Sculls didn’t top there he also tried to forge an alliance with Apples rival MM, this resulted a gross margin drop of 34% and the termination of Scullery (peg). Ceo Gilbert Amelia then entered the picture with his price differentiation strategy which resulted in 1. 6 billion dollar loss. (peg) As a default Steve Jobs became the interim CEO in 1 997 and that when the company really started to take off. Apple became a well diverse company with the leadership of Jobs they “had 15 product lines which were slashed down to 4 categories- desktop and portable Macintosh’s, for consumers and professionals. (Peg) Not only did hey have 1 5 different products which placed them in several different industries but they tried to depict themselves as “Worlds “greenest lineup of notebooks” that was energy efficient and used recyclable materials” (Peg 4) Rivalry The rivalry in this industry is high with the four top Pc vendors- Hewlett- Packard, Dell, Leno, and Acre accounted for 53. 6 percent Of worldwide shipments. (Peg 5) Even though it was Apple who founded the first personal computer it was IBM that brought them into the conventional lives of society.
Within this time period there were a lot of mergers and acquisitions making pillar amongst firms even greater as every time this occurred these merged companies would have more market share and more capital to help their business. Threat of substitutes A lot of these products were similar in many ways and allowed consumers to do pretty much the same things. For example a Laptop had a camera as did an pad as well as a ultra book, an phone and an pod.
All of these products could also go on the internet and have programs like Microsoft office. Competitors also had the same attributes so I would say threat of substitutes is high. Threat of new entrants Although there are many competitors in the industry I was say the threat of new entrants is low. First the amount or capital that you will need to enter this industry is very high and without consumers knowing and trusting your brand there would be no way to compete with companies like Apple and Leno.
Bargaining power or buyers “Pc buyers fell into 5 categories home, small and medium sized, corporate, education and government” (Peg 5) later on bigger manufactures started to buy these products such as Cost, Best Buy and Walter. In turn this made he bargaining power of buys high because there were so many substitutes and many places where you could purchase them. However it is to be noted that Apple started to have really loyal customers which made the price inelastic as consumers would begin to pay anything for a new Apple product.
Bargaining power of suppliers ” Suppliers were divided into 2 groups those that made products such as chips, disks and drives and keyboards with many sources and those that sold products like microprocessors and operating systems which had a few sources” (Peg 6) Even though the second first category had many suppliers hey still had high bargaining power as the had extremely competitive prices. The second category had even more bargaining power as only 2 firms were supplying those parts.
Overall the industry is very unattractive with rivalry, bargaining power of buyers and suppliers being high as well as threat of substitutes. I would not suggest entering this industry. Also bayou just look at how many different Coo’s Apple had and what a struggle they had one can easily see that this is a brutal industry. Q. What (generic) competitive strategy did Apple pursue? Briefly support our argument using any advantages this strategy draws upon (your answer here may help with Q below). Assess the viability of the strategy given the competitive situation at the time Of the case. 0% Apple went through several different strategies throughout its lifetime. Just to name a few Apple went through a low cost strategy with Sculls, (Peg 2) then a price differentiation strategy with Gilbert Amelia. Currently feel that Jobs has implemented a product differentiation strategy. Job was so serious about being original he even created dummy positions for new recruits until they loud be trusted (Peg 4). His products and software was to be kept hidden until realized to the public, as well as Jobs did not want to license any of his software of products to anyone else.