Case Analysis: Apple Inc. in 2010

Professor:
Michael W. Howe

Group member:
Shudan Zheng
Ning Ding
Di Li
Liuquan Wang

COMM 6006
Date: Mar. 14, 2013 1. Vision and mission
As mentioned in Apple’s investors website, Apple’s mission statement is “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.” But it is just a list of products and past accomplishments. Therefore, Another mission statement is “Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.”
Apple’s vision statement is “Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them.” It means Apple lives this vision through the technologies it develops for consumers and corporations and strives to make its customers masters of the products they have bought.
2. Business level strategy of Apple Inc.
Overall, Apple employed a broad differentiation strategy. It achieved successful differentiations in personal computer industry, personal media player industry and mobile phone industry through developing unique products, charging premium prices for its products, increasing unit sales and gaining buyer loyalty. For personal computer industry, Apple’s proprietary operating system and strong graphics-handling capabilities differentiated Macs from PCs. IPod’s stylish design, ease of use and iPod/iTunes combination helped Apple achieved a leader position in personal media player industry.

3. Porter’s Five Forces
The analysis of Porter’s five forces will be addressed to three industries: personal computer industry, personal media player industry and mobile phone industry.

| Personal Computer Industry | Personal Media Player Industry | Mobile Phone Industry | Bargaining power of buyers | The bargaining power of buyers is moderate. Organizations, government and schools that purchase computers in a large volume have bargain power in relation to price, feature and service plan. While personal buyers are price sensitive, and a large part of them do not exhibit strong brand loyalty. Besides, switching cost for buyers is low. | The bargaining power of buyers in this industry is low. Although, there are a lot of competitors, products in some companies made a great success, such as IPod. It is not product’s price but it is product’s differentiation and the brand of product. As a result, Apple can set price for its product and it can push high switching cost to customers. | The bargaining power is moderate. Although customer loyalty exists in the industry, customers have a huge influence in the types of phones, their features, looks and functionality that manufacture produce. All the competitors in the industry are endless trying to catch up with customer demands. Besides, switching cost is relatively low. | Bargaining power of suppliers | The bargaining power of suppliers is moderate. Suppliers provide raw materials and the labor, which is highly proprietary in technology and has the power to influence price. Besides, the switching cost for companies to change their suppliers is relatively moderate. | The power of supplier is medium because, firstly, there are a lot of suppliers, which provide materials for companies, such as flash memory and hard disk. These suppliers mostly come from Asia. Secondly, most companies in the industry have power to negotiate with suppliers regarding the price of material. Third, the demand of digital music player is growing dramatically, so the growth of the market made many companies have to produce