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Transcript of mgmt 324
4. How sustainable is Apple's competitive position in the market for MP3 Players.
5. How do you assess Apple's competitive position in the smartphone market?
6. What are the prospects for the IPad?
Personal Computer Industry
Apple is a premium brand computer that does not attempt to compete on price.
The company has reduced prices after some initial product launches.
It uses skimming and premium pricing strategies.
The Apple iPad is priced at a minimum of $499.
The Apple iPhone costs begin at $99.
The Apple Mac Book costs $999.
The Apple MacBook Pro is priced at $1199.
Apples iPad pricing strategy includes the flexibility to lower the prices if consumer response dictates such action.
This would be consistent with a similar $200 price cut on the iPhone in 2007.
In 2009 Apple announced a reduced cost pricing structure for iTunes - songs will cost 69 cents, 99 cents or $1.29. The "vast majority" of the songs will cost 69 cents. Changes are said to be a response to a slower pace of music downloads.
There several retail outlets that carry various Apple products so purchasing this product should not be difficult.
There are multiple Apple stores across the United States, 284 of them, in which these products will be sold.
Customers can also order the product online in Apple's website.
Best Buy, one of Apple's partners, also sells Apple products and also has a large retail footprint in the United States.
Amazon, one of the largest online retailers, also carries Apple products.
Outstanding products-distribution channals that can capture consumers in different segments.
Apple, Inc offers special discounts on refurbished MacIntosh computers, iPod Nanos, and the 8GB iPod Touch. In each case a 1 year warranty is included on the all products.
Apple, Inc authorized Training Centers are located throughout the U.S. each provides instruction in Mac systems, Mac OS X, and Apple’s professional applications. A wide range of certification exams and courses offer innovative learning opportunities for IT and creative professionals, educators, and service technicians—delivered exclusively by Apple Certified Trainers.
The Apple Consultants Network website provides a search tool allowing visitors to locate nearby certified Mac product consultants in the U.S, Canada, and a number of international locations.
The online Apple Store offers free shipping for orders over $50.
The online Apple store offers iTunes gift cards.
Apple provides a $100 rebate when you purchase a Mac or specific printer
Apple has packaged back-to-school offers, including some aimed at college students.
A true startup company that
was started by a couple of college
dropouts with a vision to make an easy, user-friendly computer.
Today Apple's mission statement focuses
solely on the goal to design the best
computers on the planet as
efficiently and humanely as possible
Top officials/executive management team
Director and CEO
: Timothy D. (Tim) Cook
Chairman of the board
: Arthur D. (Art) Levinson
: Dan Riccio
Apple's consumers fall into 5 categories:
home, small businesses, medium businesses, corporate, education, and government.
All Customers were very price sensitive.
Home users tended to value design, mobility, and wireless connectivity
Business Users tended to care more about a
balanced price that offered a solid service and support program that would be responsive and punctual.
Education Buyers depended on the
new and up and coming software availability
that enabled the ease of the teaching
and learning processes.
Apple's two fronted competition:
Personal Computers (PC's)
Sustainability Within PC Market
Apple's Competitive Advantage
1. What, historically, has been Apple's competitive advantage?
2. Analyze the personal computer industry. Are the dynamics favorable or problematic for Apple?
3. How sustainable is Apple's competitive position in PCs?
1. Apple’s Hardware + Software
High Product differentiation
2. Digital Asset Management
iTunes makes them one of the largest digital retailers in the world.
3. Apple's Retail Strategy
Apple stores & Big box retailers
Multiple Locations all over the world
1. Horizontal Integration Strategy
Devices and Channels
Apple Products Complement one another
2. Vertical Integration Strategy
2009 PC Manufacturers Market share
HP - 20.3%
Dell - 13.1%
Acer - 13.0%
Apple - 4.2%
Apple vs. Android
Apple and Android are two of the biggest competitors when it comes to personal electronic devices. Most all smart phones these days run of either an OSX or Android, as well as apple biggest competitor in the Music business when the Microsoft Zune was brought onto the market by in 2005.
Apple's future in Mp3 Market?
By 2010 Apple held more than 70% of the Mp3 Market.
Apple iTunes Revolutionized the Music Industry.
It's now the number 1 music store in the world.
113k per Q -> 733k per Q
Fairplay protected songs
Comp-> pandora, amazon, spotify etc
Response-> Lala.com, iPhone
Apple's Position in the Smartphone Industry
Before iPhone: Nokia, Motorola, Samsung = 60% Market share
2 years -> apples share = 30%
Apples Current market share is around -> 17% vs Android 68% globally
BUT -> Apple is currently building brand loyalty with Intstutions, because of security features
Future of iPad?
Before 2010 Amazon had 90% market share in Tablet Market.
Current data shows iPad is the Market leader at around 55% market share.
Androids Nexus 7 and Amazons kindle Fire are the Main competitors to the iPad.
Android currently powers 44% of tablets shipped
Apple could lose its top spot if these trends continue.
one of the most successful company in Electronic Computer Manufacturing industry
1 LexisNexis Academic website