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Analysis of An Based On The Willingness To Pay.: Unsuccessful Competitive Strategy
Analysis of An Based On The Willingness To Pay.: Unsuccessful Competitive Strategy
2. The Failure
Insights
3. The Take-
Aways 2
Apple has never been
just another consumer
From the
very
beginning
Apple
thought
differently..
.
4
They sustained an
environment that supports
Macintosh and
They introduced the
reinvented the way the world
used computers forever with it’s
They substantially
changed the
music business
model
iPod,
by introducing the
itunes & the store
...
They made
innovation a reason
By
(re)inven and
ting crossing
technolo borders ...
gies
not follow markets,
Apple does it
creates them.
Like no one else Apple
stands for imagination,
innovation and design.
... and thus they made
millions of customers 12
And in the
battle ...
13
14
By creating, capturing and
sustaining value it became the
most admired company in the
world in 2008, 2009 and 2010 ...
15
Fortune Magazine
But Apple's
successes over its
33-year history
don't make
up the
whole
story.
Their path to success has
alwasy been bumpy.
Apple has made serious
product missteps & survived
spectacular failures ...
One started as a secret
reinvent
project to
personal
computing ...
aka as Message Pa
2. The Failure
Insights
• Product Facts
• Five Forces
• Value Chain
• Willingness to Pay
22
Newton Key Facts
• 1993 - 1998
Newton Specifications
• Newton OS • Handwriting
• Data transfer - Calligrapher
with various • Fax, E-mail and
platforms PIM (Personal
- Mac OS Information
- Linux Manager)
- MS Win.
Operati Smart
ng Functio
System n
CPU and
Connectivit
Hardwar
y
e
• Mac Serial Port
• ARM 610
• PCMCIA Card (20MHz)
• Wireless • 4MB ROM
802.11b
• 0.41Kg, HXWXD
& Bluetooth
(18.4X11.4X1.9)
• Serial modem
Newton Specification (OMP : Original
The PDA Market
Bargaining
Power of
customers
Rivalry
Bargaining among
Threat of
Power of competito Substitutes
Suppliers
rs
Threat of
new
entrants
25
Bargaining power of
buyers is high ...
• Large number of
competitors
(i.e. HP, Palm, etc)
Buyers can base their
decisions on price
• Informed buyers
– PDA buyers knowledgeable
about technology and
competing products
• Low switching costs
• Low market size
Bargaining power of
suppliers is high ...
• Highly customised
components
– High switching costs
– Unique inventories (i.e.
Operating system)
27
Barriers to entry are
high ...
• Proprietary product
differences protected by
patents and copyright laws
• Costly to overcome
advertising programs of
existing PDA manufacturers
• Buyer propensity to
substitute
– Unsatisfied customers
can always go back to
earlier alternatives
• Low switching costs
– Customers can easily
switch to other brands
• Substitutes are
comparable in price and
performance
Rivalry among
competitors is intense…
• High concentration of competitors
with the technological expertise
– Sharp, Casio, HP
• Slow market growth & low
switching costs
– Manufacturers will be vying for
market share
• Large R&D investment
– High exit barrier
– Heavy investments will need to be
recouped resulting in extreme
competition and forcing price wars
Conclusion 5 Forces
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Apple‘s Value Chain
Firm Infrastructure
Human Resources
Techology Development
Procurement
Outbou
Inbound Marketi
Operati nd
Logistic ng & Service
ons Logistic
s Sales
s
32
Inbound Logistics
• Innovation
– 1983 – Among the first commercially available mice
– 1984 – Successful introduction of a GUI PC
• Design
– Good physical design essential to generate relationship with
customer
– Good design extends to
packaging
– Human touch
Marketing and Sales
Ad 1984
Service
• AppleLink
– Online service for users, dealers and developers
– First online service to use easy-to-use graphics,
windows and icons
• America Online
Procurement
• Ecosystem of suppliers
– Key components purchased from single suppliers
• Timely delivery
• Relationships help drive planning
– Components purchased from multiple sources
– Software applications developed
by an array of software vendors
Technology Development
• Culture of Innovation
– Incubator for the best designers and engineers
– Artistic values as important as commercial ones
• Culture of Entrepreneurship
– Empowering employees
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4. SNAJKsajk
If Apple was capable of
delivering value to their
customers ...
• Innovation
– Technology innovation for the sake of innovation
• Impractical Design
– Too big to carry around
– No attractive styling
Newton Failures:
Marketing and Sales
WT
P
Price
$699.99
WT
P
Cos Cos
t t
Poor Market
Communicati Immaturity/F
on amiliarity
+ +
Software
Competition
Performance
+ +
Negative
Impractical
Press
Design
Coverage 51
3. The Take-
Aways
52
1. Brilliant ideas are
worth nothing without
excellent
implementation.
53
2. Really understand
your customer needs.
Don’t innovate
for the sake of
innovation.
54
3. Getting carried away by
past success.
56
5. Press is crual.
You got only
one shot.
57
6. Deliver what
you promise.
Customers
are merciless.
58
7. Even brilliant
ideas fail when
environment
is not ready.
59
Back up
61
62