Debriefing- Apple-Leadership and transformational org change

Steve Jobs

started apple in 1976, fired 1985, transformed several industries, the culture behind the man, the value of simplicity, never compromise, play your A game with A players

what are apple's competitive advantages-

• ease of use

• strength in desktop publishing and education

• buyer loyalty

• proprietary system: can't copy system (supports higher margins and creates barrier to entry)

• brand recognition

• ecosystem of complements - across all devices

• creative design

The Computer Industry

Dynamics in the PC Industry, By analyzing the PC industry are the dynamics favorable or problematic for Apple

Lets look at the buyers

who buys: IT department in a corporation, large amounts, they are smart and knowledgeable, service is important but are they willing to pay for it; focus on brand or price (price)

Rivalry within the industry?

All brands are interchangeable e

The results of rivalry

reductions in prices, PCs are commodities (all compete based on price and interchangeable), rapid technology obsolescence, strong sophisticated buyer, bottom line-very tough industry

Barriers to Entry

easy assembly, standardized components, distribute online, price-sensitive customers, barriers to entry are very low, can compete with dell can assemble very easy to distribute

Substitues

lots of choices, smartphones, tablets, TV set-top boxes, chromebooks,

Suppliers

component suppliers (have no power because products are commodities), the only suppliers that earn money are Intel and Microsoft (barriers to entry are high)

PC industry summary

sophisticated powerful buyers, vicious rivalry, low barriers to entry, lots of substitutes, suppliers make profits, terrible business

Where does Apple fit in this picture?

not directly in PC business, high barriers, loyal customers, more than just a PC company

Macs and Pcs are

substitutes

Decling PC prices

put pressure on Mac

Limited software for Macs

not many third party softwares; write for PC market because larger

Falling software price hurt Mac

independent software vendors are going to make less money for Mac version

Biggest ISV is

Microsoft; will support Windows

It costs Apply $1 billion to develop OS

takes longer to breakeven than Microsoft

How did Apple try to solve these issues?

focus on high volume and low price but the result was not so good

Low price

cut unnecessary costs, requires research and development marketing budget

When Jobs returned he focused on

traditional mac lovers (used design and marketing for premium apple products), retail stores to expand brand, shift to Intel processors

Apple only has

12% market share; 88% of market goes to traditional PC

Can apple sustain its iPhone

yes! app store (gets money without doing anything), economies of scope (all share same branding and costs among options), buyer loyalty, strong growth in corporate

Can apple sustain its iPhone

no! strong competition from android, fashion or fad?, competition from china

Apple Watch

first major innovation since Job's death, strong demand, more features than competitors, high margins, but limited to apple ecosystem

Next innovation?

tv market, automobiles, healthcare, glassses

Broader lessons from apple

product advantage vs competitive advantage (the entire value system of a company not just product)

Extraordinary results requires

extraordinary thinking

Which is the most valuable company today?

Apple: biggest public

Which is the first company to be worth over 1 trillion dollars

apple