Apple Hbr Case Study QuestionsApple Hbr Case Study QuestionsApple Assignment 2007/2008Historically, what were Apple’s major competitive advantages?Industrial design/Hardware design.Apples focus and vision.Integrated approach with software, hardware and service.Patents covering technology, “look and feel”, interfaces and methods.Strong legal team to enforce the above.Dedicated market shares.Ease of use.Strong brand.Brand loyalty.Marketing.Steve Jobs.Analyse the structure of the personal computer industry over the last 15 years. How have the dynamics of the PC industry changed?At the beginning of the 1990s the structure of the personal computer industry changed dramatically after several decades of relative stability. IBM dominance of the PC industry and its role as coordinator of the “IBM-compatible” standard started to erode in the late 1980s. It attempted to regain control of the PC standard by connecting it to IBM-proprietary technology. The strategy failed. By the early 1990s “IBM-compatible” had been replaced by “Wintel” as the dominant standard with IBM�s early partners, Microsoft and Intel, taking the helm as coordinators. The new “Wintel” regime, like its predecessor, was an arena where technical invention was divided amongst vertically disintegrated firms. This market structure, one of divided technical leadership, is a structure in which a number of firms possess the capability to supply interoperable components.
Throughout the 1990s and beyond, thousands of manufacturers built PCs around hardware and software components mainly supplied by Microsoft and Intel. There are two distinct types of supplier to the PC industry. The first type supplies components such as disk drives, chassisвЂ?, RAM, peripherals etc. Products in this category are available from a wide variety of sources at highly competitive prices. The other type of supplier provides products – most notably CPUs and operating systems- available from just a few sources .i.e. Microsoft and Intel.
Most firms outsourced the production of components manufacturing contractors carrying out simple manufacturing operations at high-volume plants in low-cost locations. Eventually, these contractors took on more complex tasks, such as design and testing. By the beginning of this century, large contract manufacturers began to build entire PCs for brand-name companies, designing and assembling basic computers in Asia and shipping them to geographic hubs for production to be completed. These full-line distributors dominate the industry with the broadest customer and product base. Many PC manufacturers aimed to streamline their operations by moving from a build-to-stock to a build-to-order model. Reduced inventory led to reduced costs.
The four main types of PC buyer have remained the same since the early 1990s. Namely: business, home, government and education. However, the distribution channels have changed. Business buyers now buy direct from vendors or distributors as opposed to full-service dealers. Consumer markets are serviced by superstores e.g. (In Ireland) Tesco, PC World and web-based retailers can service all types of demand often at steep discounts.
The 1990s saw Moore’s Law holding true and the end of the technological boom has left behind a saturated PC industry with decreasing profit margins. The rate of innovation within the industry has greatly decreased. Highly standardised products, low margins and oversupply characterise today’s market. Suppliers of PCs are struggling to find meaningful differentiation with their competitors. Today, the top three suppliers in the world are Dell, Hewlett-Packard (HP) and Lenova. Lenova acquired IBM’s PC business in May 2005. As a means to increasing sales and decreasing costs, it is not unusual for industry leaders to share R&D with smaller companies, many of whom opt to merge together with their much larger partners, thus creating increased competition between the industry leaders.
Risks
Despite some solid growth during the first 20 years of the PC world, the market remains not quite where it belongs. The PC space is dominated by PCs, a generation of powerful, inexpensive computers. While there are still numerous areas for improvement, some of the latest changes are being seen as particularly good things: improved productivity, faster performance in certain tasks; less maintenance on current PCs, including BIOSes at boot, the addition of cloud storage, and new generation of Windows and server support software (like a complete overhaul of the desktop in Windows 7 or later). For example, while the current operating systems were not available for a small group of customers, the following are the areas that have received better-than-expected, including:
Windows 10 (32-bit, 64-bit and 64-bit, with support for Windows 8 and Windows 8.1). The recent addition of the new Windows Server 2016 made it easier to share system code, and the increased security and stability of the Server 2012 (32-bit, 64-bit and 64-bit) made it more feasible for a single business group to develop their own Microsoft servers.
Windows 10 (32-bit, 64-bit and 64-bit, with support for Windows 8 & 8.1). The recent addition of the new Windows Server 2016 made it easier to share system code, and the increased security and stability of the Server 2012 (32-bit, 64-bit and 64-bit) made it more feasible for a single business group to develop their own Microsoft servers. Office 2010 (32-bit, 64-bit and 64-bit) and Microsoft Office 2013 have shown little sign of major impact, with only 4% of the market still expected to switch to Office 2016 by the end of 2017.
Source: Adobe
As the growth in PCs has grown, not only are new PCs available on a large number of PCs, their power consumption is also increasing. As of 2015, Microsoft is expanding its Windows 10 PC market from 20% of the workforce to 33%, and the company’s enterprise business plan includes some of the most advanced PC operating systems available: Office, Office Mobile and the Windows App Store.
The company is working diligently to develop all existing Windows 10 and Windows 8 PCs and support them as Microsoft’s next-generation Operating Systems; to provide the best possible user experience for all of its Windows customers for 10 years to come. This has led R&D to find new suppliers that are willing to work together financially to increase their profits.