QuestionQuestion

Apple Inc.in 2012
Q1
Apple did better in its iPod business than it did in its PC business. Explain why. Justify your answer through the application of industry analysis and other concepts discussed in Weeks 1 and 2.

Q2
Perform an industry analysis of the smart-phone industry. Do you believe Apple was effective in neutralizing the threats and capitalizing on the opportunities posed by the forces in the smart-phone industry? If yes, explain how. If not, explain why not.

Q3
What kind of competitive advantage and business strategy did Apple pursue for its iPhone business? What value chain activities were used to achieve this competitive advantage and were they effective in doing so?

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Answer 1:
The performance of Apple was better in the iPod business since iPod was an innovative product and it provided features that were not provided by existing players. On the other hand, in the PC industry, Apple faced stiff competition from players like IBM that had been consistently reducing prices and the high intensity of rivalry made it difficult for Apple to compete successfully. Since its launch, iPod was seen as a device of the digital age as it had many differentiating features such as simple user interface, sleek and trendy design, large size, etc. When compared to the other products that could store one hour of music at the utmost, iPod had the potential to store over 1,000 songs and appeared to be a valuable proposition. Moreover, Apple had also developed the iTunes and Music Store that helped the consumers to sort, download and play the songs of their choice. This was a breakthrough innovation in the market for MP3 players since no other competitor was offering all these features and Apple got the first-mover advantage in this segment. Steve Jobs had envisioned the strategy of creating a digital hub and the iPod was consistent with the strategy that led to creation of significant consumer interest. Though Apple faced competition in the iTunes segment since players like Napster, Wal-Mart, etc. were also offering cheaper subscriptions for songs download, they did not provide any specific hardware like Appleā€™s iPod. Apple had also been acquiring music streaming companies such as Lala.com so that it could offer...
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