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Competitive Advantages the Apple’s

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1. * What, historically, have been Apple’s competitive advantages? Apple’s mission is to make products that were cutting edge, designed beautifully, and easy to use. They have been able to keep this competitive advantage not only by relying on its own proprietary designs but also by refusing to license their hardware to third parties. They tend to be a leader in new technologies such as the first desktop solution, mp3 player, and touch screen cell phone. Jobs believed deeply in focus while the previous CEOs sought to broaden Apple’s products. Apple had one of the narrowest product lines of any company of comparable size. Jobs also believed in extreme practices of secrecy, “closed door policy” in which key cards accessed only certain areas and dummy positions for new hires until they could be trusted. Jobs wanted Apple to be a cultural force.

2. * How sustainable is Apple’s competitive position in PCs, MP3 players, and smartphones? PCs: Looking back on how the PC industry developed, Apple was the original innovator, but they became overshadowed by IBM and Microsoft who would sell their rights to manufactures who could make a cheaper and almost comparable device to Apple. As we have seen in the past few years, Apple has been able to cash in on developing new technologies before anyone else has. Jobs’ idea of creating a digital hub allows him to monopolize the consumers experience because all devices such as the iPod and iPad, which are highly sought after, can only be used if you purchase add-on through Apples store. Apple also has made their PC’s more compatible with other PC’s by working with Microsoft and providing the capability to use applications such as Microsoft Office, which is the most widely used creation software. They also cooperated with Intel which allowed them to make their computers faster and more energy efficient. I believe that Apple’s competitive position is sustainable as long as they continue to come up with products that are cutting edge and customers are forced to buy them first from Apple if they want to get their hands on the latest and greatest technologies.

MP3 players: When apple came out with the iPod in 2001 they secured a position in the MP3 market that no other competitor could match. The quality and capability of the iPod surpassed that of its competitors and Apple soon came out with new generations that out performed its previous model. By 2010 Apple held more than 70% of the MP3 market. Apple also introduced iTunes which allows users to purchase and save their music in any computer they choose and download to any Apple product. This is the largest music catalog available and is the catalyst to get customers to buy Apple products. They make hardly any money on the music, but people will purchase the Apple products to have the whole experience. Considering these facts and the reality that Apple has developed other products such as the iPhone and iPad which allow you to use the same music interface and store, they will continue to be the leader in MP3 players.

Smartphone: With the problems that were created for Apple with the availability of free listening on sites like Pandora and Spotify, Apple had to figure out how to get customers to still use iTunes. With the invention of the iPhone in 2007, there were able to not only partly address that issue, but also introduce a product into the industry that was completely different and could offer capabilities that no other phone could. Even with all this to offer there were some draw backs. The first iPhone model was limited to a single network that did not always have the best service, bad battery life, and did not support flash technology. They were able to capture over 14% of the smart phone market and introduced the Apple App Store which would bring in even more revenue and benefits to customers which would convince them to buy the iPhone. Overall people still continue to purchase the iPhone and there seems to be a sort of “following” for Apple created products, so I do not think that Apple will have a problem with maintaining a position in the smart phone market. 3. What are Apple’s long-term prospects for the iPad?

The iPad was designed to be a middle ground between the smart phone and laptop. Some thought that the iPad would be a replacement for the Kindle fire but that was never Jobs intention. Eventually Jobs thought that the iPad would kill the laptop market but my personal opinion is that it never will. The capabilities and design of the iPad does not always provide the same experience that a laptop does, so only time will tell where the iPad goes. 4. What advice would you offer the new CEO Tim Cook?

* Global expansion—-like open more stores worldwide
* For iPhone—open phones to every carrier
* Develop its one-to-one apple program
* Pursue stronger strategic alliances with software companies

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