Apple, Case Study Example

Apple’s release of Apple II in 1978 helped start the PC revolution which eventually resulted in PC industry’s combined sales of $1 billion in less than three years. Even though Apple was the first industry leader, the competitive landscape changed with the entry of IBM PC which used Microsoft’s relatively open DOS operating system as well as Intel’s CPU. Unlike other players in the market which either focused on hardware or software, Apple developed both its own hardware and software in order to provide superior experience to the users. In addition, unlike DOS’ relatively open nature as well as Microsoft’s generous licensing policy, Apple didn’t license its operating system to a third party. The software developers also responded to emergence of IBM PC by developing compatible applications. In contrast, Apple’s later product Macintosh suffered from low processor speed and lack of compatible software despite superior design and user interface.

Apple was inflicted with more damage as economies of scale allowed IBM-compatible PCs to significantly decline in price unlike Apple’s Mac which became even less attraction proposition to customers now. While Apple’s users loved their Macs unlike many IBM-compatible PC users, Apple’s products’ high prices didn’t make them suitable for the masses, hence, Apple’s historical struggle in the PC markets.

Steve Jobs’ second tenure was nothing short of a miracle for Apple as Apple introduced at least three revolutionary and market-defining products under Jobs’ leadership called iPod, iPhone, and iPad. Under Jobs’ second tenure, Apple established itself as a market leader in terms of product innovation and also set itself apart from the other industry players. Apple’s products were so ahead of time and by the time competition would catch up, company would have introduced another revolutionary product. It almost seemed Apple’s competitive position in PCs, smart phones, and tablets was sustainable But things have significantly changed now. Apple’s competitive advantage is not sustainable not only because there are many competitors but also because they are fast catching up with Apple. As far as PC sector is concerned, consolidation has been taking place in the industry, giving birth to new powerful competitors with greater resources such as Lenovo and Acer.

As far as iPod is concerned, one of its greatest attractions is the iTunes store but now rivals like Amazon have opened their own libraries with extensive collections. Similarly, the company conquered the smart phone market due to both innovative features and design as well as extensive app library but an operating system called Android soon emerged as a serious competitor and has given boost to hardware manufacturers like Samsung since Android’s apps library rivals iTunes now. As far as iPad is concerned, Apple faces greatest competition from Amazon which has introduced its own sleek e-reader which also has certain tablet device features, especially Kindle Fire.

We are almost witnessing history repeating itself. Apple comes with a revolutionary product but opts for closed system and closely guards proprietary hardware and software. The competition benefits from open system and unlike Apple, most choose to specialize either in hardware or software but not both. Even though Apple’s innovative products and superior user experience provide it with an edge in the beginning, Apple’s unique business model soon becomes its greatest enemy because the company finds itself focusing on too many things and competing with too many rivals who take more focused approach to competition instead of trying to do everything by themselves. If Apple wants to stick with its traditional business model, its best option is to keep producing new revolutionary products and use the short time gap to earn high profit margins before the competition finally catches up. Thus, Apple’s best alternative is to use its core competency of innovation to keep creating temporary episodes of sustainable advantage.