According to the conventional wisdom, described in the article, the Apple is operating like closed mini economy, and thus the company might be doomed as it attempts to do everything at once. Apple produced hardware, operating system for it and programs; traditional approach would allow Apple to license some of its products to other companies that specialize in the development of the products and then access the products produced by the companies mentioned.
However in my opinion, the company would really increase the efficiency and competitiveness of its products if it followed more traditional approach as in this case, new innovations and consequently new products might appear much quicker, then the current policy adopted by the company. Huge diversification in one company might erode specialization, which is the cornerstone of innovations; it certainly does mean that differentiation and strategy adopted by Apple might not be successful in some circumstances, as the example of ipod clearly indicates, yet in my opinion it was rather the exception from the rule rather than the result of it.
In order to access the effectiveness of the strategy implemented by the company, one should understand the princ...
In spite of the fact that this product is just several years old, none of the competitors of Apple so far has been able to provide its customers with identical products of digital music industry. So the price of the Ipod certainly reflects some unique added features related to this product.
Another element of competitive advantage strategy is the differentiation focus, when the company attempts to differentiate within the segment of the targeted audience. In this case the company should provide the customers with the product that matches the needs of the customers in the situation when current products of the competitors may not meet the needs of the targeted customers. All this features are present in this case as ipod has many unique features not available in the products of the competitors.
Let us evaluate the this product within five forces model designed by Michael Porter that comprises the threat of new competitors, the threat of entry in the market, the threat of substitutes, the threat of bargaining power of suppliers and buyers.3
The threat of competitors. Not strong. Sony has started providing the customers with its new product- mini version of Walkman at the end of 2004. According to the research conducted by Moseberg, journalist from the Wall Street Journal, new mini player of Sony was thinner and wider, thus design was more convenient in use, as well as the battery life of the product was much longer. 4 However, when the Sony products appeared in the market the ipod was still unbeatable in the speed with which MP3 songs could be transferred to the player; whereas it took 2 hours and 13 minutes to transfer the 416 to the player of Sony, it took less than five minutes to