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Q1) What historically have been Apples competitive advantages?

Premium price differentiation strategy


Industrial design
Technical elegance
Innovation
Easy to use and good user experience
Complete desktop solution
Extreme practices of secrecy- closed door policy
Multimillion dollar marketing campaign including catchy slogans
Energy efficient and recyclable line of notebooks
Strong distribution system - retail
Digital hub
Launched an App store which made it easier to distribute, access and
download apps

Q2) Analyze the personal computer industry. Are the dynamics of pc industry
favorable or unfavorable for apple?
Bargaining power of suppliers
Suppliers were divided into 2 categories
1) Those who made the products with many sources- bargaining power is low
2) Microprocessors and operating systems that had few sources- bargaining power
is high
Conclusion- most of the suppliers have low bargaining power except Microsoft and
Intel
Bargaining power of buyers
B2B
Corporate and medium-sized enterprises buy products in large volumes
Business consumers had a high need of service and support
B2C
IBM dropped prices to very low levels and made Apple PCS looked exorbitantly
high
They had options of lower priced products, which satisfied their needs
How knowledgeable they are about the products
Buyers value design mobility and wireless connectivity
CONCLUSION- There was high bargaining power in the hand of buyers as they
had a multitude of products to choose from.

Threat of new entrants:


White box channel- featured generic machines, assembled by local
entrepreneurs
Conclusion- EASY to enter the market- anyone can assemble the product and
target the consumers by providing low cost alternatives
Threat of substitutes
For the PC industry, substitutes would include tablets, smart phone etc.
These substitutes have impacted the sales of PC. So threat of substitutes is high.
Rivalry within the industry
Presence of brands such as Lenovo, HP , Dell, Acer etc. Which accounted for
53.6% of worldwide shipments, offered lower price products thus,, increasing the
competition within the industry
In software industry, had competition from Windows OS, UNIX- Windows more
preferred as it is more user friendly
Conclusion- Due to intensive competition, rivalry was high.

Q3) How sustainable is apple in pc


Apple moved to Intel that has certain pros and cons
It is sustainable because it is continuously innovating new product, identifying the
consumer needs, premium price differentiation category. It is also recognizing the
substitute products that could take its place and is foraying into those areas.

Ans: Pros:
-

Incorporation of Intel made Mac computers faster and energy efficient


Market share increased from 1.96% to 2.6% within a span of 3 years
Could natively run Microsoft Windows along with Windows applicationmajority of computers were using Windows, thus, it provided an additional
functionality

Cons
-

Intel had more power as a a supplier, thus, Apple didnt have the bargaining
power
Apple was freely advertising for Intel, and Intel was getting more highlighted