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Issues and Outlook: 1999 and Beyond

Issues and Outlook: 1999 and Beyond. Is Apple successful? Past/current strategy? What are the main concerns/issues that confront Apple? Where is Apple headed in the future?. Apple’s Business Level Strategy. Source of Competitive Advantage. Cost. Uniqueness. Cost Leadership. Differen-

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Issues and Outlook: 1999 and Beyond

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  1. Issues and Outlook:1999 and Beyond • Is Apple successful? • Past/current strategy? • What are the main concerns/issues that confront Apple? • Where is Apple headed in the future?

  2. Apple’s Business Level Strategy Source of Competitive Advantage Cost Uniqueness Cost Leadership Differen- tiation Broad Target Market Breadth of Competitive Scope Focused Differen- tiation Focused Low Cost Narrow Target Market

  3. Internal Analysis • Resource-based View Analysis of: • Core Competencies • Core Weaknesses • Value Chain Analysis of: • Value-enhancing Activities • Value-diminishing Activities • Promoters of / Barriers to Change

  4. Value Chain Analysis Firm Infrastructure Human Resource Management Support Activities MARGIN Technological Development Procurement Service Inbound Logistics Marketing & Sales Outbound Logistics MARGIN Operations Primary Activities

  5. External Analysis • Influences from Remote Environment • Influences from Competitive Environment • Promoters of / Barriers to Change • SWOT Summary • Competitor Analysis

  6. Analysis of the Competitive Environment Threat of New Entrants Threat of New Entrants Rivalry Among Competing Firms in Industry Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products

  7. Strategic Group Map Pre-Windows Premium Sun Apple Price Compaq IBM Clones Low Broad Narrow Strategic Focus - Differentiation

  8. Strategic Group Map Post-Windows Premium Sun Apple Price Compaq IBM Clones Low Broad Narrow Strategic Focus - Differentiation

  9. New Products

  10. Rebound?

  11. “Apple ………………………………..” Definition of Industry Description of Core Values Description of Basic Strategic Approach General Identification of Customer Base Revised Mission/Intent Statement

  12. Revised Mission • To position Apple as the world leader in man-machine interfaces though the development of ergo- and cerebro-nomic software and interface devices required for electronic and electromechanical applications.

  13. Goals • 20% ROS by 2003 • 40% Share of O/S Market by 2003 • Develop 3 New Interface Devices by 2002 • Achieve full interoperability with • Intel and AMD microprocessors by 2002 • Top 4 Software Vendors by 2002

  14. Milk Hardware • No new manufacturing and R&D investment in existing hardware products • Outsource next 3 years’ production to Malaysia: • Send VP Mfg. and 3 Engineers on “Sourcing Mission” Benefit: Decrease COGS from 53% to 33%

  15. Apple Core • “Open system” O/S • not processor specific • head-to-head with Windows, UNIX and LINUX • increase installed base • increase ISV applications • Shift 80% of R&D budget to Core Benefit: Increase ROS from 5% to 20% (NOTE: O/S production has COGS average 19% percent of sales vs. 66% in hardware manufacturing.)

  16. New OS (Apple Core) Applications Wearable Computers Robotics Handhelds Automotive Systems Office Machinery

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