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Apple case study [email protected] 28/10/2014 Top trademarks 2014 Why? Company Differentiation and diversification ! High integration of all these areas History Price $3495 w/128K RAM Price $3815 with monitor $1298 with 4K RAM; $2638 with 48K RAM Steven Wozniak, Steven Jobs and Ronald Wayne April 1, 1976, Apple Apple I Apple II Apple III Computer Price $666.66 Cupertino, California. Revenue reaches $1million 1976 1977 1980 History Price: $2495 Apple goes public, share price jumps from $22 to $29 Jobs presents “1984”, on the first day Pre-launch event of trading Macintosh https://www.youtube.com / watch?v=g2V8vikCHIU https://www.youtube.com/ watch?v=RcRQWGFJ5YY Ridley-Scott directed commercial aired during the Super Bow 1980 1983 1984 History Wazniak and Jobs resign the Apple acquires Next company Computer for $427 million Jobs becomes PowerBook Apple CEO Low market share and lower profitability 1985 1986 1991 1996 1997 Jobs founds Jobs buys Pixar NeXT and Next becomes Pixar Animation Studios History iPod First generation The Unix-based OS X next-generation iMac operating system Apple returns to profitability ipod 2G Windows iBook and compatible PowerMac 1998 1999 2001 2002 History iTunes Music Store iPod 3G, Flat Pannel iMac, iBook G4 iPod nano iPod suffle Safari (web browser) iLife package PowerBook Alluminium G4 (iDVD, iMovie, iPhoto) PowerMac G5 iPod mini 2003 2004 2005 History From IBM PowerPC Apple TV processors to Intel iPhone processors. MacBook Pro MacBook Pro and iMac Pro Super Drive 2005 2006 2007 History MacBook Air iPhone 4S iCloud App Store iPad iPad2 2008 2010 2011 History iPad Air iPhone 6 iPhone 5 2012 2013 2014 Company Net Sales by Product of 2013 (%) 3% 9% 3% 13% 53% 19% iPhone iPad Mac iPod iTunes, so:ware and services Accessories Company What are the key success factors of Apple? Apple logo • a bitten apple to identify the values The logo should transmit the of an innovative company that was personality of the company born and still lives outside the box. • the concepts of knowledge and desire, hope and anarchy Innovation in Products Apple leverages a combination of Top-Down and Bottom-up innovation strategy to create new innovation Management and organization Customer driven, driven, spontaneous and deep highly structured and process understanding of customer need oriented Innovation in Products New technology earlier than competitors To redefine existing product categories, focusing on: • Design • Consumer experience • Seamless integration of hardware and software Kaizen - costant improvement The Apple New Product Development Programme reflects a process of constant improvement, always in one infinite loop. Integration of all products Innovation in Products iPod Innovation in Music Player products In 2001 Apple introduce its firs iPod, a hard drive based music player with a retail price of $399. Why was it a successful product? It has impeccable design and easy to use menu. It was capable of storing approximately 1000 song (21 times more capacity than the competitors) and play music for 10 hours. In 2002, Apple released iPod 2 with larger memory that was compatible with Windows Innovation in Products iPod Innovation in Music Player products Over a short period of time, Apple has redefined many “Experience Environments” which are smoothly linked together 2. iTunes “music 3. iTunes management “music and browsing” download” experience experience 1. iPod “music access and 4. iMix listening” sharing experience playlists experienc e 7. Apple video 5. Apple in- experience store 6. iPod photo experience management experience Source: Venkat Ramaswamy, Francis Gouillart Innovation in Products iPod Innovation in Music Player products The strong combination of device, software and online store quickly disrupted the music industry and gave Apple a dominant market position. Key success factors: • Seamless music experience for the users • Distinctively design • Integration of device, iTunes software and iTunes music store • Strong according with all the major record companies to create the world’s largest online music library Innovation in Products iPod Business Model Canvas Customer Customers Key Partners Key activity Value Proposition relationship Key resource Channel Innovation in Products Cannibalisation Apple is never afraid to cannibalise it’s own as a results of the product development programme. The iPhone hit sales of the iPod and the iPad is hitting the sale of the Mac. Halo effects A cognitive bias that involves one trait influencing other in judgement of another product or company • The success of iPod has stimulated sales of Apple Macs and Mac book pro. • In turn the success of the iPods and the iTouch facilitated the introduction of the iPhone. • The user experience of the iPod, the iTouch and the iPhone created a user base for the iPad. Secretative company Secrete in term of product launches helps, on one hand to create expectation and to stimulate customer imagination, and on the other hand to protect themselves from competitors Only Steve Jobs is authorized to talk about Apple products and to presents the new products Deep collaboration “We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot” All experts are in-house, are in one place (Cupertino campus)- the improves the sharing of ideas and the production mechanical, electrical, software and industrial engineers, product designers- of new innovative products • Meet together for three To work in a small team hours once a week (organization as a start up) • Agility and focus Top 100 employees meet 3 days annually and discuss key strategic issue in a secret location Good food, no golf! Deep collaboration “It’s better to be a pirate than join the navy!” Intense work Apple culture focus on Creativity Combine with a rebel spirit Perfectionism Apple’s employees are talented people with passion for excellence, proud to be part of the Apple Company. Smart and Creative people that work in a Company in which best ideas have to win. Different kind of people of different kind of place à Inclusion inspire innovation https://www.apple.com/diversity/ THINK OUT THE BOX, ENCOURAGE THE EXPERIMENT, SHARE THE IDEAS Investment in Promotion Most Famous Ad Campaigns ¡ 1997: “Think Different” ad campaign was created https://www.youtube.com/watch?v=nmwXdGm89Tk ¡ 2002: “Apple Switch” ads https://www.youtube.com/watch?v=l2-UuIEOcss ¡ 2006: “Get a Mac” more famously known as PC vs. Mac https://www.youtube.com/watch?v=KNnX6XRQBec Strategic alliances and Strategic acquisition e.g.: Strategic alliances to exploit economies • Record Labels (EMI, Sony, Etc) for iTunes of scales, learn from • Youtube, Google (for mapping) for iPhone competitors, manage • Intel for the processor used in Apple products risk and share costs • Microsoft to develop Microsoft Office for MAC Strategic e.g.: • acquisition Emagic, Germany specialist in music software to improve its in-house • PA Semi, microprocessor company (high competences sophisticated and low priced chips) Apple Distribution Channels Apple sells to consumer, small and mid-sized business, education, enterprise, government and creative customers Wholesalers and retailers (e.g. Wal-Mart, Best Buy, Fnac, Mediaworld) Apple store: own retail division. As of October 2014, Apple has 444 retail stores in 16 countries https:// www.youtube.com/ watch?v=7L2fsubA2-c Online Apple Store available in 39 countries (October 2014) Apple Distribution Channels App Store (from 2008) : the only authorized service for laoding programms into the iPhone and iPad (Seamless integration between hardware) The App Store allows users to browse, buy and download application directly. Application developers must channel sales of application through the App Store, with Apple connecting a 30% royalty on each application sold. Apple Distribution Channels What's next for Apple? Oct. 5, 2011 -- Steve Jobs dies at age 56 the actual CEO is Tim Cook. “Always focused on the future. We don’t sit and think about how great things were yesterday. We are always looking to where we would like to be next” Tim Cook “Stay hungry, stay foolish” Steve Jobs Highlights ¡ Apple customers are intensely loyal ¡ Apple’s products work better and are simpler to use because Apple has deep understanding of consumer behavior ¡ Apple gives a life-feels-good experience to its consumers ¡ Work environment that encourage creative freedom ¡ Constant innovation in products ¡ Integration of all products .
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