Strategic Analysis of Apple Inc.

Case : Apple’s iPod system: iPod, iTunes and Fairplay

Introduction

Apple was founded in 1976 in a garage of Santa Clara, California. It is the brainchild of Steve
Wozniak and Steve Jobs. They sought after providing a user friendly computer to a new and
distinct market of small computer users. Under the leadership of Jobs, Apple has become a
world leader in advanced and innovative technology. It continues to forge ahead in design
with the introduction of the iPods, iTunes, iPhone and now the iPad.

Apple’s Vision and Mission

Vision is the picture of the company in future, which provides the inspiration and framework
for all strategic planning of the company.

“Man is the creator of change in this world. As such he should be above systems and
structures, and not subordinate to them."

Apple lives this vision through the technology it develops both for consumers and
corporations and by making them master of the products they purchase.

Mission Statement
Mission statement is defined as a company’s identity through the company’s belief, value and
purpose which give the company direction, legitimization and motivation. 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."

Internal Environment:
Carpenter and Sanders (2009) define internal environment as the company’s internal resources and
capabilities, which provide core competencies for the company to achieve competitive advantage and
earn above average return.
VRIO Analysis:

Resources and Value Rarity Inimitable Exploited by Competitive

capabilities Organization Advantage

Steve Jobs, CEO     Sustained

Brand/name     Sustained

Logistics     Competitive Parity

Design/ Product     Competitive Parity

Innovation     Sustained

Digital Rights     No Competitive

Management (DRM) advantage

Customer Loyalty     Sustained

Apple’s most important resources are its large cash reserves, CEO Steve Jobs and integrated system
of hardware and software that the firm has developed and successfully marketed to derive value.
While Apple’s designers, programmers and engineers, each represent key resources, the ability to
exploit their abilities to create their entire hardware and software ecosystem, is the firm’s key
capability. Taken each individually, the resources only represent competitive parities and temporary
advantages. The combination is their key capability that has established a sustainable and ongoing
competitive advantage and above average performance within the industry.

External Environment:
Social factors: The social factors that affect a firm involve the beliefs, values, attitudes,
opinions, and lifestyles of persons in the firm's external environment.

Political factors: are most likely to influence factors such as industry sector subsides,
foreign policy on imports, tax systems and legislation.

Social factors: The social factors that affect a firm involve the beliefs, values, attitudes,
opinions, and lifestyles of persons in the firm's external environment.

Political factors: are most likely to influence factors such as industry sector subsides,
foreign policy on imports, tax systems and legislation.