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Introduction

Apple Computer, Inc. is established on April 1, 1976 in Cupertino, California, and incorporated
January 3, 1977@ It is an American company that designs and markets consumer electronics,
computer software, and personal computers. The company's best-known hardware products
include the iBooks, iMacs, and the iPod. They also make the operating system that runs on that
hardware - Mac OS X operating system. It also makes programs that run on that operating
system like- iTunes, iMovie, Safari Web browser, etc. They also run the online service that
supplies content to their devices, iTunes Music Store.

For reasons as various as its philosophy of comprehensive aesthetic design to its distinctive
advertising campaigns, Apple has established a unique reputation in the consumer electronics
industry. This includes a customer base that is devoted to the company and its brand, particularly
in the United States.

The Apple I went on sale in July 1976 and was market-priced at $666.66, which was sold as a
motherboard, with CPU, RAM and basic chips- less than what is today considered a complete
personal computer. One year after this they came up with an upgraded version Apple II. It
differed from its major rivals because it came with color graphics and an open architecture, while
early models used ordinary cassette tapes as storage devices, they were superseded by the
introduction of a 5 1/4 inch floppy disk and interface the Disk II.

The Apple II was chosen to be the desktop platform for the first killer application of the business
world²the VisiCalc spreadsheet program. VisiCalc created a business market for the Apple II,
and gave home users an additional reason to buy an Apple II²compatibility with the office.

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In 1984, Apple next launched the Macintosh. The

Macintosh initially sold well, but follow-up sales were
not strong due to its high price and limited range of
software titles. The machine's fortunes changed with the
introduction of the Laser Writer, the first laser printer to
be offered at a reasonable price point, and Pager Maker,
an early desktop publishing package. The Mac was particularly powerful in this market due to its
advanced graphics capabilities, which were already necessarily built-in to create the intuitive
Macintosh GUI. It has been suggested that the combination of these three products was
responsible for the creation of the desktop publishing market.

The Macintosh Portable was Apple's first "portable"

Macintosh computer, released in 1989. Having learned
several painful lessons after introducing the bulky
portable, Apple introduced the Power Book in 1991,
which established the modern form and ergonomic layout
of the laptop computer. The Macintosh Portable was
designed to be just as powerful as a desktop Macintosh ¦
 
 

and turned out 17 pounds with a 12 hour battery life. Apple sold fewer than 100,000 units. The
Power Book was 7 pounds and had a 3 hour battery life, and sold a billion dollars worth within
the first year. The same year, Apple introduced System 7, a major upgrade to the operating
system, which added color to the interface and introduced new networking capabilities.

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The success of the PowerBook and other products led to

increasing revenue. For some time, it appeared that Apple
could do no wrong, introducing fresh new products and
generating increasing profits in the process. Thus one
magazine has also named the period between 1989 and 1991
as the "first golden age" of the Macintosh.

 

On August 15, 1998, Apple introduced a new all-in-one

computer reminiscent of the Macintosh: the iMac. The iMac
featured modern technology and a unique design. It sold
close to 800,000 units in its first five months.

¦


On May 19, 2001, Apple opened the first official Apple Retail
Stores in Virginia and California. The same year, Apple introduced
the iPod portable digital audio player. The product was
phenomenally successful ² over 100 million units were sold within
six years. In 2003, Apple's iTunes Store was introduced, offering
online music downloads at a very reasonable price and integration
with the iPod.
 

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Porter¶s Diamond Model

The diamond model is an economical model developed by Michael Porter; this theory tells us
about why particular industries become competitive in particular locations. The determinants of
nation¶s competitive advantage according to the diamond model are:

˜c Factor conditions
˜c Demand conditions
˜c Related and supporting industries
˜c Firm strategy, structure and rivalry c

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Sometime the role of Government and role of chance also plays a significant role in acquiring
competitive advantage internationally.

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Porter¶s Diamond Model: Apple Computers Inc.

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 USA has a large pool of skilled Human Resource, for
knowledge based industry we require skilled labor. Though skill labor proves to be highly
expensive in USA but this factor will not be a big factor as the benefit of the output from
skilled labor will outweigh the cost of labor in knowledge based industry like the
electronics and computer.




 

 This is the most common resources, such as land and natural
resources. USA is blessed with immense huge land area which is 3.79 million square
miles (9.83 million km2), Moreover the energy market is 29,000 terawatt hours per year.
In 2005, 40% of this energy came from petroleum, 23% from coal, and 22% from natural
gas. The remainder was supplied by nuclear power and renewable energy sources. So, we
can figure that these factors will obviously possess a positive impact on our industry.

 
 

 These are various institutions like universities; research
centers etc from where specialized knowledge can be produced. American public
education is funded by state and local governments, regulated by the United States
Department of Education through restrictions on federal grants. Children are required in
most states to attend school from the age of six or seven until they turn eighteen. USA
also has many competitive private and public institutions of higher education as well as
local community colleges with open admission policies.

USA research centers are one the best amongst the world. They have institutions
like Massachusetts Institute of Technology (MIT) and Texas University which are
rewound as the best research center in the world. For research and development, USA
government provides a lot of funding. So we can see that USA is well endowed with
knowledge based resource. Since international competitiveness has to come from the
creation of specialized knowledge, USA seems to have plenty of it.

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 This includes the amount and cost of capital available in a
country. Since financial capital can be bought from another country at present due to
globalization. Cost of capital which is the cost of borrowing fund had become more
important factor.USA interest rate on borrowing is 3.25%, which is one of the lowest in
the world; hence managing fund is not a big deal.

?

  These are the communication system- roads, bridges, fund
transfer system etc. Without it, a country can never be internationally competitive. USA
has well developed communication system which allows them to conduct their business
activity efficiently. E.g. Through online cash transfer it takes less than a minute to
transfer fund anywhere in the world, whereas in Bangladesh it would take two to five
days only to clear a check.

So it can be said from the above analysis that USA possesses favorable factor condition for the
electronic industry.

 
  

Demand conditions in the domestic market provide the primary driver of growth, innovation and
quality improvement. The premise is that a strong domestic market stimulates the firm from
being a startup to a slightly expanded and bigger organization.

The domestic demand of USA is very demanding and sophisticated. Hence there is a constant
pressure from the buyers to innovate and upgrade their product. This proves to be very powerful
for the industry as we can see more and more new products are coming in the market.

In USA life tends to be very complicated and tough. People are always on a rush. Hence they
need mobile devices. And for this reason apple has introduced light weight iPod, Mac laptops
which are easy to carry.

USA is a very big country with over 309 million people, the United States is the third or fourth
largest country by total area, and the third largest both by land area and population. Moreover the

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literacy rate is approximately 99%. So it can be easily assumed that the vast market of savvy
customers will obviously demand for modern and sophisticated and new type of products.

  

  
 


For many firms, the presence of related and supporting industries is of critical importance to the
growth of that particular industry. A critical concept here is that national competitive strengths
tend to be associated with "clusters" of industries. For example, Silicon Valley in the USA which
is a techno clusters of high-technology industries which include individual computer software &
semi-conductor firms. With this strong linkage with the backward industry, companies can come
up with innovative products which can gain competitive advantage for the firm.

Complimentary product from different firms can help get competitive advantage and survive in
the international market as they may share their products with each other. E.g. Microsoft can
give its software to some other hardware company to be integrated with operating system.

 
    

National performance in particular sectors is inevitably related to the strategies and the structure
of the firms in that sector. Competition plays a big role in driving innovation and the subsequent
up gradation of competitive advantage. Since domestic competition is more direct and impacts
earlier than steps taken by foreign competitors, the stimulus provided by them is higher in terms
of innovation and efficiency. USA electronics industry with few big fishes like Microsoft, Dell,
IBM cause intense competition in the domestic market as well as the foreign markets in which
they compete. This pressures from competitor¶s prude them to be at their toes and thus innovate
and upgrade their product to survive and sustain their competitive advantage.



USA government provides incentives like subsidy to encourage - or even push - companies to
raise their aspirations and move to higher levels of competitive performance. Government
intervention encourage companies to raise their performance, stimulate early demand for

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advanced products and focus on specialized factor creation and to stimulate local rivalry by
limiting direct cooperation and enforcing anti-trust regulations.

After analyzing Apple¶s all types of factor and demand condition it can be declare that Apple
still has necessary resources and favorable micro economic factors to continue manufacturing
products in USA. To be specific, Apple has bunch of qualified and skilled workforce with the
indigenous physical resources like petroleum, coal, natural gas, nuclear energy and other
renewable energy. In USA it also has available research and development facilities for new
product innovation and quality improvement.MIT and Texas Universality, two are the most
famous research center in the world which is funded by the US government to keep on inventing
newer ways of gaining competitive advantages. Financial capital is also not a big deal for them
and most importantly communication systems are way much updated which is substantially
required for the smooth transportation of raw materials to the factory and again delivery of the
finished products to different parts of the world in a cost effective manner. Along with the factor
condition Apple has a significant demand condition which is reasonably a positive motive to
continue its operation in USA. Customers are savvy and knowledgeable and that is why they
demand something which is beyond the average acceptable level. The pressure of sophisticated
product demand creates an impulse for Apple to come up with newer and newer innovations for
the survival. World famous Silicon Valley which is a techno cluster of high-technology
industries works as the related and supportive factor for being updated with market info and
complementary products. Again not to forget, other big companies such as Microsoft, Dell, IBM
are there which creates a sense of heavy competition and finally government plays supportive
role to stimulate better performance in market

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Porter¶s Five Forces Analysis

For effective strategy evaluation, we will examine the industry analysis through Porter¶s five
forces analysis. It is necessary to define the industry that Apple Inc. belongs to. It used to be
just in the personal computer and software industry but now Apple expanded its business to the
entertainment industry, which includes MP3 players, online music stores, and mobile phones as
well as desktops. Although Apple is now referred to as a company which is providing digital
entertainment products, the industry itself is not consistently comparable with the other
companies because Apple is not specialized in just one scope of product, such as the computer
hardware but also on several other electronic products. Thus, we will look into the major
segments of Apple¶s products in terms of PC, MP3 players and online music stores in the table
below.

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- Since iPod nano launched, some
c -Economies of Scale: R&D is competitors such as Rio and
c especially a big part of the cost of Olympus had preferred to stop
c producing (R&D cost in computers - Economies of Scale: iPod has 80%
hovers at 12% of sales by the U.S. of market share and Apple

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c industry) contracted with Samsung to buy
- Product Differentiation: Apple¶s 40% of its flash memory production
PC has its own operating system and which is two times more expensive
the unique design. than a hard drive
- Cost Advantage: High demand -Product Differentiation: iPod has its
particularly in proprietary own music store like iTunes which
technology. allows customers download music
conveniently. The complete set of
iPod, iTunes and the accessories for
iPod.
- Cost Advantage: High demand in
proprietary technology. Apple has
several patents for iPod and
favorable access to raw materials by
the contract with Samsung.
- There are relatively few competing - There are various competing firms
c
firms compared to other industries, such as Samsung, Sony, etc., but
c but Microsoft has most of the market iPod has almost 80% of the market

cc 
c share. share.
- Lower priced PC makers like Dell - But if it does not keep the products
have been growing in the market. innovative, the other company¶s
products which are lower in price
than iPod can be a significant threat
in anytime.
- Many types of products such as - The substitutes for MP3 player can
c
PDA, DVD player, and calculator be a CD player, MD player, radio,
c can exist as a substitute for PC, but etc.; but cheaper and easier access to
c these can substitute only one or two MP3 files has been making
c functions of PC. customers leave from the other
music players.

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c - The major suppliers are of raw - The suppliers for raw materials and
c materials and the labor which is labor can be the threat, but the
c highly proprietary in technology and supplier who holds the main
has the power to impact price. profitability is the song writers,

ccc - Besides the threat of the labor singers and players.
c which includes the technicians, there - Another big threat is the illegal free
c are relatively various suppliers for music download websites or P2P
the raw materials. file- sharing sources. Easy and cheap
c access to MP3 files can encourage
c the MP3 player market, but on the
c other hand, this can be the threat to
iTunes.
c
- The number of buyers is huge and - The number of buyers is
c growing as new technologies are continually increasing and they keep
c introduced at a fast pace. demanding new and updated

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c - Apple differentiated by creating its products.
own operating system and unique - The internet speed and the music
design, but other companies like file providers are developing and
Dell or HP differentiate by lower these environments encourage the
price marketing. MP3 buyers.
- iPod has relatively loyal customers.
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!    High Moderate
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 Low Moderate
!   
 Moderate High
! # 
 Moderate Low

This table illustrates that Apple can enjoy greater advantage regarding entry of new threats. As
they offer highly differentiate desktop computers , mp3 player and music services this not that
much easy for a new company to catch up their brand image with a short period.Apple does have
threat in the rivalry as other big computer manufactuirng companies IBM, Dell and operating
systems manufacturer Mircosoft are still there.But other electronic gadgets like mp3 players they
have moderate rivalry from the other competitors.Threats of substitutes are low for pc as other
comapany may come up with PDA, DVD players but these can substitute few of pc
functions.For mp3 players substitues like CD palyer, MD player cant do that much harm because
Apple¶s one are cheap in price.Apple has controlled threat from suppliers of raw material and

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technicians of the computer manufacturig and they can impact price sometimes.For mp3 players
and online music service Apple can face severe threat as some of the illegal websites offer free
downloadable musics and other p2p file sharing facility also posing threats.Musician, players can
create threats for music if the patent charges high value for their songs in market.Number of
buyers are increasing at a fast pace and causes moderate threat to as Apple does have its
differntiated products like own operating systems and hardware.But other companies like Hp and
Dell target cost leadership strategy to capture customers which is a threat.For the music industy
Apple does have significant advantage and fast growing consumers are actually a positive factor
for them as people prefer ipod to listen music.

Present scenario at Apple % c

 



"$

Apple¶s CEO Steve Jobs is very much an autocratic leader; he can¶t digest any negative
evaluation about his products/inventions. Moreover he is very protective about
competitor¶s attempts to take away his employees, whom he selects by his hiring genius.

He does not believe in the tradition, one company making the software and the other
making the hardware. He thinks it hampers the process of innovation. Moreover as some
other company will be making the hardware the ultimate product might make the
customer dissatisfied if the hardware is not up to the mark. Hence he is very cautious
about the product development so that the customers get the value they expect from apple
every time they made any purchase. For this reason Apple kept its Mac operating system
on Apple hardware almost exclusively. It may have won a moral victory-- as it does not
let its image hampered due to some ones else¶s fault but business-wise, it had to sacrifice
much profit making opportunities.

Jobs always try to do something that is different and thus he constantly hunts
opportunities that others avoid. He finds those opportunities tempting but in the process
he put some immoral pressure on his employees.

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Apple tries to be different from the others by focusing on many possible complimentary
products at a time. They produce the hardware, the operating system for the hardware,
programs to run on the operating system. It also makes consumer electronics that connect
to all those things and it runs the online service that furnishes content to those devices.
Overall, they try to be self- sufficient and different by violating the law of comparative
advantage. In another word, they prefer to keep their grasp on the entire electronic system
instead of specializing on particular segment.

They tried to differentiate by focusing on the uniqueness in style. Hence they came up
with three of the signature technological innovations of the past 30 years: the Apple II,
the Macintosh and the iPod and launched three more impressive new products: an ultra-
tiny iPod called the nano, the video iPod and a nifty feature called Front Row.

"%& 

Unlike other competing companies Apple¶s employees spend a lot of their time at
meetings where they do brainstorming to come up with new innovative or improved
products ideas by following concurrent engineering. In traditional engineering a
relatively short time is spent defining the product. A relatively long time is spent
designing the product and a surprisingly long time is often spent redesigning the product.
The key to shortening the overall design time is to better define the product and better
document the design process. Traditionally, the development of a product had been seen
as a cycle of planning, developing, reviewing, launching and finally adjusting the product
whenever needed. But concurrent engineering is a mean of reducing product development
time and cost by managing development processes so that they can be implemented
simultaneously rather than sequentially. It is a team-based cooperative approach to
product design and development, in which all parties are involved in new product
development work in parallel. Concurrent engineering reduces or removes the time lag

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between the different stages of a product's development, and earlier entry into a market is
therefore possible. Product quality is improved, development and product costs are
minimized, and competitiveness is increased.

*  ?


The company makes continuous improvement in its existing products to protect it losing
its competitive advantage to others and to keep its customers well satisfied. As for
example, the new iPod has more memory (30 GB as opposed to 20 GB) and its thinner
(0.43 in., as opposed to 0.6 in.).Another feature is present in iPod is it plays video. The
screen is just 2.5 in. diagonally, by its bright and sharp looks it seems to be bigger than it
is. It's the kind of thing that people could not resist to posses. There are other portable
video players that work compatibly with the iTunes Music store which give users a quick,
legal and reasonably cheap way to buy video content.

The diagram below shows the relentless improvement of Apple¶s iPod from its initiating
till 2005.

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Surviving Strategy

In order to survive in the cut throat market Apple needs to get rid of their existing shortcomings.
Because with their current policy they might managed to survive up to the present time but long
term survival will be at stake. Therefore, to shield themselves from the fierce competition they
should redesign their business policy and strategic implementation. Few possible actions might


  # 
 



˜c They should consider their competitors equally worthy because any time anyone can take
a lead ahead of Apple. So instead of assuming others as inferior and thinking themselves
as the standard they should give equal importance to all of its competitors and seek
information about others innovations. It¶s not practical to overlook the challenges
because if Apple continuously does that they would not feel the pressure, necessity of
innovation. If they consider these factors their innovation would have been better and
modernized. They should break the wall of their technological biosphere and realize the
real competition and take necessary steps accordingly.

˜c âGatekeeper¶ of the future digital music: Apple should not posses any overconfidence in
regard to their positive advantages. They are the undisputed pioneer of digital music
which they should utilize for their future survival. If they take this fact as granted it will
create an adverse scenario and that is why they should nurture this advantage so that they
can use it for their long term survival.


 
    
 
   

CEO Steve Jobs should change his perception towards product criticism. As he is very
much concern of product quality he undoubtedly needs consumer¶s feedbacks in order to
undertake further quality improvements. He should view those criticisms as a source of
information towards necessary product developments. With the help of this policy they will be
able to satisfy more customers as well as gain more market shares.

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˜c Apple¶s employee management should not continue the way it is now. Effective
employee management does not mean pressurizing them in achieving organizational
goals. Enthusiastic work motivation should be generated in order to pull out the optimal
potential of the employees. Freedom needs to be provided by the CEO along with setting
up a short term goals. By this policy employee loyalty and satisfaction towards their job
will be increased they will be more inspired to contribute for Apple. For example, if CEO
tells one of the employee to cancel his/her reservation for dinner and come to the office
then it will definitely be a matter of extra burden which might lead to employee
dissatisfaction and thus hampering productivity. Turnover rate may increase and as a
result Apple may lose skilled and experienced workers.

˜c Apple should clear its employees about the target. Clear roadmap should be presented
rather them keeping employees in vague about their job responsibility. This will help
them to be consistent with their work and achieve the desired target effectively and
efficiently.


 '  

Apple tries to be different from the others by focusing on many possible complimentary products
at a time. Rather than focusing on everything it should devote its focus on some particular items
that it is best at and should let others produce the remaining components in which the others have
competitive advantage. According to the law of comparative advantage, one can¶t be best at
everything, so by focusing on that product Apple is best at will yield the paramount return for the
company and also let it gain competitive advantage.

If it allows Microsoft¶s operating system in its Mac books it will be able to capture greater share
of market. This is because the greater portion of computer users are comfortable using Microsoft
and there are many who feel reluctant to use other operating system. On the other way round if
Apple let its Mac operating system to be used by others it will let Mac operating system to
expose to more hands of customers who might feel Mac to be preferable. So, in both ways Apple

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will be able to benefit itself by getting access to greater market share than what it currently
posses, i.e. only 4%.

Strategy to Sustain competitive advantage

Competitive advantage is the mean by which a firm manages to keep making money and sustain
its position against its competitors. It is something that places a company above the competition.
It comes by the possession of various assets and attributes (including natural resources, location,
skilled workforce, brand names, etc.) which gives a competitive edge over rival suppliers.
Attaining competitive advantage is somewhat easy but the tough task is to sustain it, because if
Apple fails competitors will outrun them in the race of fierce competition. So, for sustaining the
heart and soul earned competitive advantage Apple can consider implementing the following
measures or strategies:

˜c ?
   & 
 
 By investing in market research Apple will be able to get
access to two very important source of information, they are:
›c ?
   
 
     according to the newly available
information about the customer wants & needs Apple will upgrade its existing
product or come up with new products. Hence customers will feel Apple to be a
company that creates customer satisfaction by concentrating on their demands.
This will help to create loyal customer base ensuring sustaining the competitive
advantage. E.g. wireless iPod!
›c ?
   
     knowing about the competitors strategy and
product will help Apple come up with new or counter strategy and also neck to
neck competitive products in the market so that Apple never lose out to its
competitions; hence sustaining its competitive edge.

˜c ?
  
 
   By increasing or sustaining its investment in
research and development Apple will be able to come up with new products that will not
only attract customers towards the new product but also able grab greater share of the

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market. Like the introduction of iPod in 2001, not only created a craze in the market by
making huge success but also helped Apple get access to a new market of great potential.

˜c ? (
 

 Once a product is launched it is the duty of the company
to follow up evaluation and make necessary changes. In this fast changing world if one
product is remained the same, customer will become bore of it and move away from the
product. Competitors will someday copy the products by upgrading their products and
Apple might lose its competitiveness. Hence constant improvement on the product is
needed which might be very small like change in the keypad of a laptop. This minor
changes or by moving to more sophisticated appearance Apple will be able to satisfy the
ever increasing customer wants. Hence they will able to attract new and retain its
customers, which eventually help sustain the competitive advantage.

˜c Õ  &  
 By using new marketing approach like cost leadership and
differentiation simultaneously, advertising and promotion, sales promotion, new product
placement strategies, fair pricing policy, points of parity etc Apple will be able to get
greater customer¶s attention to its product. Hence get hold of greater market share and
sustain its competitive advantage.

˜c Õ & By diversifying into new market new customer segment Apple will
be able to explore new opportunities, and thus get profit from multiple industries. E.g. if
Apple come up with Apple camera it will enter the photography industry.

˜c *        Apple should use better HR practices that will
motivate the employees to work and also become more loyal to the organization. If the
employees are satisfied about their job they will want to work with dedication and as a
result come up with brilliant innovations.

˜c Õ 

    Service is a very important factor and thus can create
competitive advantage of any company. By providing training to sales people to present
apple¶s products in new and more appealing way. The new way of advertising and
spreading positive word of mouth to buyers and influencing their purchase behaviors.

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These approaches will attract more customers towards Apple and also retain their loyal
customers.
˜c Õ 
  


 New production process will permit Apple to produce more

effectively and efficiently. Hence will be able to keep the production cost low by
achieving economies of scale and increase its margin.

˜c   
 

     Depending on only a few sources of advantages over
the competitors is not enough, because any time the competitors can copy those few
advantages and over dominate Apple. Hence Apple needs to create multiple sources of
advantages like, quality, uniqueness in design, dealer network system, after sales service,
cost competitiveness etc. Hence even if one competing firm wants to copy Apple¶s
strategy it will not be able to copy the multiple sources all at once, it will take time. And
by that time Apple will upgrade existing or create more sources of advantages. In this
way will sustain its competitive advantage.

˜c 
    
 

 The sources from whom Apple gets its raw materials
should be fixed, as will create greater cooperation between them and both will work for
each other and help each other sustain in this competition. But if the sources are changed
continuously Apple will not be able to create relationship with its supporting industry,
hence in times of difficulty will not found any one to provide support. Like Toyota, who
maintain its sources constant and also maintained a very good relationship with its raw
materials suppliers, had got the support from its suppliers at its most difficult time to fight
back in the market.

˜c Õ 
 

 Apple can come up with new product designs according to the
customer wants which can be obtained by conducting market surveys. keeping relevance
with the conventional product design and modes they can redesign their products in terms
of convenient shapes, decrease weight of portable products, appealing and standard
product colors, smart ways of product labeling and attractive packaging in order to be
with the modern flow and styles.

˜c 
   

  To develop a sustainable competitive advantage, they
continually need to offer differentiated products that keep attracting customers.

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Companies might be successful for a short period of time by attractive and appealing
product or service launches. But this is difficult to the companies to remain successful
over a longer period of time. Therefore, Apple will only able to be successful over the
longer period of time if they offer differentiated product. Apple¶s success doesn¶t stem
from its newest iPod but from its capabilities to continuously offer fashionable, well-
designed and easy-to-use computers and other consumer electronics.

˜c 


  As fierce competition exist in the US market, Apple might also need
to focus on cost competitiveness to be able survive in the price war. So integrating
product differentiation strategy with low cost strategy will enable Apple to expand into
new market or grab greater share of the market. They could achieve low cost strategy by
contracting out its components or certain job to its supporting industries. This will let
Apple be more competitive as everything will become cheaper. In addition to this, for the
fear of losing its quality by contracting out, Apple can have equity share in the supporting
industry, thus allowing power in the hand of Apple to prevent any manipulation by the
suppliers industries.

Conclusion

Apple from its very beginning tried to be different; they achieved several successes by adopting
their differentiation strategy. They try to be different not only in terms of product but also in
terms of management style. In the process of doing so they became overcautious about every tiny
thing. They tried to be self sufficient by focusing on many possible complimentary products at a
time. And by keeping their innovation extremely intact to its own components it managed to get
its brand name safeguarded from getting impeded, but at the cost of low market share. Now the
time has changed, anyone can copy one¶s innovation and take the market share anytime due to
globalization- which makes information readily available at a very fast rate. Therefore to survive
in this battle, Apple needs to resolve its complicacies quickly and take necessary steps not only
to survive but also do the difficult task of sustaining their competitive advantage.

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