case study 5.1.docx - Read Mini Case 6 Apple Whats Next And answer the questions following the case study Apple Whats next IN EARLY 2015 Apples stock

case study 5.1.docx - Read Mini Case 6 Apple Whats Next And...

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Read Mini Case 6 Apple: What’s Next? And answer the questions following the case study. Apple: What’s next? IN EARLY 2015, Apple’s stock market valuation reached $775 billion; making it the most valuable public company of all time.1 this made Apple twice as large as Exxon, the number two. Not even 20 years earlier, Apple would likely have gone bankrupt if archival Microsoft (which enjoyed the same position with a valuation of $615 billion in December 1999) had not invested $150 million in Apple. How did Apple become so successful? Apple became the world’s most successful company based on a powerful competitive strategy. That strategy, conceptualized by co-founder Steve Jobs, combines innovation in products, services, and business models. From near-bankruptcy in 1997, Apple’s revitalization really took off in 2001 when it introduced the iPod, a portable digital music player, the same year it opened its first retail stores. Apple’s stores now earn the highest sales per square foot of any retail outlets, including luxury stores such as Tiffany & Co. jewellery or LVMH, purveyor of fine handbags and other luxury goods. In 2003, Apple soared even higher when it opened the online store iTunes. Apple didn’t stop there. In 2007, the company revolutionized the smartphone market With the introduction of the iPhone. Just three years later, Apple created the tablet computer industry by introducing the iPad, thus beginning to reshape the publishing and media industries. Further, for each of its iPod, iPhone, and iPad lines of businesses, Apple followed up with incremental product innovations extending each product category. By combining tremendous brain power, intellectual property, and iconic brand value, Apple has enjoyed dramatic increases in revenues. A Good Strategy Why was Apple so successful? Why did Microsoft’s once superior market valuation evaporate? Why did Apple’s competitors such as Sony, Dell, Hewlett-Packard (HP), Nokia, and BlackBerry struggle or go out of business? The short answer is: Apple had a good strategy. But this begs the question: What is a good strategy A good strategy is more than a mere goal or a company slogan. A good strategy defines the competitive challenges facing an organization through a critical and honest assessment of the status quo. A good strategy also provides an overarching approach (policy) on how to deal with the competitive challenges identified. Last, a good strategy requires effective
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Implementation through a coherent set of actions. A good strategy, therefore, consists of three elements: 1. A diagnosis of the competitive challenge. 2. A guiding policy to address the competitive challenge. 3. A set of coherent actions to implement the firm’s guiding policy. THE COMPETITIVE CHALLENGE. First, consider the diagnosis of the competitive challenge. Above, we briefly trace Apple’s renewal from the year 2001, when it hit upon the product and business-model innovations of the iPod/iTunes combination. Prior to that, Apple was merely a niche player in the desktop computing industry and struggling financially. Steve Jobs turned the sinking company around
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  • Spring '15
  • Valuation, Personal computer, ITunes Store

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