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Dancel, Aira Bianca C. BSA-4 Mr. Alex M.

Four Specific Criteria: Strategic Capabilities

February 14, 2014 Business Policy & Strategy WF 1:00-2:30

In creating a sustainable competitive advantage, the correct deployment of the resources is seemed very important. And this can be done through the combinations of the four strategic capabilities that are valuable, rare, costly to imitate (inimitable) and non-substitutable. Well, lets define each of these capabilities and lets put these in the case of Apple: 1. Valuable Capabilities These capabilities help a firm to neutralize threats and exploit opportunities. In these capabilities, it could be achieve if they could provide value to their customers and satisfy their needs. In the case of Apple, their company is highly possessed these capabilities, because they have the key factors in their products that I believe these factors could satisfy their customers such as having an attractive and unique design (e.g. the halo effect in iPods, the touch pads in iPhones etc.), ease of use of enhanced and new published features and hardware (from Macintosh such as desktop, mouse, graphical file systems, applications running inside windows and more), good security and bundled powerful software (such as Microsoft Office for Mac, video-editing programs, iTunes etc.) that all contributes to an "Everything-ready" system that is very easy to use. Another key resource of these capabilities of Apple is their Apple stores which offers its very own unique retail experience for their customers and can be used to further enhance their brand recognition. It is considered as one of their valuable capabilities because it creates quite some good revenues for their company. 2. Rare Capabilities Rare capabilities are capabilities that are possessed by few current or potential competitors or in other words these are the capabilities that are unique or relatively scarce among companies within a business sector. Taking it in the case of Apple, I can say that the Apple also possessed these capabilities because they have their own operating system (Mac OS X), integrated application software and hardware (iTunes, etc.) unique and sophisticated user-friendly designs of their products and very innovative and strategic ideas/vision and leadership which are taking care of by Steve Jobs with the help of his good business partners and employees. But I can say Apple dont possessed these as highly as valuable capabilities do, because for me, theres some point it is hard for all the PC industry not just with the Apple to obtain these capabilities because all the PC industry like Apple also function with a largely standardized parts/components that are used in building PCs like keyboards and mouse. 3. Costly to Imitate Capabilities Capabilities that are costly to imitate (inimitable) cannot easily be copied by other firms. Among the four capabilities, it is the most important because they allow a company to be different from its competitors. Without this, a company could not last its competitive advantage. Think of the case of Apple, in my opinion, these capabilities is also highly possessed by the Apple (like the valuable) because the Apple has all the factors to become inimitable.

They have the [1] unique historical conditions Apple Computer Inc. demonstrate a history of innovation. From its beginnings and introduction of the Apple II, to the Mac, to its more recent iTunes and iPhone, Apple has managed to maintain a competitive advantage and in recent years been able to stay ahead of its competition. hey have the * + property rights I believe all the Apple designs and soft are are protected by property rights such as patents. * + Comple ity Apples designs in their products cannot copy by their competitors that easily with the same success because of the best quality and complexity in their products uni ue and distinctive style(e.g. the iPods halo effect). And finally * + brand image recognition I can say that Apples brand name is a very po erful one because of the good public trust and perceptions to the Apple. 4. Non-substitutable Capabilities Finally, non-substitutable capabilities are capabilities that do not have strategic equivalents or possible substitutes. Putting these in the case of Apple, in my opinion it should be based on between the two different aspects. The first aspect is the target market. Since the Apple Computer Inc. focused on the high end customers, these capabilities is highly possessed, because based on what I have researched no other company in PC industry can be compared to Apple because of its very own, unique and distinctive characteristics. And as high end customers they are after with the best quality with very good features of the application software and hardware in a PC. On the other hand, the second aspect is the usage of a PC of a consumer. Apple is lowly possessed these capabilities if a consumer is just after with the simple use of a PC and not after into the signature brand names, additional functions and characteristics of it. And thats a problem for Apple because except from them there is always a substitute for a certain PC.