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Discussion: Apple Case Study

Oleg Lozytskyi

School of Business, Liberty University

BUSI 400: Strategic Planning/Business Policy

Prof. John Borek

February 22, 2022

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Apple Case Study

There is no doubt that Apple Inc. Is one of the most successful companies in the world,

but are they truly doing an excellent job at expanding? As one of the analysts pointed out: “ways

to make the world’s most valuable company even more valuable when it’s already so big that

conventional growth strategies—extending product lines, moving into new territories—would

barely move the needle.” In this case study the reader will be able to find out about

organizational problems of Apple and analyzed solutions to those obstacles.

Over the course of last 45 years of Apple’s existence, they came up with a lot of different

products diversifying their streams of income: iPhone, Apple Watch, MacBook, iMac, iPad,

customer services and software developments. All of these account for the majority of Apple’s

revenue, but different years have been proven to be significantly more or less profitable for the

company. Excellent example of market dominance was back in 2010 when iPad was created and

released to the public. The company had sold over 300,000 iPads (Rayesa, 2021) on the same

day when it was released. By the end of the year Apple accounted for 95% of all tablet

computers that were sold. Within next two years, the market share had dropped to 78.9% and by

the end of 2018 Apple was down to 26% of the market. This phenomenon was mostly due to

other companies like Samsung, Google Chromebook, Amazon Kindle Fire and Microsoft

Windows’ Surface Tablet that, in turn developed their own software and hardware in order to

compete on the world market. While noticing the trend of increasing competition, Apple raised

the bar again by introducing their new lineup of iPad Pro and iPad Mini with new Bionic chip

that, in combination with iOS software, was outperforming absolute majority of the tablet

devices on the market. This brought profit margins and sale volume back up for the company.

This serves as an example of proper execution of the business plan and shows that the company
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is capable of adapting when new innovations are most needed. These new tablet devices found

its new market across airports used by pilot’s, maintenance ground crews and flight attendants.

(Dutta, 2019)

From above example we could identify few important features: company developed the

product, introduced it to the market with a huge success and then saw a steady decline in sales

until it re-invented and improved the original product. Other companies entering the market

started to take over parts of revenue by increasing their quality and quantity of the products.

Unfortunately, this is the fate of technology companies – once new technological advancement is

introduced, it can become popular but then inevitably will see diminishing returns until it

becomes fully obsolete. Board of directors in Apple Inc. understands the challenges and tries to

mediate the risks of being behind the market by reserving certain technological advancements for

the models of the following year. In other words, the company set up their business model in a

way that they have to not only be competitive with other companies, but also annually improve

their own product. This can serve as a safe approach to present improved products every year,

but it would not protect from other companies like Samsung, who is constantly introducing new

models and tapping into new markets.

While it is difficult to predict how the markets would react to the qualitative and

quantitative volatility of technological advancements, it could improve Apple’s competitiveness

in the markets that are untapped by them at the moment. Example of that can be foldable phone

introduced by Samsung – Z Flip 3 and Z Fold 3. Approximately 730,000 foldable phones were

purchased in 2019 and 82% of them were made by Samsung. When comparing this numbers to

Apple’s sales, they can look not as significant, but every opportunity Apple Inc does not take to

enter a new market will be taken by another company.

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One of the possible solutions to get a competitive advantage could be introduction of the

new and tested technology to the customers without reservation of it with the sole reason of

using it on the new model next year. This leaves a lot of opportunities across the world to take

advantage of the new camera, chip, sensor or any other part of the device faster than Apple. Lost

profits on the short term could translate in to lost customers across the world who build brand

loyalty over the years. This could also result in potential loss of larger profits.

In order to quantify it better, it is important to recognize that Apple is leading the

smartphone industry with advancements in their Bionic Chips while Samsung is prioritizing

advancements in the camera and screen quality of their models. Samsung has introduced better

specifications of their phones in the battery, connectivity and screen quality categories. 120Hz

AMOLEDs displays refresh 120 times per second when iPhones are limited to 60Hz; Battery

capacity on iPhone 12 is 2800mAh while Samsung provides higher capacity of 4000mAh. All of

this technology is available for any company on the market, but it would have to be outsourced.

On paper, Samsung should be beating Apple in their performance, but in real world, software

installed across Apple products allows for higher performance across competitors. If Apple

decides to implement all newest and known advancements in their smartphones they could put

companies like Samsung, Xiaomi, OPPO, Huawei and others “on the sideline” ultimately

allowing for sales of up to 330,000 (around 80% of the market) additional phones per quarter.

This process would be more convoluted and difficult to execute then mentioned in the

above chapter. Few aspects the company would have to work on is price, increased production

output, outsourcing parts, building new software that supports new devices and changing the

current business model. Ultimately the change would focus company’s attention on competition

with outside companies more than competing with themselves. Implementing all of the available
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technological advancements in to the newest model of the phone could lead to significant market

domination in this space and inevitably lead to decreased sales of the competitors’ products.
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Work Cited:

1) Rayesa, N. F., & Ali, D. Y. (2021). Cost of quality model in the practice of apple juice

processing business unit in Batu City: a comparison. IOP Conference Series.Earth and

Environmental Science, 924(1)http://dx.doi.org/10.1088/1755-1315/924/1/012067

2) Dutta, B. (2019, Mar 07). Wistron and Foxconn's Investments To Boost Apple's Business In

India. Electronics Bazaar,  http://ezproxy.liberty.edu/login?qurl=https%3A%2F

%2Fwww.proquest.com%2Fmagazines%2Fwistron-foxconns-investments-boost-apples

%2Fdocview%2F2188639177%2Fse-2%3Faccountid%3D12085

3) APPLE INTRODUCES APPLE BUSINESS ESSENTIALS. (2021, Nov 23). The Public

Record, 48, 5. http://ezproxy.liberty.edu/login?qurl=https%3A%2F%2Fwww.proquest.com

%2Fmagazines%2Fapple-introduces-business-essentials%2Fdocview%2F2611916385%2Fse-

2%3Faccountid%3D12085