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CASE SUMMARY
An overview of the background and the current status
Although Microsoft came into the picture as a collaborator of Apple, it turned out to be a strong competitor to beat when it introduced the windows. Up until the early 10's Apple's operating system was superior to Microsoft's Windows. The scene changed when the later introduced Windows '5.
The ten years of absolute success for Apple did not have the expected outcome. In the computer industry, what seems to matter is the hardware base. Despite the fact that Macs were successful in the educational and home sector, they did not manage to enter the business sector when the PC market was evolving rapidly. The PCs won over the Macintosh due to the compatibility with other computers. Moreover, due to the high production cost of the Macs costumers were more willing to acquire a Microsoft computer. Microsoft alone now controls the 50% of the worldwide computer market.
College papers on microsoft vs ibm
In order for Apple to regain control and succeed, managers must separate themselves from the usual strategies of competing with IBM or better, leave the competitive market to Dell, Compaq, etc and focus on the company's opportunities.
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They must give all their effort in trying to support and develop the already existing market of education and home entertainment. The matter of compatibility must also be examined so as for the operating system to be more "close" to the Windows based computers.
Apple has both strengths and weaknesses as well as opportunities and threats. By correct strategic plans and decision-making, managers will be able to place their product in a better position in the market and consequently in customers minds.
APPLE'S SWOT ANALYSIS
STRENGTHS
-Worldwide brand recognition.
-Innovation ability in both design and marketing.
-Ease of use of its products.
-Strong inventory management.
WEAKNESSES
-Poor technical support.
-Incompatibility with existing PCs.
-Weak manufacturing ability to keep up with demand.
-Price ( expensive due to production cost).
-Users do not feel comfortable with these computers because of their incompatibility.
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OPPORTUNITIES
-Exploit iMac's success.
-Collaboration with retailers.
-Network computers.
-Support of existing users.
-Increase compatibility.
-Justify price.
-Change design ( ex. iMacs ) .
THREATS
-Internet peripherals.
-Microsoft's influence in the software industry.
-Network computers.
-Competitors are trying to copy Apple's new designs.
IDENTIFICATION OF MAJOR STRATEGIC ISSUES
The major key issue for Apple is whether the company should or should not continue the battle against Microsoft and other PC competitors once it has already been defeated. Moreover, the possibility of trying to become alike to the competitive products or rather further differentiate its products must also be discussed.
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ALTERNATIVE SOLUTIONS
For the case of Apple there are no alternative solutions. The company must either
a)continue the battle against Microsoft and thus tend to become more and more compatible with the competitive products or
b)Become a completely different product by further differentiating itself from the Windows programs.
EVALUATION OF ALTERNATIVES
In the case Apple decides to go along and become compatible with Microsoft's Windows managers must consider the drawbacks of this decision. In the first place, Apple will not be any longer the unique company costumers knew and trusted. Users might feel tricked and they will no longer be satisfied from the computer they have since they will no longer know its capabilities and its functioning. Moreover, it is possible for the production cost to remain at the same levels as today. However, Apple will be forced to reduce prices since the company will be selling a computer with no differences from the rest. Last but not least, investor's confidence will be shaked since they were investing their money in something different and not in a usual computer market. The company will be derived from its brand name and the recognition it gained from that and so help the PC become even more dominant into the market. Managers will have to convince consumers that the newly released products are as good as the previous ones not to mention better.
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On the other hand, Apple will create products according to the needs of their costumers. Products easy to use, fashionable and modern and thus Apple, will become the bigger competitive force against Microsoft , Dell , Compaq etc. Producers have the bases for a new product due to the prior technological advancements and therefore the company will not be obliged to spend great amounts of money on research and production.
If Apple manages to become compatible with Microsoft, it will have surpassed its biggest obstacle and the road to success will be lying in front of them.
Yet, if managers decide to make a further distinction of the company from Microsoft's Windows, Apple will remain in the margin and as time passes - and more needs are created where the already existing ones are changing - users, will realize the need for something more advanced and with greater capabilities. Apple, will be considered a once great company that has now lost complete contact with the subject of PCs.
The advantages will be restricted in the production of fashionable products (ex the iMacs) and advanced devices whose price will not exceed the existing ones but at least maintain it. Still, experts, claim that in case Apple produced such products, there demand would be so high that the price could possibly rise. However, Apple must protect intellectual property so as to give the firm credit and some leverage in the market for the particular products. It should be mentioned, that, Apple and Microsoft are constantly in and out the courtrooms over the intellectual property rights of the Macintosh. If Apple had taken this into consideration, perhaps, it would still be the dominant power and Microsoft would not have been able to catch up.
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John Miller in one of his articles mentions that "a company needs the ability to quickly respond to industry trends and market demographics in order to be successful". It is obvious, that Apple failed to respond to the market trends on time and lost plenty of opportunities to place itself in a better position in the market.
DECISIONS AND RECOMMENDATIONS
As the time for decision and recommendations has approached it ought to be highlighted that no specific course of action can be characterized right or wrong. In many cases it is a matter of taking risks and many the risk taker be right.
To begin with, Apple should not become completely compatible with the Windows but should up to a certain extent create programs that will be easy to use with the Windows. On the one hand, Apple must not loose its brand name and the trust of the consumers by utterly changing its image and products. Users chose this type of operating system because of its uniqueness and they are acquainted with its functioning. If altered they will suddenly be faced with a different processor that they will not know how to operate.
On the other hand, Apple is not obliged to change completely. What must be done is a creation of microchip that will allow users to exchange files easily and work with a Windows PC. Nevertheless, when Apple attempted to do so, Microsoft came out with a new idea and did not make their computers interoperable with the Macs forcing users to buy a device and follow a time consuming process in order to read their files. In fact, what Microsoft did was to enhance its domination in the market. From the above-mentioned facts, it can be made clear that there is no "best thing to do" when referring to compatibility.
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Secondly, Apple should focus on the advanced designs of its products. Apple by continuously improving it products, managed to keep its users in the field of home entertainment, education and multimedia markets. The company recently came out with a new product called the Rhapsody has managed to increase sales and gain consumers preference.
Thirdly, Apple should consider licensing or partnering. Up until today, Apple tried to avoid licensing and the results were not good. When Apple was given the chance to have Microsoft as a partner, managers wanted to ensure the quality of their own system and dropped the opportunity. When Apple realized the need for help, it was too late. Their company was already in trouble and the licensing strategies they began were not proved successful. Currently, Apple is collaborating with IBM and Motorola and little by little the Business is standing on its feet again. Apple must cooperate with Wintel for the production of the best computers. From the marketing point of view it is a great challenge and it seems to be working.
Furthermore, Apple should pay more attention on its existing costumers. Apple has begun losing a respectful percentage of its users. Although it has succeeded in getting students all over the world familiar with its operating system it doesn't seem able to keep them after their career as students. They seem to be far more interested in obtaining a Microsoft computer. Apple must allow marketers to do their job in attracting students and persuading them to keep using a Macintosh computer. Because keeping a customer is easier than creating a new one, this strategic will prove useful for Apple as it will save the corporation from spending money in trying to attract customers.
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As a continuation from the above, Apple should by all means advertise its brand name and gain recognition. Advertising is important to the success of a good product, especially where competition is very high. It is a way to present consumers the benefits of acquiring a certain product, helps with brand name and product name recognition and builds an image. Even though Apple has a good brand name and has gained recognition from that, it still receives plenty of bad reputation due to the media and the press who keep stressing the company's struggle for survival. At this point, Apple needs advertising in order to present a better image of itself in the public and regain the faith of the customers.
As a final point, Apple should take good care of the prices. Apple should take into consideration the issue of pricing especially now that is planning on entering the market with new products. Because of the high prices of the Macs, subsidized pricing must be applied. This will make product prices comparable to those of the PCs and the company will see higher sales.
CONCLUSION
The PC market is constantly developing and Apple is introducing the market with new products. Apple made us realize how competitive the market is and that a company with no real and strong strategic methods will very easy be troubled. Many wrong business decisions made by Apple hade actually caused potential customers to seek different kinds of PCs and network programs.
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