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Itunes Case

Itunes Case

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Published by: Muhammad_Awais_3864 on Feb 16, 2010
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Apple Inc. 1Apple Inc.Gwen JohnsonSJ LeeMichelle Middleton Nigel NgaiGreg PalmeriBusiness CapstoneProfessor LeeMarch 5, 2008
 
Apple Inc. 2Executive SummaryApple Inc. is a company that designs, manufactures, and then sells desktop and notebook computers, portable digital music players, and cell phones. It also creates software like the OS Xoperating system, iLife, iTunes, or QuickTime; and peripherals such as printers or storagedevices that go with these products. T
he biggest challenge Apple is facing is that consumers arereluctant to pay for songs and thus, Apple is losing customers to its competitors who are offeringmusic at a lower price. This can be seen in increased piracy and code hackers.
We came up with two possible solutions to address Apple’s challenges. The first is tocreate a streaming music system. Using the currently existing streaming music program,customers can choose stations from different music categories. With a more personalized systemthey could choose stations that play music similar to an artist they already like. While thestreaming music is playing customers would have the option to buy the song as well. The secondoption is to open up their music file sharing program with an all encompassing price. Applestands to benefit significantly in the future from building a closed community with artists andconsumers which will enable the company to compete more aggressively with record companieswhile also building a closed network which minimizes hacker risk.The second option of the closed community
 
solves the main issues faced by Apple, likethe loss of customers to competitors and dealing with illegal downloads from consumers, whichis why we found this to be the best option for Apple to pursue. Its overall purpose is to deliver acompetitive music package with top security, which adds value and significant competitiveadvantage to Apple’s current processes.
 
Apple Inc. 3Table of Contents1. The Strategy of Apple Inc. ………………………………………42. Strategy Evaluation ……………………………………………52.1 Michael Porter’s Five Forces Industry Analysis ……………….5Table 1:
 Porter’s Five Forces
……………………………………..62.2 The VRIO Assessment …………………………………………8Table 2:
 Assessment of the Apple, Inc.’s Internal Capabilities
…...93. Strategic Option:
Streaming Music
……………………………...103.1 Evaluation of the
Streaming Music
Strategy …………………..104. Strategic Option:
Closed Community
……………………………124.1 Evaluation of the
Closed Community
Strategy ………………...125. Strategy Selection and Implementation ………………………145.1 Sequence of Implementation …………………………………...156. Apple’s Competitive Advantage ………………………………...15

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