market strategy presentation

Presented to you by Study Group A

RBV & Positioning School

HQWalls.com.ua (n.a.)

Introduction&

the RBV

Implications of the RBV on Apple Inc.

Discussion

IntroductionStrengths &

Weaknesses of the RBV

Application of the RBV on Apple Inc.

the Positioning School

Strengths & Weaknesses of

the PS

Application of the PS on Apple Inc.

Discussion Conclusion References

The Resource Based ViewStrengths

• Understanding the importance of ‘firm

resources’ (Barney, 1991, p. 101)

• Internal audit for resource value: VRIN

(Carter et al, 2010, p. 56)/ VRIO and

value chain (Barney and Hesterly, 2005)

• Resource allocation and reallocation

The Resource Based ViewStrengths

• Sources of competitive advantage and

ways to sustain them

• The impor tance o f knowledge

management (Carter et al, 2010, p. 61)

The Resource Based ViewWeaknesses

According to Dierickx and Cool (1989):

• time compression diseconomies

• asset mass efficiencies

• interconnectedness of asset stocks

• asset erosion

• causal ambiguity

The Resource Based ViewWeaknesses

• tautological (Priem and Butler, 2001 a,b)

• difficulty in finding resources for

satisfying VRIN criteria

Introduction&

the RBV


Discussion






the PS



The Resource Based ViewApplication to Apple Inc.

Fernandes (2011), Oldcomputers (no date),

Loeb (2011),AppleMuseum (no date),

Moore (2008),Kochmanski (2011),

Atkins (2010),JoBrad (2010).


• Steve Jobs






• Steve Jobs

• Product line consolidation






• Steve Jobs


• Redesign and Reposition






• Steve Jobs



• Retain on earnings and Investment






• Steve Jobs




• Creation of New MarketFernandes (2011),

Oldcomputers (no date),Loeb (2011),

AppleMuseum (no date),Moore (2008),

Kochmanski (2011),Atkins (2010),JoBrad (2010).


• Steve Jobs




• Creation of New Market

• Product DifferentiationFernandes (2011),

Oldcomputers (no date),Loeb (2011),

AppleMuseum (no date),Moore (2008),

Kochmanski (2011),Atkins (2010),JoBrad (2010).

Introduction&

the RBV


Discussion






the PS



The Positioning School• An outside–in model

• Porter (1998) explains the model with his 5 forces framework together with generic strategies.

• He also uses factors to understand the industry such as:– industry growth rate– technology and innovation– government– complementary products/services

(Porter, 1987), (Porter, 1998)

Introduction&

the RBV


Discussion






the PS



The Positioning SchoolStrengths

• Considers the macro environment with all its indicators

• ‘A framework for anticipating and influencing competition (and profitability) over time.’ (Porter, 2008)

• Applicable to all industries and helps investors to predict shifting’s in the industry structure (Porter, 1980)

• Understanding customer needs and implementing them on strategy (Ketels, 2005)

The Positioning SchoolWeaknesses

• Can end up being too broad of a view

• May lead to not analysing the most important force

deeply enough

• Not considering the company’s inner strengths

• Only analyses the macro environment

Introduction&

the RBV


Discussion






the PS



PC Market

The Positioning SchoolApplication to Apple Inc.

Rivalry among existing competitors

15wkc-italy (no date),MobileFone (no date),

Dell (no date),Selasa (2011),

Gohring (2010),Price (2011).

PC Market

• Main rivals: HP, Dell, Acer, Lenovo






PC Market


• Market is fragmented – No leader


LEADER





PC Market



• Consolidation (Compaq ➠ HP, IBM ➠ Lenovo)






PC Market



• Consolidation (Compaq ➠ HP, IBM ➠ Lenovo)

• Growth in sales volume driven by lower prices

(economies of scale)


⇪Sales Volume





Threat of substitutes

• Tablets, netbooks, smar tphones, sony

playstation

• Apple offers a variety of products that

often have overlapping utilisation

• ‘Easier product accessibility’ (Porter, 2008)

The Positioning SchoolApplication to Apple Inc. PC

Market

Apple (2011b)

Threat of new entrants

• Eastern Countr ies – new entrants

competing on price

• New entrants are not a significant threat

for Apple since it is a ‘Premium Brand’


Market

Apple (2011b)

Bargaining power of suppliers

• Low bargaining power of suppliers

against Apple

• Apple is being their own supplier for

almost every part of their products

• Intel is the only supplier that Apple

depends on


Market

Apple (2011b)

Bargaining power of buyers

• ‘The digital hub strategy’ – Apple is creating

products that supports the new technology

lifestyle

• ‘Brand image’ – Apple minimises the

bargaining power of buyers. They believe

customers will pay certain amount for

‘perceived value’ (exhibit 1-c)


Market

Apple (2011b)

• SanDisk, Creative and Samsung – cheaper

products

• Apple gets the competitive advantage with

iTunes

• Apple differentiates iPod with cool design


MP3 Market


Apple (2011d),Apple (2011e)

• This is the biggest threat for iPod from

Porter’s five forces

• Smartphones


MP3 Market



• Very low


MP3 Market



• Apple decreased the power of suppliers by

up-front deal with Intel and Micron, Apple

insured the best price for their main cost

component (flash memory)


MP3 Market



• Lowers the bargaining power of buyers by

creating an eco-system around their

products (iTunes, dockstations, cases etc.)


MP3 Market

Bargaining power of buyers



• Samsung, HTC, LG Electronics – Android

• RIM, Nokia

• Apple differentiates iPhone with first

fingertips touch screen together with its

sleek design


Smartphone Market

Apple (2011a)


• Very low threat of substitutes (cell phones,

tablets)


Smartphone Market

Apple (2011a)


• The market is no easy to enter because of

the established brands and high technology

level


Smartphone Market

Apple (2011a)


• There is low bargaining power of suppliers

against Apple


Smartphone Market

Apple (2011a)

• Eco-system (App Store)


Bargaining power of buyersSmartphone Market

Apple (2011a)

• New market – no existing rivalry


Tablet Market


Apple (2011c)

• Kindle, e-book, netbook


Tablet Market


Apple (2011c)

• Future penetration of rivals (HP, Dell)


Tablet Market


Apple (2011c)

• Apple replaced its microprocessor

supplier – Intel by producing their own

improved microprocessor A4


Tablet Market


Apple (2011c)

• Currently there is low bargaining power of

buyer because there is no existing

competition


Bargaining power of buyersTablet Market

Apple (2011c)

Introduction&

the RBV


Discussion






the PS



The Position school is the most appropriate strategy perspective for

marketing!

The Position school is the most appropriate strategy perspective for

marketing!

is it?

• In the light of the current market situation and the five forces explained above, the ‘positioning school’ is applicable to Apple in the way that it uses Porter’s suggestions to position themselves in the market as differentiators

• On the other hand, the strategy does not fit very well with Apple in terms of core competencies (innovation) ➠ RBV


Conclusion

Introduction&

the RBV


Discussion






the PS



Conclusion• Steve Jobs responded to the outside factors

(positioning school) and restructured the company using internal resources (RBV)

• Brand is bigger than its products – symbols, logo. It is no longer a computer company. It is a lifestyle company

• Apple found a good balance between the two strategies and it is taking the most applicable parts of both to create its own strong, successful strategy

Introduction&

the RBV


Discussion






the PS



References15wkc-italy (no date) ‘Acer-New logo’, 15wkc-italy [Online], Available at: http://liten.be//Gjt7T (Accessed 23 October 2011).

Apple (2011a) ‘Compare iPhone models.’, Apple [Online], Available at: http://liten.be//Vf1IA (Accessed 24 October 2011).

Apple (2011b) ‘iMac’, Apple [Online], Available at: http://liten.be//Lfj7T (Accessed 24 October 2011).

Apple (2011c) ‘iPad’, Apple [Online], Available at: http://liten.be//vaEbf (Accessed 24 October 2011).

Apple (2011d) ‘iPod classic’, Apple [Online], Available at: http://liten.be//2E7vE (Accessed 24 October 2011).

Apple (2011e) ‘iPod touch’, Apple [Online], Available at: http://liten.be//U79Tu (Accessed 24 October 2011).

AppleMuseum (no date) ‘Macintosh PowerBook 100’, AppleMuseum [Online]. Available at: http://liten.be//rTxU7 (Accessed 23 October 2011).

http://liten.be//Gjt7T

http://liten.be//Gjt7T

http://liten.be//Vf1IA

http://liten.be//Vf1IA

http://liten.be//Lfj7T

http://liten.be//Lfj7T

http://liten.be//vaEbf

http://liten.be//vaEbf

http://liten.be//2E7vE

http://liten.be//2E7vE

http://liten.be//U79Tu

http://liten.be//U79Tu

http://liten.be//rTxU7

http://liten.be//rTxU7

ReferencesAtkins, M. E. (2010) ‘Today’s R&D Charter : New Markets, Differentiated Products’, InventionMachine [Online], Available at: http://liten.be//VEa63 (Accessed 23 October 2011).

Barney, J. (1991) ‘Firm resources and sustained competitive advantage’, Journal of Management, 17 (1), pp.99-120 ProQuest [Online]. Available at: http://proquest.umi.com/ (Accessed: 20 October 2011).

Barney, J.B. and Hesterly, W. (2005) Strategic management and competitive advantage: concepts, Pearson Education.

Carter, C., Clegg, S.R. and Kornberger, M. (2010) A very short, fairly interesting and reasonably cheap book about studying strategy. London: SAGE.

Dell (no date) Logostage [Online], Available at: http://liten.be//0CX2d (Accessed 23 October 2011).

Dierickx, I. and Cool, K. (1989) ‘Asset stock accumulation and sustainability of competitive advantage’, Management Science, 35, pp.1504-1511.

http://liten.be//VEa63

http://liten.be//VEa63

http://proquest.umi.com/


http://liten.be//0CX2d

http://liten.be//0CX2d

ReferencesFahy, J. (2000) ‘The resource-based view of the firm: some stumbling-blocks on the road to understanding sustainable competitive advantage’, Journal of European Industrial Training, 24 (2/3/4), pp.94-103

Fernandes, J. (2011) ‘Steve Jobs – Timeline of One of the Greatest Entrepreneur in the World’, theTechLabs [Online]. Available at: http://liten.be//hmlt4 (Accessed 23 October 2011).

Gohring, N. (2010) ‘IBM to help telcos become cloud suppliers’, ComputerWorldUK [Online], Available at: http://liten.be//RN7Xk (Accessed 23 October 2011).

Graham, H., Gordon, G. (2005) ‘The resource underpinnings of competitive positions’, Journal of Strategic Marketing 13 (2), pp.93-116.

HQWalls.com.ua (no date) HQ WALLPAPERS [Online]. Available at: http://liten.be//WFhOf (Accessed 23 October 2011).

JoBrad (2010) ‘Three Circular Interlocking Arrows’, OpenClipart [Online], Available at: http://liten.be//0w8xG (Accessed 23 October 2011).

Journal of Strategic Marketing, 13 (2), pp.93-116 ProQuest [Online]. Available at: http://proquest.umi.com/ (Accessed: 19 October 2011).

Ketels, C. H. M. (2005), ‘Michael Porter’s Competitiveness Framework-Recent Learnings and New Research Priorities’, J Ind Compet Trade 2006, 6, pp.115-136.

http://liten.be//hmlt4

http://liten.be//hmlt4

http://liten.be//RN7Xk

http://liten.be//RN7Xk

http://liten.be//WFhOf

http://liten.be//WFhOf

http://liten.be//0w8xG








ReferencesKochmanski, D. (2011) ‘Child of the Nineties, pt. 2’, DougKochmanski [Online], Available at: http://liten.be//mA224 (Accessed 23 October 2011).

Loeb, P. (2011) ‘My First Apple Product’, Paulloebmusic [Online]. Available at: http://liten.be//rZ0eL (Accessed 23 October 2011).

MobileFone (no date) ‘COMPAQ PRESSARIO ** 320GB Hard Drive, 2GB Ram, Windows 7 **’, bidorbuy [Online], Available at: http://liten.be//0JfPN (Accessed 27 October 2011).

Moore, C. (2008) ‘$19,800 Bentley Ego Laptop Remarkably Similar to 1990 Clamshell iBook’, Lowendmac [Online], Available at: http://liten.be//8ABXk (Accessed 23 October 2011).

Oldcomputers (no date) ‘Apple II’, OldComputers [Online]. Available at: http://liten.be//iN3w8 (Accessed 23 October 2011).

Porter, M. E. (1980). ‘Competitive Strategy: Techniques for Analyzing Industries and Competitors’, New York: Free Press.

Porter, M. E. (1987), ‘From competitive advantage to corporate strategy’, Harvard Business Review, 65 (3), pp.45-59.

http://liten.be//mA224

http://liten.be//mA224

http://liten.be//rZ0eL




http://liten.be//0JfPN

http://liten.be//0JfPN

http://liten.be//8ABXk

http://liten.be//8ABXk

http://liten.be//iN3w8

http://liten.be//iN3w8

ReferencesPorter, M. E. (1998), ‘The competitive advantage of nations’, New York: Free Press.

Porter, M. E. (2008). ‘The Five Competitive Forces That Shape Strategy’, Harvard Business Review, January [Online]. Available at: http://liten.be//52eVZ (Accessed 19.10.2011).

Price, E. (2011) ‘Lenovo’s 23-Inch Tablet: Useful or Useless? (UPDATED)’, TechnoBuffalo [Online], Available at: http://liten.be//u3nLp (Accessed 23 October 2011).

Priem, R. L. and Butler, J. E. (2001a) ‘Is the Resource-Based Theory a Useful Perspective for Strategic Management Research?’, Academy of Management Review, 26 (1), pp.22-40.

Priem, R. L., and Butler, J. E. (2001b) ‘Tautology in the Resource-Based View and Implications of Externally Determined Resource Value: Further Comments’, Academy of Management Review, 26 (1), pp.57-66.

Selasa (2011) ‘Hp Logo’, HP-logo-info [Online], Available at: http://liten.be//08dJs (Accessed 23 October 2011).

http://liten.be//52eVZ

http://liten.be//52eVZ

http://liten.be//u3nLp

http://liten.be//u3nLp

http://liten.be//08dJs

http://liten.be//08dJs

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