1. What are Apple's strength and weaknesses? Opportunities and threats?

Strength is defined as a resource or capability controlled by or available to a firm that gives it an advantage relative to its competitors in meeting the needs of the customers it serves. Causal ambiguity exists when a firm has created a strategic advantage situation which competitors cannot understand or replicate. This is true in the area of Apples product development process. Apples secretive product development process combined with it energetic, innovative brand provide it with a competitive advantage. Apple's Steve Jobs believes his company's ultimate advantage comes from its ability to make unique, or as he calls them, "insanely great" products. At a time when rivals are outsourcing as much of the design process as possible to cut costs, Apple remains at its core a product focused company. Jobs are hands-on in the design process and visionary in wanting insanely great products. A weakness is a limitation or deficiency in one or more of a firms resources or capabilities relative to its competitors that create a disadvantage in effectively meeting customer needs. Apples dependence of full hardware/software appliance integration is a both a weakness and a strength. Apple creates most of its own software and its own operating systems. As an advantage, Apple does not have to design applications for the ever changing Windows platform like Dell and Gateway, et al. Another advantage to full integration is that it provides Apple with control over virtually all of its value chain. The weakness comes from Apples dependency on a comparatively smaller pool of products for its revenue. Combined with CEO Steven Jobs insistence on in-house only products design and engineering, it means Apple could be a dud or two from disaster.

An opportunity is a major favourable situation in a firms environment. There exists an opportunity for Apple to delegate more of the design and engineering to ODMs beyond the basic engineering tasks. ODMs dislike working with Apple because theyre not given more design responsibility. By farming off more design work to the ODMs motivated to provide such service, Apple could potentially fuel further innovations and ideas. While still allowing Apples in-house team to make final design decisions, there could perhaps be design competitions between the ODMs and in-house designers to create the next insanely great product while at the same time working to build stronger, mutually gratifying relationships with the ODMs in the process.

A threat is defined by the text as a major unfavourable situation in a firms environment. Industry competition provides a real threat to Apple. Because of its reliance on its own applications and design teams and relatively small number of products within its industry, Apple faces a threat from practically any other competitor in the PC, Laptop, MP3 or portable device space who could exploit Apples weakness. If any of Apples numerous competitors happen to develop the next insanely great product before Apple, this could be especially damaging if the new great product begins to absorb market share from a product line in which Apple holds dominance and relies on for market growth as with the iPOD MP3 player.

2. What is the most meaningful type of comparison you make use of in conducting each approach to internal analysis at Apple?

Resource-based view, RBV is a method of analyzing and identifying a firms strategic advantages based on examining its distinct combination of assets, skills, capabilities, and intangibles. The most meaningful type of comparisons for RBV analysis at Apple would be Benchmarking and success factors in the industry. Benchmarking is a detailed comparison with key competitors and similar organizations and how they do things. Apple can benchmark its PC and Laptop sales against major competitors like Dell, Gateway, HP and Compaq. For portable MP3 players, they can benchmark against SanDISK, PALM and Sony. For their iTUNES service, they can benchmark against other online music download services such as Wal-Marts service. Apple can also leverage market research and analysis for benchmark on brand recognition, brand loyalty and market and mind share across all its product market. In a comparison with success factors within an industry, a firm reviews its competitors, its vertical integration, customer needs, costs, barriers to entry, availability of substitutes, and suppliers to assess strengths or weaknesses. In terms of RBV, this type of comparison provides the information which will assist Apple in the ascertaining which resources and capabilities are valuable or provide a competitive advantage.

Value Chain Analysis (VCA) disaggregates the business into value-generating activities. Once identified, the activities are allocated costs. Comparison with past performance is meaningful in that historical cost and earnings data in areas of inbound logistics, operations, outbound logistics, marketing and sales, and service could be used by Apple to evaluate where within the chain of activities a cost advantage can be attained by reducing link specific costs, or re-linking the chain to optimize cost savings / earnings. Stages of Industry Evolution would also provide helpful, meaningful VCA data. As an

industry moves through the stages of introduction, growth, maturity and decline, the cost of activities throughout the value chain and the strategies formulated to respond to them will also evolve and change. For example, as the MP3 market begins to move from growth to maturity, supplier and buyers relationships may become more important in terms of value and cost to Apple than innovating new product variants of its iPOD product to add to a quickly saturating market.

3. Which approach to internal analysis works best in your internal analysis of the aspects about Apple covered in this case? Why?

The case centered around two primary points which are the industry trend where key design decisions are now outsourced to outsourced design manufacturers (ODMs) and Apples tremendous industry success and competitive advantage carved out by bucking the trend and keeping innovative, key design decisions in-house.

SWOT provided a useful framework to quickly break down the case study into strengths, weaknesses, threats and opportunities as done in question 1 of this case. VCA divides activities within the firm into two broad categories: primary activities and support activities. Apples value activities flow from its emphasis on design and innovation, constituting the VCA primary activities, through to the manufacturing support activities supplied by ODMs assembling the products Apple designs. However, in context of this case, there was no real cost data provided which could be assigned to the identified in-house design function, the ODM cost savings or other aspects of the value chain as a whole.

For this case, the Resource-Based View (RBV) analysis was more beneficial than VCA for internal analysis as it enabled use of the analysis obtained through SWOT and VCA. RBV allowed examination of Apples unique "bundle" of resources its distinctive products, innovative processes and powerful brand and how these provide an exceptional competitive advantage. Using RBV, Apples specialization, core competency and competitive advantage resides in its design capabilities, it culture and its brand, provide the firm competitive differentiation. One can deduce that Apples design excellence, corporate culture, popular brand and engaged leadership, cannot easily be replicated by its competitors or perfected to the extent Apple has accomplished. This was identified and supported when using SWOT strengths and VCA as well.

Contrarily, outsourcing the manufacturing components makes sense from a cost-advantage

standpoint as the ODMs will certainly have more expertise and manufacturing resources than Apple would in this area of the value chain.