Competitive Strategy

- Differentiation
The story behind Apple

Put Together by-

Anand Singh
Anubha Garg
Ajinkya Diwan
Sinto Inasu
Rachel Roberts
Sayan Das
24th March,2010
 The Five Generic Competitive Strategies
Type of Advantage Sought
Lower Cost Differentiation

Broad Range Overall Low-Cost Broad

of Buyers Leadership Differentiation
Market Target

Strategy Strategy
Best-Cost
Provider
Strategy
Narrow Focused Focused
Buyer
Segment
Low-Cost Differentiation
or Niche Strategy Strategy
 Differentiation
• An integrated set of actions designed by a
firm to produce or deliver goods or services
that customers perceive as being different
in ways that are important to them.
•
• Differentiation strategy means that the value
is provided to customers through the unique
features and characteristics of a company’s
products rather than by the lowest price.
•
• Objective - Incorporate differentiating features
that cause buyers to prefer firm’s product or
service over the brands of rivals
The Benefits of Successful
Differentiation:
• A product / service with unique and
appealing attributes allows a firm to
– Command a premium price and/or
– Increase unit sales and/or
– Build brand loyalty
= Competitive Advantage

 Activities that create value for a
product or service through the
differentiation strategy
• Inbound Logistics
•
• Operations
•
• Outbound logistics
•
• Marketing and sales
•
• Service
Types of Differentiation
 Quality – Design is the same but
better
–
 Design - Technical differences
–
 Service – additional customer
services
–
 Image – Brand name
 Apple Introduction
• Established on 1st April 1976 by Steve
Jobs, Steve Wozniak and Ronald
Wayne
•
• American MNC designing and
manufacturing Consumer electronics,
computer software's and commercial
servers.
•
• Company's best known products
include Macintosh computers, the
iPod, the iPhone and the iPad
 Company Overview
Mission:
"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."

Vision:
"Man is the creator of change in this world. As such he should be above

systems and structures, and not subordinate to them"



Industry:
2. Computer software & hardware
3. Consumer electronics
Computers before...
How did Apple
Differentiate...
 How did Apple Differentiate
No more beige/white/black box

Single piece product

Infrared Port

Inbuilt Surround Sound Speakers and
Microphone

First computer to offer USB ports as
standard offerings

Removed the 3 ½ -inch floppy drives



 Apple Laptop
• Apple actually invented the modern
laptop computer with the
Powerbook. It was the first laptop
that had a TFT screen - the first
modern LCD screens. It was the first
laptop that pushed the keyboard
up, creating palm rests, and had an
integrated pointing device.
Apple iPod
 The iPod Story..
• Portable media player designed by
Apple
• Product Line includes –
– iPod Touch
– iPod Nano
– iPod Shuffle
– iPod Classic
• Allows customers to download music,
books and other literature that can
be read and listened to.
 Product Differentiation
• iPod Shuffle:
– Basic MP3 player


• iPod Nano:
– Compact media player – 4000 songs on
16GB version + Videos + Photos +
Games



 ... Contd
• iPod Classic:
– 120GB Hard Disk drive
– 30,000 songs + movies + TV serials
–
• iPod Touch:
– MP3 + Wi-Fi
– Download Music + Video + Games
– Send and receive E-mails
 Differentiating parameters
in iPod
• Consistent Quality
• Innovation
• Style
• Extras
• iTunes

 Competitors
Zune Creative

Samsung iRiver
iPhone - What a Phone can
do?
 iPHONE- Differentiators
• Built-in features of multiple tools into one
handheld device.
• Accessibility to internet and email usage ,portable
media player-iPod, gaming machine, camera
with 3 mega pixels , GPS technology, 3G
technology and many more.
• A version of Apple's iTunes music store.
• The use of a new consumer user interface (UI) and
the deletion of so many buttons and choices.
• A single, simple-to-carry thing to maintain and
backup, applications and data always with you.
Not bulky, nor a burden.
 Score (10 = highest)

10

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Factors of Competition
S
cr
P ee
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iPhone differentiation

C
fu
nc
t io
na
lit
y
competition
iPhone vs. the

Pearl

RAZR
iPhone

Motorola
Blackberry
 Competencies

v iTunes :
Synchronization
between the iTunes -
App store and Apple
devices.
v User interface of
consumer gadgets
and computing
devices
vIntuitive design,
 Core competence
Users’ experience

Source: http://blog.wired.com
 Strategic
recommendations
o n:
t i
fi ca no,
si a
ver e N iz…
Di hon e B
ip hon
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Expansion:
M&A, alliances,
partnership…

In
sm nov
Ap ar at
pl t-c ion
e ar :
cl d,
ou
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…

__APPL-IZATION__
 What Can Make a
Differentiation Strategy Fail
• Trying to differentiate on a feature
buyers do not perceive as lowering
their cost or enhancing their well-
being
• Charging a price premium that buyers
perceive is too high
• Failing to signal value
• Not understanding what buyers want
or prefer and differentiating on the
“wrong” things