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Apple Inc: iPods & iTunes

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by

Mia Harris

on 30 October 2013

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Transcript of Apple Inc: iPods & iTunes

Winners:
Losers:
Distributive Technology:
SWOT
Analysis
Strengths
Weaknesses
Opportunities
Threats
Leading innovator in mobile technology
Superior Products & Standards
Compact & Simple to Operate
Loyal Customers
Brand Distinction
New products: Glitches & Technology Flaws
Incompatibility with different OS
Decreasing market share
High price
Apple iLife Application
Apple TV Launch
Obtaining patents through acquisitions
Increasing demand for cloud based services
Large number of competitors
Entry of record labels
Laws/regulation
High market profile
Powerful design features
File selection greatly reduced
Antagonistic relationship with record labels
Consumer-to-consumer computing
Transition from a free to a pay model
Online entertainment trends
Potential for alliances with record labels
No focused strategy for record labels
Rapid technological change
Android OS growth
Growing International Market
Competitors moves in online music market
Challenges
Quality products
User-friendly interface to download music
Buy one song at a time vs. whole album
Can transfer between devices using Apple software (iTunes)
Large storage capacity
Portability and convenience
Iconic Consumer Brand: reputation for developing innovative products “Apple Way of Life”
Limited quantity (exclusivity) = ↑ Demand
Owning the music you download

Winners:
Value & Resources
Apple iPad, iPhone & iPod
MAC OS Developers
The Music Industry
Twitter
Verizon
Google & Android OS

Losers:
Record Labels
Producers

Apple Inc:
iPods & iTunes

Before Napster:
Apple
convenience and free music
Low cost

Napster
Production of music
The way to own the music you want

Record Labels
Continuous Innovation
More Testing of Technology
More Customer Support
Less frequent upgrades
Government Involvement
Consumer Education
Eliminate Album Model

Solutions
Continuous Innovation
New disruptive technology
New way of marketing music
Accepting Piracy
Addressing the Challenge
Weaknesses
Challenge
Decrease of Stock and Profits
Loss of Competitive Advantage
Stagnant Innovation
Glitches in Technology
Piracy
Ease of Free Music

Symptoms
Music Industry failure to adapt to changes in technology and consumer demands

Problems with suggested solutions
Higher costs
Difficulties in monetizing piracy
Risk of failure with new technological developments
Change is hard
Contingency Plan
Fight Piracy
Record labels - Cost Leadership Strategy
Who: Everyone
What: Music
How: Creating, Promoting & Selling Music
Napster - Focused Cost Leadership Strategy
Who: Computer Savvy Music Lovers
What: Free Digital Downloads Peer-to-Peer
How: By creating and maintaining P2P file transferring service
Apple - Differentiated Focus
Who: Higher Income people who are looking to be "cool", have money to spend on the newer technology
What: Hardware and Software to support listening to music
How: Ability to purchase one song vs. an album


Business Model’s of Music Industry
Before NAPSTER
Barriers to Entry: High
Bargaining Power of Buyers: Low
Bargaining Power of Suppliers: Low
Substitute Products: Low
Rivalry between firms: Medium
Complementors: Medium
Political
FCC
Copyright
Piracy
Economic
More profit available
Social
CD's
Technology
Walkman/Discman
CDs
MP3

Political
FCC
Copyright –larger issue
Piracy- larger issue
Economic
Less profits
Social
Less CD sales / Digital Music Sales
Buying songs individually
Acceptance of Piracy
Technology
Internet
MP3 players
Online music

After NAPSTER
Barriers to entry: Medium to High
Bargaining Power of Buyers: High
Bargaining Power of Suppliers: Medium
Substitute Products: High
Rivalry between firms: High
Complimentors: High
Apple
Quality products
User-friendly interface to download music
Can transfer between devices using Apple software (iTunes)
Large storage capacity
Portability and convenience
Iconic Consumer Brand: reputation for developing innovative products “Apple Way of Life”
Limited quantity (exclusivity) = ↑ Demand
Owning the music you download

Record Labels
Production of music
Consumers are able to own the music they listen to
Napster
Convenience
Low cost
Apple
Customer Support
OS Developers
Knowledgeable Employees
Napster
Software
Innovative ideas
Record Labels
Artists / Musicians
Music Rights
SWOT
Analysis
Strengths
Original design and operating systems
High quality & superior product standards
Compact & simple to operate products
Loyal customers who purchase its products for quality, regardless of price
Brand distinction and profitable
Free and accessible to everyone
High market profile
Powerful design features
Weaknesses
Price
Many glitches and technology flaws
Frequent model upgrades
File selection greatly reduced
Antagonistic relationship with record labels
Peer-to-Peer computing
Transition from a free to a pay model
Apple iLife application
Apple TV
iTunes radio
Growing International market in Asia

Online entertainment trends
MP3 Standard
Opportunities
Threats
Losing mobile market share from Android and Microsoft
Computer Hardware Competitors
Large number of competitors
Entry of record labels
Laws/regulation
Challenge
Music Industry failure to adapt to changes in technology and consumer demands
Symptoms
Decrease of Stock and Profits
Loss of Competitive Advantage
Stagnant Innovation
Glitches in Technology
Piracy
Ease of Free Music
Solutions
Continuous Innovation
More Testing of Technology
Customer Responsiveness
Less frequent upgrades
Government Involvement
Consumer Education
Eliminate Album Model
Continuous Innovation
New disruptive technology
New way of marketing music
Accepting Piracy
Addressing the Challenge
Higher costs
Difficulties in monetizing piracy
Risk of failure with new technological developments
Change is hard
Problems with suggested solutions
Fight Piracy
Contingency Plan
Values Provided
Full transcript