. Contrarily there is little differentiation with regards to the underlying PC architecture. Even Apple is using Intel processors nowadays. Therefore, overall supplier power is low with the exception of CPU manufacturers like Intel or Microsoft as main supplier of operating systems (not the case for Apple). There have evolved possible substitutes like smartphones and game consoles with internet or wireless functionality, but by tendency these products can’t serve the general functions of a PC; As a consequence the threat of substitutes is moderate...