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Apple Inc.: Performance in a Zero-Sum World Economy
are devoted to their company. While maintaining a low market share of the computer industry, Apple has continued to produce a quality product. This quality has been seen throughout all of its many products and is not viewed as a lesser product compared to the competition. In addition to the quality, Apple has always been able to make more of a profit off of its computers than other distributors. Because of the reliance of companies like Dell and HP on Microsoft's Windows operating system, almost half of their revenues are cut by paying back Microsoft for using their product. This quickly turns Apple's small market share into an
extremely profitable market share. Apple’s low market share is turning far more
profit per percentile than their competition because while Apple is making money, the other companies are usually only reaching their break-even point or slightly above.In addition to the competition that is seemingly strangling Apple's computer market share they must also battle against an economic downturn that has affected the whole industry. While all companies have seen a slow in sales and a loss of profits, Apple' has seen a greater loss in its computer revenues. Because of the nature of Apple's products, they are seen more as high-end items and more expensive luxuries rather than as necessities. Because of this many people are buying cheaper, lower quality computers from customized manufacturers in order to save money. Normally, this would lean Apple towards developing a lower priced computer that could compete with these personal computer models However, this strategy has been tested before with the Mac Mini. What Apple found was that the sales of the Mac Mini were cannibalizing on the sales on other, more expensive models. This previous failure should be viewed as a warning and disclaimer against any further pushes into the low-cost market. One Apple product that will never be viewed as a failure is the iPod. Contrary to Apple's computers, the iPod has a giant lead over the competition when market share is concerned. Because of its success, it has introduced an entire generation to the Apple brand. By using the iPod as a gateway, Apple will continue to push its trendy image to new customers in order to gain more and more computer customers. Apple will look at further expanding on their small but efficient market share. However, with the current Microsoft user base, it is going to be increasingly difficult. The company will focus on its core competencies in order to stay successful. Apple's customers are incredibly dedicated. Many people that buy Mac
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Apple Inc.: Performance in a Zero-Sum World Economy
computers continue to buy more Mac computers as well as other Apple branded products, hardware, and software. Even though this is deemed as a niche market, Apple would be foolish to try to take the world of Microsoft and PC distributors head on. The difference in market shares is far too large.
By focusing on their current customers and slowly expanding this base, Apple will try to better position itself for a future attempt to capture back the market share that it maintained many years ago.
During the time that Jobs was absent from Apple, the company had a long period of ups and downs. New products were released to both success and failures. It was during this time, however, that their status as a niche market retailer began to form. Apple customers were extraordinarily loyal. Many people were buying IBM and other personal computers because they had a need for the devices. On the other hand, many people were buying Apple brand computers because they wanted an Apple machine. Due to this increasing amount of dedication to the company, Apple was able to charge a higher price for their high-end, high-quality computers. This allowed them to stabilize financially as well as discover a new identity as a company. After this new identity was established and Steve Jobs was reestablished as CEO of the company,
Jobs was able to take this identity and expand on it. By targeting their now niche market, he was able to follow a product differentiation strategy to turn the company around. With the release of the iPod and iPhone, he was able to tap into markets and succeed in areas that were previously never explored or considered. Even though the deficit in computer industry market share remained
relatively unchanged, Jobs’ foresight allowed Apple to reach new levels of
profitability and success. Whether the Apple enthusiasts like it or not, Steve Jobs will not be around forever. While he has done great things for the company, he has left Apple in a precarious situation. What will Apple do when he leaves? Apple's last response to not having Steve Jobs as their CEO was eventually to rehire him as CEO. In order to survive once he is no longer leading the company, Apple needs to begin depending less on Steve Jobs and balancing responsibilities throughout the company and among select individuals. In order
to prepare for Jobs’ future absence from the company,
Apple will look ahead and find a future replacement for Jobs. In order to sustain peace in the Apple world, such a replacement will preferably be chosen by Jobs himself. That
way, the replacement will be able to learn and continue Jobs’ success
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Apple Inc.: Performance in a Zero-Sum World Economy
as the company when Jobs’ role was reduced to that of a chief advisor or to that of
no role at all. Continuing the Jobs
to prepare for Jobs’ future absence from the
company, Apple will look ahead and find a future replacement for Jobs. In order to sustain peace in the Apple world, such a replacement will preferably be chosen by
Jobs himself. That way, the replacement will be able to learn and continue Jobs’
success as the company when Jo
bs’ role was reduced to that of a chief advisor or to
that of no role at all. Continuing the Jobs
VII. Evaluation and Control
In the long term A&F should continuously look for more opportunities to invest in overseas for expanding into the European and Asian markets. And for the short term, A&F could emphasize on online shopping, sponsoring college events, re-evaluating the needs and preferences of its target market, improve its customer service and review the choice of magazine were A&F places ads. With such a dynamic management team and the desire to the specialty apparel by storm, they configure out a way to remain exclusive without being insulting and hurtful.