Description
This presentation is about the case study of apple in the business policy.
Business Policy – Apple Case
[Type the document subtitle]
Business Policy – Apple Case
Situational Analysis:
Apple Computers Corporation manufactured and marketed two principle lines of personal computers, related software and peripheral products. The first one being - Apple II which was aimed at educational and home computing markets and the second was Macintosh which was aimed at business market and the higher educational market. Through its superior network structure, Apple identified the engineering workstation market as a lucrative target for future. Its objective was to secure a strong foundation in both the segments and once it could establish itself as a major workstation manufacturer, it can expand its objective to include all UNIX environments and applications. However, there were players which were already in the workstation market or looking forward to enter this market.
Apple’s Competitors:
IBM: ? ? ? It followed a strategy of full product and service line offering approach. IBM proposed Model 80 for engineers which was based on 80386 microprocessor with a speed of 20 MHz which was a proprietary hardware setup to reduce cloning potential Due to market?s resistance to proprietary hardware, IBM resorted to tough quotas for dealer network which resulted in wholesale pricing
Sun Microsystems: ? It is one of the fastest growing computer manufacturers. It produces the machines with widely accepted computing standards like Ethernet network protocols, Motorola?s 68000 series etc. Sun, by using off-the-shelf components were able to take advantage of technological breakthroughs as they reached the market. Customers chose Sun for its pricing (lower price over its competitors) and cutting-edge technology. It has followed Triad strategy of having three different computers and user friendly graphic interface similar to Mac. It has also entered into an agreement with AT&T with a sale of 20% block of its stock which led the market to think that UNIX won?t be “open” to all computer systems. The 386i allowed DOS to be run within UNIX OS software giving the user access to all programs within IBM world.
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? ? ?
Apollo Computer ? ? ? ? The pioneer in workstation market Lacked financial resources and better marketing expertise Sales not increasing in proportion to the market growth rate. Has a low-end workstation DN 3000
Digital Equipment Corporation
Business Policy – Apple Case
? ? ? Considered world?s second largest computer systems supplier. Offered VAX Cluster which offered interrupted service and flexibility of offering additional VAX unit in case of requirement of more processing power. Threat from the increasing penetration of personal computers from players like Apple, Compaq, IBM and Sun Microsystems which were making inroads into individual workstation market share. Entered into an agreement with Apple Computer but rather focused on the low-end products like PC clones and a full line of workstation micros based on RISC technology.
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Compaq ? ? ? Priced much below IBM machine and has comparable quality. Considered as next best alternative to IBM and represented a better value to many computer customers Threat was new standard PS/2 touted by IBM.
Hewlett Packard ? ? Model Vectra which used RISC processor. Price reported to be near to that of a low end workstation which will operate UNIX and run DOS similar to SUN 386i
NeXT ? ? ? ? ? Founded by Steve Jobs after leaving Apple. Current product used separate microprocessors for separate operations which resulted in higher performance Considered as „Mainframe on the Desktop? by technical analyst. Stated strategy of focusing on higher education, engineering, computer science and business markets. It has entered in a license agreement with IBM UNIX for the use of its graphic interface and programming environment in all IBM machines.
Objective Statement:
Objective statement is to decide whether Apple can make a formal entry into the engineering workstation market
Business Policy – Apple Case
Target Market:
? Apple?s target market was higher education, business, government, K-12 education and international. The target market was divided into two groups- Engineering workplace and engineering higher education. The engineering workstation market consisted of various engineering fields-electrical, chemical, mechanical, civil, industrial and architectural.
?
Problems:
? ? Apple?s perception in the market as a company which comes out with cool & innovative products & the Mac?s cannot handle sophisticated applications Apple doesn?t have a core-competence in the engineering workstations business as compared to the competition, neither in terms of technology nor the sales & distribution channel.
SWOT Analysis of Apple:
Strengths: Innovative Company ? ? ? Presence in the Home segment The analysis of Financial statements shows that the company has lot of cash surplus and is a zero debt company Ability to provide a end to end solution with hardware, software and operating system
Weaknesses ? Perception that sophisticated software is not available to match the hardware. ? Poor image as a serious business machine. ? Not a well established dealer network. ? No previous experience of using UNIX. ? Impact of OS in workstation market
Opportunities: ? Unmet needs in the potential workstation market ? Competitive pricing of Apple Threats ? Wrong perception and image of Apple in the mind of consumers ? Sun?s competing brand in the workstation segment ? IBM?s full line of computers is also one of the major competitor
Business Policy – Apple Case
Alternatives:
1. Enter the Work-station market in alliance with an already established player in the market 2. Enter the Work-Station on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products 3. Not enter the work-station market at all and focus on core competencies
Evaluation of Alternatives:
1. Enter the Work-station market in alliance with an already established player in the market Pros: ? ? ? ? ? Early entry to the market Reduction in cost Leverage the brand name & core-competence of its strategic alliance partner. Reduce Sales and Distribution costs Apple's perception in the market is that the Mac's cannot handle sophisticated applications of engineering thus this alliance will help Apple to gradually position itself in the engineering workstations market.
Cons: ? ? Significant investments in the alliance's company so as to attract a good partner. Such an alliance can dilute Apple's existing perception in the market as a company which innovate rather partner to deliver superb technology.
2. Enter the Work-Station on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products Pros: ? ? ? ? Apple would tap the lucrative market of the future and has a potential to grow more in the coming years. No dilution of image of the Innovator Company It has got huge success through product release of MACII and can carry forward that accomplishment to the engineering workstation market as well. The capital can be used to develop core competencies
Cons: ? High risk involved not only in terms of capital but also in terms of time.
Business Policy – Apple Case
? Competition may move up the ladder by the time enters in to the workstations market
3. Not enter the work-station market at all and focus on core competencies Pros: ? Apple has been doing well in the home computer segment. Hence, venturing into this new segment would involve unnecessary extra investment in terms of money, resources, time and effort, that can be avoided. Apple can avoid the confused positioning in the minds of the customers and concentrate to build its market share in its area of core competency.
?
Cons ? May loose out an opportunity of lucrative workstations market
Selected alternative
Alternative 1 will help Apple have an immediate foray into the lucrative workstations market without having to bear risks mentioned in the alternative and huge capital costs. This wil help expand the product portfolio of Apple and expand its market share. Alternative 2 will prevent dilution of the image of the company. However it poses considerable risks in terms of time, capital requirement and future evolution of market. Alternative 3 will help Apple concentrate on its core competencies. However it is not good alternative considering the opportunity posed by the lucrative workstations market. From the above analysis, we can conclude that alternative 1 is the best alternative that Apple should follow to enter into lucrative workstations market without having to bear huge risks.
Contingency Plan:
In case of failure of the company to form a strategic alliance, the alternative 2 of ”Entering the WorkStation on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products” can be used as an alternate path to enter the lucrative market and gain market share.
doc_791995713.docx
This presentation is about the case study of apple in the business policy.
Business Policy – Apple Case
[Type the document subtitle]
Business Policy – Apple Case
Situational Analysis:
Apple Computers Corporation manufactured and marketed two principle lines of personal computers, related software and peripheral products. The first one being - Apple II which was aimed at educational and home computing markets and the second was Macintosh which was aimed at business market and the higher educational market. Through its superior network structure, Apple identified the engineering workstation market as a lucrative target for future. Its objective was to secure a strong foundation in both the segments and once it could establish itself as a major workstation manufacturer, it can expand its objective to include all UNIX environments and applications. However, there were players which were already in the workstation market or looking forward to enter this market.
Apple’s Competitors:
IBM: ? ? ? It followed a strategy of full product and service line offering approach. IBM proposed Model 80 for engineers which was based on 80386 microprocessor with a speed of 20 MHz which was a proprietary hardware setup to reduce cloning potential Due to market?s resistance to proprietary hardware, IBM resorted to tough quotas for dealer network which resulted in wholesale pricing
Sun Microsystems: ? It is one of the fastest growing computer manufacturers. It produces the machines with widely accepted computing standards like Ethernet network protocols, Motorola?s 68000 series etc. Sun, by using off-the-shelf components were able to take advantage of technological breakthroughs as they reached the market. Customers chose Sun for its pricing (lower price over its competitors) and cutting-edge technology. It has followed Triad strategy of having three different computers and user friendly graphic interface similar to Mac. It has also entered into an agreement with AT&T with a sale of 20% block of its stock which led the market to think that UNIX won?t be “open” to all computer systems. The 386i allowed DOS to be run within UNIX OS software giving the user access to all programs within IBM world.
?
? ? ?
Apollo Computer ? ? ? ? The pioneer in workstation market Lacked financial resources and better marketing expertise Sales not increasing in proportion to the market growth rate. Has a low-end workstation DN 3000
Digital Equipment Corporation
Business Policy – Apple Case
? ? ? Considered world?s second largest computer systems supplier. Offered VAX Cluster which offered interrupted service and flexibility of offering additional VAX unit in case of requirement of more processing power. Threat from the increasing penetration of personal computers from players like Apple, Compaq, IBM and Sun Microsystems which were making inroads into individual workstation market share. Entered into an agreement with Apple Computer but rather focused on the low-end products like PC clones and a full line of workstation micros based on RISC technology.
?
Compaq ? ? ? Priced much below IBM machine and has comparable quality. Considered as next best alternative to IBM and represented a better value to many computer customers Threat was new standard PS/2 touted by IBM.
Hewlett Packard ? ? Model Vectra which used RISC processor. Price reported to be near to that of a low end workstation which will operate UNIX and run DOS similar to SUN 386i
NeXT ? ? ? ? ? Founded by Steve Jobs after leaving Apple. Current product used separate microprocessors for separate operations which resulted in higher performance Considered as „Mainframe on the Desktop? by technical analyst. Stated strategy of focusing on higher education, engineering, computer science and business markets. It has entered in a license agreement with IBM UNIX for the use of its graphic interface and programming environment in all IBM machines.
Objective Statement:
Objective statement is to decide whether Apple can make a formal entry into the engineering workstation market
Business Policy – Apple Case
Target Market:
? Apple?s target market was higher education, business, government, K-12 education and international. The target market was divided into two groups- Engineering workplace and engineering higher education. The engineering workstation market consisted of various engineering fields-electrical, chemical, mechanical, civil, industrial and architectural.
?
Problems:
? ? Apple?s perception in the market as a company which comes out with cool & innovative products & the Mac?s cannot handle sophisticated applications Apple doesn?t have a core-competence in the engineering workstations business as compared to the competition, neither in terms of technology nor the sales & distribution channel.
SWOT Analysis of Apple:
Strengths: Innovative Company ? ? ? Presence in the Home segment The analysis of Financial statements shows that the company has lot of cash surplus and is a zero debt company Ability to provide a end to end solution with hardware, software and operating system
Weaknesses ? Perception that sophisticated software is not available to match the hardware. ? Poor image as a serious business machine. ? Not a well established dealer network. ? No previous experience of using UNIX. ? Impact of OS in workstation market
Opportunities: ? Unmet needs in the potential workstation market ? Competitive pricing of Apple Threats ? Wrong perception and image of Apple in the mind of consumers ? Sun?s competing brand in the workstation segment ? IBM?s full line of computers is also one of the major competitor
Business Policy – Apple Case
Alternatives:
1. Enter the Work-station market in alliance with an already established player in the market 2. Enter the Work-Station on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products 3. Not enter the work-station market at all and focus on core competencies
Evaluation of Alternatives:
1. Enter the Work-station market in alliance with an already established player in the market Pros: ? ? ? ? ? Early entry to the market Reduction in cost Leverage the brand name & core-competence of its strategic alliance partner. Reduce Sales and Distribution costs Apple's perception in the market is that the Mac's cannot handle sophisticated applications of engineering thus this alliance will help Apple to gradually position itself in the engineering workstations market.
Cons: ? ? Significant investments in the alliance's company so as to attract a good partner. Such an alliance can dilute Apple's existing perception in the market as a company which innovate rather partner to deliver superb technology.
2. Enter the Work-Station on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products Pros: ? ? ? ? Apple would tap the lucrative market of the future and has a potential to grow more in the coming years. No dilution of image of the Innovator Company It has got huge success through product release of MACII and can carry forward that accomplishment to the engineering workstation market as well. The capital can be used to develop core competencies
Cons: ? High risk involved not only in terms of capital but also in terms of time.
Business Policy – Apple Case
? Competition may move up the ladder by the time enters in to the workstations market
3. Not enter the work-station market at all and focus on core competencies Pros: ? Apple has been doing well in the home computer segment. Hence, venturing into this new segment would involve unnecessary extra investment in terms of money, resources, time and effort, that can be avoided. Apple can avoid the confused positioning in the minds of the customers and concentrate to build its market share in its area of core competency.
?
Cons ? May loose out an opportunity of lucrative workstations market
Selected alternative
Alternative 1 will help Apple have an immediate foray into the lucrative workstations market without having to bear risks mentioned in the alternative and huge capital costs. This wil help expand the product portfolio of Apple and expand its market share. Alternative 2 will prevent dilution of the image of the company. However it poses considerable risks in terms of time, capital requirement and future evolution of market. Alternative 3 will help Apple concentrate on its core competencies. However it is not good alternative considering the opportunity posed by the lucrative workstations market. From the above analysis, we can conclude that alternative 1 is the best alternative that Apple should follow to enter into lucrative workstations market without having to bear huge risks.
Contingency Plan:
In case of failure of the company to form a strategic alliance, the alternative 2 of ”Entering the WorkStation on its own without any strategic alliance and at the same work on its sales and distribution network and on changing market perception of the company and its products” can be used as an alternate path to enter the lucrative market and gain market share.
doc_791995713.docx