Week 1
What Strategy tools do for you:
Strategy tools - create value for the organization
Value Guide for Reading a Business Case:
1. Select the important information
2. Determine what information is missing and could be valuable to know
Four main questions for strategy:
1. Where we compete
2. What unique values do we have
3. How do we deliver value
4. Why we sustain the value
Intro to strategy topics:
Main question: How can strategy tools help you, even if you are not a strategy
professional?
- Having a deep understanding of multiple Strategy Tools allows you to make
informed decisions based on the strengths, and weaknesses, of each tool.
Success comes from using the right tools at the right time, as well as using
multiple strategy tools together to create the best possible outcome for your
organization.
Example: Hulu
- Founded by multiple companies when streaming became popular
- Strategy - subscriptions and advertisement companies
- However paid subscriptions still had to watch ads
- Advertises were core customers and the subscribers are the
product being sold to the ad companies
- Saying ‘no’ to an ad-free experience for subscribers would go
against their core strategy
- Business success - comes at the crossroads of market opportunity and an
organization's ability to capitalize on the opportunities
4 key Ways of using a strategy framework: The 4 Ds
- Describe the strategy tool you wish to use, that you believe is best for the business at
the given time.
- Diagnose the situation. Are things going well or heading towards failure? Why is this
happening? What, if anything, is wrong with the current strategy plan in place?
- Develop a new strategy based on the diagnosis. What problems does the new strategy
have to address that will enhance the organizational issue.
- Deploy the new strategy. Implement the new strategy and see what changes, if any,
take place. What changes can be made to enhance the strategy?
What is Business Strategy:
Main Questions:
1. What are the 4 key questions?
- Where do we compete, what is our market?
- What unique value do we bring to our market?
- What resources do we utilize to create that value for our customers?
- How do we sustain our ability to create value for our customers?
2. What are the key issues that the 4 questions seem to be uncovering?
- This tells us where we perform the best at, what market we ‘win’ the most at.
- This tells us what makes us different from others that also ‘win’ in that market
- This tells us what allows us to create a unique product compared to others in our
market
- This allows us to identify what/who allows us to make our product so unique.
What is strategy - thinking about the whole picture and coordinating the necessary pieces to
complete the whole picture -even sacrificing pieces.
Formulating a strategy: the 4 key questions:
1. Where do we compete? - our market
2. What unique value do we bring to the market? - why do customers choose us?
3. What resources do we utilize to bring that value?
4. How do we sustain our ability to create value?
What isn't strategy - A good strategy plan indicates a border on what we do not want to do.
* Your intended strategy is not the same as the actual strategy you implement
Intended strategy
Emergent strategy
Realized strategy
Economic Concepts for HR Strategy:
Accounting profits:
Profit = Total Revenue - Total Explicit Cost
Total Revenue = Price per unit (p) * quantity sold (q)
Total Explicit cost = Fixed cost (TFC) + Total Variable Costs (TVC)
TVC = Variable costs (VC) * Quantity Produced (Q)
Total Cost = Fixed Cost + Total Variable Cost
Example: Uber
Fixed Cost Platform design
App Design
Management salaries
HQ rent
Variable Cost Driver Pay
Breakeven Quantity:
-
The sales/production quality at which is you have 0 loses and 0 profit
- Selling 1 fewer unit leads to a loss
- Selling 1 more unit leads to a gain
- Total Revenue = Total Explicit Costs
Why does this matter?
- If demand is higher than BEQ - we can be profitable
- If demand is lower than BEQ - we will lose profits
BEQ formula: BEQ = FC/(P-VC)
P-VC = Contribution Margin - How much $ does each unit sale ‘contribute’ to paying down our
fixed cost/ generate profits
Economic Profits vs Accounting Profits:
Accounting profits - total revenue - total explicit costs
- Life blood of the business - allows you to pay for everything and survive
Opportunity cost - when you choose option A, you are also choosing to NOT do option
B
- What opportunities are we forgoing by choosing either option A or B?
Economic Profit = Accounting Profit - Opportunity Costs
Main Questions:
1. What are accounting Profits and how would calculate them for a company ?
-
-
Accounting profits is revenue that an organization needs to continue operating.
They are the revenue generated from the product you sell to customers minus
the cost of doing business, wages, salaries, advertising, making the product, ect.
Accounting Profits = Total Revenue - Total Explicit Cost
2. What is a breakeven quantity and why might it matter for our business decisions?
-
The BEQ is the point at which 0 profit has been made and 0 units have been lost.
Selling one additional unit would generate a profit, and missing the breakeven
point by even 1 unit would end in a net loss. The BEQ shows if a business
venture is worth pursuing, if the company can’t break even and generate a profit
it may not be worth pursuing the venture.
3. What are economic profits and how are they different from accounting profit?
-
Economic profits show you potential costs based on alternative options. By
foregoing an alternative option you leave the benefits, like money, that were
aligned with that option on the table. Accounting profit is the actual revenue you
made by, so by subtracting the actual amount you made minus the alternative
cost or, opportunity cost, you are left with the economic profit
Mission, Vision, and Values
Main Questions:
1. What is the difference between mission, vision and values?
2. Why are organizational aspirations important to understand in strategy?
Organizational Aspirations:
- Mission - the ‘why’ that drives the people in the org
- Vision - the ‘where’ we are going as an organization. What future do we want to
create
- Values - the ‘how’ we go about our work. What principles guide our actions,
behaviors, and choices.
Aspirations ≠ Strategy: Aspirations are broad aspects of the organization that guides its
decision making
Evaluating Aspirations:
Cautions:
-
Mission statement ≠ Mission
-
Vision Statement ≠ Vision
-
Values/Principle Statements ≠ Values
-
People HATE hypocrisy
Case Study #1 - Ebony Magazine:
Important Info:
- Local monopoly - only magazine talking about this stuff
Needs More Info:
- Johnson publishing sold in 2019
- External environment forced them to sell
- 1940s-1990s: Change in Black America, Civil Rights movement
- 2000s - Many African America accolades - President Obama
- Black americans were shown in mainstream magazines compared
to the 60s - racist america is changing in media
- Massive progress on the ‘vision’ - contributed to the ‘death of the
company’
Questions:
1. Where does Ebony Magazine Compete?
a. In the mass media market
2. What "unique value" does Ebony offer to its customers?
a. A perspective into African American culture, especially during turmoil times,
Ebony looked to show the positive aspects of African American culture as well as
the struggles facing them in society.
3. How does Ebony "deliver" that unique value to its customers?
a. Again in the form of a positive portrayal of African American culture. Compared to
their competitors, Ebony
4. What if anything makes it difficult for competitors to imitate or replicate Ebony's "unique
value"?
a. Ebony remained Blacked-owned during its entire lifespan unlike some of their
competitors. This may have offered readers a sense of integrity compared to
other Black-focsed magazines.
5. What is the Mission of Ebony Magazine?
a. To showcase societal and cultural inequality faced by the African American
community but to also highlight the excellence and beauty of black people.
Elevate Black America
6. What is the Vision of Ebony Magazine?
a. Equality in American society and even globally - a world that no longer needs
them to promote black excellence - Become the premier Magazine for Black
America
7. What are the Values of Ebony Magazine?
a. Black-owned, show people the good and beauty of African society - Stick to the
cause, sacrifice profits for mission, honor the Black America
8. How do you evaluate Ebony's organizational aspirations? Are they effective?
a. Yes I would say they were effective. They remained true in their approach to
business and always looked to evaluate African American culture.
9. How do Ebony’s mission, vision and values influence Johnson’s operational choices in
running Ebony Magazine?
a. He never sells out to white-owned parent companies like some of his
counterparts did. He remains true to his company values and showcases the
beauty of black culture by expanding the publication firm to other
aspects/demographics.
10. Why would advertisers pay Ebony less than they pay for other magazines
a. Since Ebony is targeted to a limited audience, African Americans, advertisers
would rather pay for space on magazines with a broader audience or shift to
digital advertising altogether. Also the stigma that African Americans were not
‘real consumers’ was a problem Johnson always faced. There were also
underlying racist ideologies at certain corporations, like with the Ebon fashion
show - where certain designers refused to showcase their clothes on Black
people in fear that it would draw away white consumers.
Class #1
CEO Disciple: concerned with surviving from a strategy point of view
- Integrates all pieces of business - decisions have ripple effects across departments
$20 Example:
- He went after it when everyone else was complacent.
- He noticed a pattern “who wants $20” and he saw no change and decided to take action.
- He took the necessary actions to reach the goal of $20
Week 2
Competitive Interaction:
Main questions:
1. Why is it important to understand what drives competitors?
Insight on the competition enables your organization to strategically maneuver
themselves to be able to accommodate for shifts within the market/ your strategic group.
2. Why is it important to understand what competitors are capable of doing?
It's important to understand what the competition is capable of because it gives you a
sense of the potential of your own company. If a successful move is made by a competitor
within your strategic group, it may give insight on an untapped market available to you and your
company. Or maybe your competitor hasn't made a move yet because they don't have the right
pieces to capitalize on an untapped market, however your company does and you are able to
seize a new opportunity.
-
A company’s central concern is finding the best way to respond to competitive
threats
- Some respond better to others
-
Knowing the competition requires you to know what's effective in winning understanding both the macro and micro levels of the markets
Macro Level:
Strategic groups - companies competing amongst themselves, but only indirectly amongst
other groups; companies apply different models to go after customers with different value
propositions. Ex: airlines - first class seats, special lounges, early boarding OR normal economy
class flights with no special offers
- These are called strategic group maps - identifies who competes with who
- Identify main drivers of variance.
Mobility barriers - orgs can't move into a different strategic group easily - price structure would
change - customer base would change
Competitor response profile:
- shows what drives the competitors
- Objectives
- Assumptions
- what they are capable of doing
- Strategy
- Resources and capabilities
External Analysis
Main questions:
1. What is the purpose of external analysis?
2. How do the tools of external analysis fit together?
Becoming the ‘Biggest fish in the pond’ 1. First examine the pond - do fishes work together or fight for resources?
2. Critical supplies - resources available for each fish
3. Future Trends - unexpected force they affect the pond
External environment tools - don't look at the company itself
1. Identify the external industry you want to examine - creates consistent analysis
a. Identify what companies operate in the environment - they do the same job we
do - other companies go outside the environment
2. Competitive Dynamics - How the companies within the environment interact with one
another - help drive profits or work against each others to attract customers
a. Industry Analysis i.
Entrants - don't competing within the environment but can move inside of
it to try and compete
1. Consumers, suppliers, or substitute products, complementary
products can also be entrants
PEST Analysis
- Political
- Regulations that make it easier for rival companies to operate in the market
- Economic
- Economic crash affects large number of consumers, causing companies to fight
for a small pool of consumers
- Social
- Consumers feel that a company is doing something morally wrong and decide
not to associate with that brand anymore
- Technological
- New tech made products more attractive
Operating Margins & Depreciation
Operating Margin - how much accounting profit a company makes for every dollar in
sales revenue it creates; how efficient are we at converting sales into profit - sometimes
called Return on Sales (ROS)
OM= (Operating Income / Revenue) X 100
Operating Income - amount of profits a org generates after deducting operating expenses wages, cost of good sold, amortization/depreciation
- Operating income is calculated before taxes - business are taxed on their operating
income
OI = Revenues - Labor Expenses, Depreciation/Amortization, COGS, other expenses we
claim
Depreciation/Amortization
- Spreading the cost of something out over its useful life
- Yearly depreciation/amortization captures the amount of an asset that is ‘used up’ during
that year
Operating margin as a strategist -
Bitter Competition Case
Important Info:
Need more info:
Questions 1. As of 1986, what is the NutraSweet division’s operating margin, both before and after the
amortization charge for the aspartame patents is deducted (i.e. with and without
accounting for the amortization charge)?
Without amortization:
OM = 142/711 = 0.2 = 20%
With amortization
OI = revenue - expenses
OI = 711 - 173 = 538
OM = 142+173/711 = 0.44 = 44.3%
2. Evaluate the size of these operating margins: Are they good, bad, or indifferent? If you
were a potential entrant to the aspartame market (like Holland Sweetener Company or
Angus Fine Chemicals), would NutraSweet’s operating margins encourage or
discourage your market entry?
These margins are both good, especially the margin without amortization. Nutrasweet
definitely dominates the market but there is room to maneuver within the market. Of course the
patent protection that Nutrasweet has on top of their recognition with coke and pepsi will make it
hard for any entrant to dominate their space - however setting the groundwork and being
prepared to make significant moves in the early 90s, when nutrasweet’s patents expire, will set
up any entrant for later success.
3. What is the single most important factor explaining the size of these operating margins?
The patent protection - this made it hard for other entrants to enter the market and allowed
Nutrasweet to charge a premium on the sweeteners.
4. Which one of the operating margin figures calculated in question #1 above – before or
after patent amortization – should be more relevant to a potential entrant (like HSC or
Angus) in choosing whether or not to enter the aspartame market, and why?
Without amortization shows entrants the true structure of Nutrasweet. They should analyze this
structure and prepare for when the patents expire to then enter the market
5. When thinking about whether or not to enter this industry, why should NutraSweet’s
average total cost per pound and average variable cost per pound matter to NutraSweet
and HSC?
They both matter in analyzing the cost structure to produce 1 pound of sweetener. Both
costs tell HSC if they can produce at a lower cost they will be more effective than
Nutrasweet. TVC also tells HSC the cost of production which can a play a role in pricing
their product
6. Based on information from the case study and any additional reasonable assumptions
you need to make, estimate the following figures for the NutraSweet division in 1986:
i.
Gross margin = revenue - cogs/ revenue
= (6879-4344)/6879 = 0.369 * 100 = 36.9 million
ii.
Average total cost per pound of aspartame produced
= $50
iii.
Average variable cost per pound of aspartame produced = TVC/quantity
produced
=$18
iv.
Explicitly state whatever additional assumptions you make in constructing
these estimates.
7. The case study says, “HSC claimed that its method of producing aspartame would be
less costly and more flexible than NutraSweet, although this was disputed” (page 5). Do
you believe this claim? Why or why not?
8. HSC plans to enter the European and Canadian aspartame markets in 1987. Taking
into account NutraSweet is likely response to HSC’s entry, what should HSC’s entry
strategy be? In particular:
a. Which customers should HSC target? Should HSC try to sell to Coke & Pepsi?
Why or why not?
If HSC can reduce production cost and reorganize a pricing structure to effectively compete with
Nutrasweet they should try to offer a better deal to coke and pepsi. Additionally they should look
for upcoming and emerging soft drink companies who might want to compete with coke and
pepsi especially if either of those companies decide to stick with nutrasweet.
b. Should HSC try to imitate NutraSweet’s “branded ingredient” strategy (i.e. should
HSC create a branded product)? Why or why not?
Yes they should. In order to effectively compete with Nutrasweet, HSC should make an
effort to create a branded product and work with emerging leaders in the soft drink industry,
similar to how Nutrasweet worked with coke and pepsi.
c. Where should HSC set its price relative to NutraSweet’s price, and why
This would highly depend on the production cost that HSC can produce at and if they can
leverage any new technology. They would also need to run ad campaigns next to Nutrasweets
aggressive $30 million/yr campaigns. Accounting for all this I don't think they can afford to offer
a lower price than Nutrasweet $70 per lbs - I would estimate that around $80-90 per lbs would
allow them to compete against Nutrasweet in other ways like ad campaigns like i mentioned
previously. Additionally they can attract consumers by offering unique value, like healthier
formulas compared to Nutrasweet.
9. Now put yourself in NutraSweet’s shoes. If HSC enters the European & Canadian
aspartame markets using the entry strategy in your answer to the previous question,
how should NutraSweet respond?
Nutrasweet should have the advantage for any entrant who may enter the environment given
that they have had years of dominance in the space. Given that the patent era is over and they
now need to hold onto their dominance in the market, Nutrasweet should look to continue
relationships with industry leaders like coke and pepsi. Of course taking into account legal
concerns and how they can no longer lock companies into multi-year contracts - they should
restructure their relationship agreements to comply with the law. They should also be quick to
partner with emerging soft drink contenders, this should be a priority and it should also be
intensing for emerging companies to partner with a well trusted industry leader..
Week 3
Industry Analysis
Industry - a set of companies that do a job for customers in the same/similar ways
A word of caution: students often want to apply industry analysis to a company (e.g. who are the
suppliers to Coke?) but the tools of industry analysis are designed to ask questions about a set
of competitors, or an industry (e.g. who are the suppliers to the carbonated soft drink industry?).
Try to keep your focus on the set of competitors, the set of suppliers, the set of buyers, etc.
rather than focusing on any particular company, buyer, supplier, etc.
Clearly Define your Industry:
Where we compete - What are our competitors doing? - ask these questions:
- Understanding buyers - What job are your customers hiring you to do?
- Understanding suppliers - Who/what you need to do the job
- Understanding Competitors - Who else does the same job
- Understanding Entrants - Does anyone else want to do the job?
- Understanding Substitutes - Who does similar jobs
Understanding Industry Analysis:
1. Rivalry - interactions between companies can enhance or destroy profitability
2. Entrants - new players in the industry can enhance or destroy profitability
3. Buyer Power- customers have more bargaining power and negotiate higher value for
lower prices
a. Few buyers than customers
b. Price sensitivity
4. Supplier power - Supplies have more bargaining power and negotiate higher prices from
companies
a. Few suppliers than competitors
b. Costly for companies to switch suppliers
5. Threats of substitute - other companies that do the same job in the same/similar ways
a. Customers are highly aware of the substitute products, the substitute has better
pricing/value, performance is better, and customer switching cost is low
6. Existence of Complements - other products and services increase the demand for the
job customers hire you to do. Ex: PB&J or hotdogs and bread
Cola Wars Case Study:
1. Map out a retail value chain for this industry. Start at the raw materials and work your
way forward to a finished product. Show the key steps or stages where one entity adds
value by converting inputs into outputs. So, for example, if you were drawing a retail
value chain for gasoline you would start with crude oil extraction then show the raw
processing stage, the shipping stage, the refining stage, etc. These are all stages of
production that may be performed by the same company, but could be performed by
multiple companies who each play a role and add some "value" in the process.
1. Raw materials like sugar, high fructose corn syrup are made in farms - in
some cases artificial sweeteners are made in the labs but the raw
materials would also come from farms
2. The raw material are then blended at concentrate producers - who blend
the formula and ship them out in bottles - except the sugar and high
fructose corn syrup
3. Bottlers then take these bottles and add in the sugar, which they would
get from farmers. They add carbonated water, and place the soda in the
designated bottle choice (can, plastic, glass)
4. Bottlers offered direct store service which allowed them to physically go
into retail stores and place the product on shelves to then be bought by
customers
5. In most cases metal cans are recycled to be used again for other
products
2. Use your value chain above to help you complete the "Instructions" tab in the Five
Forces Excel Tool. Note that a careful response to the above question will help you do
this well.
On excel sheet
3. Use the Five Forces Excel Tool to guide an industry analysis for the CONCENTRATE
industry and the bottling industry.
On excel sheet
4. What do the numbers from the worksheet mean? What insights do you gain about the
industry from your analysis? Are you feeling comfortable as a current competitor in this
space, or are you feeling worried? Why?
I would be a little worried as a new competitor in the space. The worksheet does offer
great insight but it also shows the very high barriers to enter and exit the industry. For
starters the insane amount of marketing and advertising needed to compete should be a
top priority. As well as the cost for a fully functional plant factor. The top competitors are
also known to diversify and buy out substitute products which should be alarming as a
new entrant.
5. The tool does not incorporate (yet) the potential sixth force: complements. These are
products or services that increase demand for your products or services. The increase
in electric vehicles, for example, may also increase the need for battery powertrain
maintenance services. Great apps for an Android device may increase demand for
Android devices. Are there any complements here that you need to consider?
Some compliments may be other grocery store items - burgers, hot dogs, bread - for
summertime celebrations these items are usually seen together. Some others might include
beer and other alcoholic beverages - think again to summer parties where there are coolers of
both soda and alcohol. Another big ones are chips that you might see at a kids birthday party for
example.
Week 4
PEST Analysis
https://www.investopedia.com/terms/p/pest-analysis.asp
Political - government policies or changes in legislation that affects the economy, the industry,
or the entire organization.
- Ex; taxes, employment laws; also can apply to international relations/laws
Economic - supply and demand, exchange rates, recessions, overall economic growth or
decline
Socio-cultural - demographics, age distributions, cultural attitudes, workplace and system
trends
Technological - trends and changes to technology, overall use of technology in the broader
industry, development of new technology - government spending on research to enhance
technology
*PEST can also be used to evaluate an organization's internal structure
- Ex: internal social climate
PEST Analysis can:
1. Spot new opportunities for the organization
2. Implement Appropriate Practices
3. Break free of old Assumptions
Key Steps to PEST:
1. Determine Relevant Factors
2. Evaluate how factors affect international operations
3. Develop Appropriate strategy
Cola Wars Case with PEST:
1. Imagine the future of the carbonated soft drink (CSD) external environment using
information from the Cola Wars case as well as your own insights and experience.
Categorize your imagined future into the PEST factors.
Political - The multi-year contracts that Coke and Pepsi were locked into may
have changed forcing them to look at other options within the CSD industry. Also
thinking about Holland sweetener company and Nutrasweet, where HSC had filed many
lawsuits which changed the aspartame industry within Europe. All these political factors
may have opened the door to less big name companies like Coke and Pepsi seeley
dominating the industry, and more competition amongst smaller organizations
Economical Social - As more information becomes readily available to everyday consumers
more information is brought up about the health risk associated with drinking CSDs. As
people become more conscious about what they put in their body, they also implement
healthier alternatives to supplement their needs. This could be an opportunity for the
CSD industry to shift towards healthier formulas.
Technological 2. Map the PEST factors to the Five (Six) Forces of your industry analysis and show how the
attractiveness of the CSD industry is likely to change in the coming years. Will it become more
attractive, less attractive? Why?
3. How does a thorough and careful PEST analysis change the future of a business that you are
personally interested in or invested in?
A PEST Analysis offers a more personalized view of the industry you are operating in. The
political factors show you legislation that will affect all components of the 5 factors, same for the
economic factors. The Social factors offer more insight on consumer trends which can enhance
your views on buyer power, rival companies, and even substitutes and complements. Finally the
technology factors can enhance your suppliers and even potentially give them more power over
your company.
Case Study:
1. Why do you think Dr. Bell was so critical of Intel?
As a social scientist, Dr.Bell was concerned with understanding people, which gave her insight
on how they use technology on a daily basis. She also gained an understanding for what they
wanted to see in technology and how it could enhance their day-to-day experience. Dr.Bell was
also good at conveying this information back to the staff at Intel, by posting interviews and
photographs of all the people she met across the world.
2. How does her work relate to our discussion of PEST Analysis?
Political
Economic
Social - Overall Dr. Bell was always focused on consumer trends and what people wanted to
see added to their favorite pieces of technology. Here are a few examples of Dr. Bell’s
awareness on future trends based off her knowledge of consumer behavior:
- Going to China and seeing consumers were more concerned with their children using
computers for HW rather than online web surfing. So they invented a key parents can
use to switch between HW time and open access to the computer
- Predicting that smartphones would dominate the industry
- Looking at cars as more than just transportation methods but more personalized and
interconnected with new technologies
Technological
- Key for PCs in China
- Smartphone chips; as well as other small robots and gadgets
- Integrating seamless streamlined access to personal devices in cars
- TaiChi laptop - screen on the ‘back’ of the laptop
Week 5
External Analysis Overview:
-
External Environments:
- Competitive Dynamic
- Industry Analysis
- 5 +1 Forces
- PEST Analysis
Internal Analysis:
-
Profitability is driven by external environment and internal resources
Internal Analysis - the analysis of a firm's resources and capabilities that allow it to
deliver unique values to its customers. Why should we care about internal analysis?
1. External Analysis is incomplete
a. Being in a good industry does always mean good profits and vice versa
2. Internal Factors can explain more variance in profits amongst companies
-
Resources - assets;tools
Capabilities - process the firm develops to coordinate human activity to achieve goals;
skill to use tool
Case Study:
1. Assess the strength of each of Porter’s five (six) forces in the metal container industry.
Based on your analysis, how would you evaluate the overall profit potential of this
industry?
Buyers - Buyers remained constant across the industry - CSDs, food packages, energy
and oil packaging. Buyers don't have that much power over the can companies
themselves except for a few who would request customizable can sizes/ shapes. For the
metal containers buyer power is not a threat.
Suppliers - The suppliers are also not a threat. The industry moved from steel to
aluminum which was a cheaper and readily available option. The industry again pivoted
towards plastic which was even cheaper, lightweight, and readily available. The metal
container industry's constant success with changing suppliers proves that supplier power
is not a major threat.
Rivalry - There were a lot of major players in the metal container industry with the top
competitors occupying 60% of the market, and with at least 100 companies competing in
the industry. Nevertheless, prices remained the same and buyers were constantly in
need of containers. Rivalries existed and the biggest threats were mergers and
acquisitions, but they had a low success rate. Overall rivalry did not pose a major threat
to incumbents.
Substitutes - Most companies were able to diversify themselves to make up a lot of
substitute products - Plastic containers, different cans made of different materials.
Overall there aren't a lot of substitutes that would threaten an incumbent
Entrants - As mentioned previously, the top competitors occupied around 60% of the
market share. The biggest entrant threats would most likely come from local geographic
plants. However the biggest competitors were occupied selling to large corporations like
Coke, Pepsi, energy and oil companies, ect. Overall entrants had high barriers of entry
like plant cost.
Complements - none really exist
Overall the metal container industry was fairly profitable. Prices remained relatively the
same, and buyers were always in constant need of supply. As we saw with Crown,
smaller staff focused on more quality products were a fine way to succeed in this
industry.
2. Using PEST logic, is the industry becoming more or less attractive over time? What
evidence do you have to support your position?
Politics - International business/politics may have affected companies ability to expand
into other countries. On the other hand, some countries welcome the expansion of industrial
manufacturing, like Africa.
Economic Social - Consumer concerns over the recyclability of products like plastic bottles. Buyer’s
consumers may want to move towards a more eco-friendly product.
Technology - Faster move innovative ways of producing the containers. This would vary
on the material but we saw evidence of new technology in the metal can sector.
3. What are the key success factors for Crown Cork and Seal? Why are they successful?
They focused on quality and were able to succeed in the fundamentals of containermaking. They reduced their size and focused on raising the quality of their products.
Their CEO at the time emphasized loyalty from his workforce as well as accountability.
Plant managers were incentivized to produce quality products even without their salaries
being tied to plant-sales. They also were industry-leaders in international expansion, with
many companies offering Crown land to build plants in their countries as a way to
expand industry.
4. As of 1989, what should Crown Cork & Seal do, and why? Peter Kiewit Sons has
expressed an interest in selling all or part of Continental. Should Crown Cork & Seal buy
it? Why or why not?
I don't think Crown should acquire/merge with Continental. First the upsides, Merging will
easily put the new entity as the industry-leader - destroying America National Can.
Merging/Acquiring would also give Crown new plants in Latin America, Asia, as well as the
Middle East. However as stated before, Crown was able to find success in the lower workforce
focused on quality work. Acquiring one of the top competitors would lead to a culture clash
between Continental's old work-style and Crown’s. I do think Crown should look into purchasing
some of Continetial’s international plants as a part of its growing international business.
5. Consider a company you know well. Why is it important for that company to complete
BOTH external AND internal analysis?
Week 6
Resource Based View of a Firm:
-
Resources are tools and Capabilities are the skills required to use that tool well
1. Resource heterogeneity - firms have different resources
2. Imperfect resource mobility- resources are hard to replicate from firm to firm
a. Ex: Exceptional Brand recognition/reputation
VRIO:
-
-
-
-
Valuable - is the resource valuable?
- Does it increase a customer's perceived value?
- Does it produce at a lower cost?
Rare - is the resource rare?
- Common resources lead to competitive parity
- Patents create rarity
Imitate - is the resource or capability costly to imitate
- It is costly if firms cannot imitate or copy the resource at a reasonable price
1. Path Dependence - unique decisions that have occurred over time
2. Causal Ambiguity - not understanding where a firm's advantage comes
from
3. Social Complexity - resources reside in the complex relationships within
an organization; in department, systems, and people
Organized - being well positions to capture value
Barriers to Imitation:
1. Recognition - Competitions must recognize you have something worth imitating
a. Barrier: Hide your superior performance
2. Incentives - Competitors must have incentives to imitate
a. Barrier: Deterrence - Threaten to punish imitators
b. Barrier: Preemption - Lock up all profitable uses
3. Diagnosis - Competitors must diagnosis what you have that leads to your superior
performance
a. Barrier: Causal Ambiguity - multiple resources in place to disguise the source of
your advantages
4. Resource Acquisition - Competitors must be able to require the same
resources/capabilities, or similar resources/capabilities, that lead to success
a. Barrier: Immobility - Capability embedded in the firm’s process & culture
5. Deployment - Competitors must be able to put those resources to use
a. Barrier: Complex combination of resources and activities that work best together
and contradict rivals’ prior commitments
Generic Strategy
Competitive Advantage - company achieves higher profits than other competitors in an industry
1. Scope of Strategy
a. Target a broad market
b. Target a narrow focused market
2. Source of competitive advantage
a. Low cost leader
b. Differentiation
1. Overall Cost Leadership - provide similar product, but at a lower cost
2. Overall Differentiation - doing something different so that consumers are willing to pay
more
3. Cost Focus - Target specific market and price-sensitive customers
4. Differentiation Focus - doing something different in a small narrow market
Case Study:
1. Why do customers buy from Wal-Mart over all other options they have available to
them?
- Location, especially in the beginning Walmart was positioned in smaller towns. The
alternative was to drive ours to the nearest big city. Another reason of course was the
discounted prices compared to competitors. Paired with location and discounts, smaller
towns benefited the most from Walmart and in the beginning were their primary
customer market.
2. What are the key factors that explain Wal-Mart’s success?
● Discounted prices
● Location
● Variety of Products
3. Exhibit 6 in the Wal-Mart case study indicates significant differences between Wal-Mart
and its competitors. In what areas does Wal-Mart appear to be superior, and why? In
what areas does Wal-Mart appear to be inferior, and why?
●
4. Could another competitor like K-Mart duplicate Wal-Mart’s success? If so, how? If not,
why not? Can Wal Mart’s competitive advantage be sustained? Why or why not? What
are the biggest potential threats to Wal Mart’s competitive advantage?
●
5. Revisit the Walmart Case. What trends do you see in Wal-Mart’s financial ratios during
the 5 years leading up to 1993? How might these trends help to explain the 22% decline
in its stock price during March and April of 1993?
●
6. Should Wal-Mart’s management be concerned about this sudden decline in its stock
price? What (if anything) should Wal-Mart do about it?
●
7. Strategy and Life:
● Choose a company you know well - what are its most compelling resources and
capabilities?
● What are your most important resources and capabilities (as an individual) that
allow you to create unique value for your most important stakeholders?
Week 7
Cost Advantages:
-
In order to win by offering lower prices, you must have lower cost
How to generate cost Advantages:
1. Economies of scale
a. Selling greater amount of products than competitors; allowing firm to lower lower
cost per unit
2. Learning and experience
a. ‘Practice makes perfect’ - finding better ways to compete a task - decreasing
cost
3. Proprietary knowledge
a. Having production knowledge or creating proprietary design to be a low-cost
producer
4. Lower input costs
a. Low-cost on raw material, labor, manufacturing, ect
b. Ex: Walmart buys in large volume which gives them higher power over suppliers
c. Sourcing inputs from the lowest-cost country
5. Different business model
a. Different set of activities
i.
Eliminate certain activities
ii.
Perform different activities
Scale and Experience Curves:
Scale = size of how many units you produce in a year
Experience = your cumulative volume over time - units sold in a all of your history as a company
Case Study - Honda:
1. What is the strategy that has allowed Honda to be so successful in the motorcycle
industry and, in particular, in the US
a. Their high level of production compared to US manufacturing and their attitude
towards capturing the most market share.
2. Does Honda seem to have a cost advantage? If so, what is/are the underlying source(s)
of the advantage?
a. Their high production rate and their distinction from other motorcycle brands.
Honda heavily advertised itself as a transportation vehicle compared to their
competitors who focused on being a sports vehicle. This idea of transportation for
everyday use opened their product up to a wider consumer base, so that when
they entered a foreign market they were easily able to capture an untapped
consumer population. They also forced on innovation and were ready to adapt if
there was a significant threat in the market.
3. What are the experience curves showing in this case? What do they mean? How do we
interpret them? What do they tell us about Honda relative to competitors?
a.
4. What is the unique value Honda offers to customers? Why is this actually “unique value”
for these customers?
a.
5. What indications do you have, if any, that the strategy was planned in advance? What
indications do you have, if any, that the company stumbled into its strategy?
a.
6. Do you see any companies around you that engage a cost advantage in their efforts to
compete? What are they and how do you know they have a cost advantage?
a.
Differentiation:
-
Customers hire companies to do a job for them
- Each job has a functional, social, and emotional dimension; understanding which
dimension you product services can help with differentiation
Customers care about:
1. The price of the product
2. How is the product different from others?
Categories of Differentiation:
1. Product Features
a. Product wins because it does a better job at meeting customer’s need
b. The product does more jobs for the customers. Ex: smartphones vs normal
phones
c. Product does a unique job that no one else does
2. Quality and Reliability
a. Product last longer than other products
3. Convenience
a. Easy to find and purchase
4. Brand image
*Product Differentiation is based on customer perception
Case Study - eHarmony:
1. How structurally attractive is the online personals market (external analysis)?
2. Why do people want to meet others online instead of finding them in the real world?
3. What is the unique value eHarmony offers to customers? Why does this fit (or not) with
the external environment in which eHarmony operates? How might you measure the
extent to which eHarmony is effectively delivering this unique value?
4. Does eHarmony have a competitive advantage? If so, where does it come from? If not,
why not?
5. How serious is the competitive threat to eHarmony?
6. Which of the four options should Waldorf pursue?
7. Consider a company you know well that engages a differentiation approach. What
unique value do they offer? Articulate as clearly as possible the unique value bundle
(what value elements?) they offer to customers and why it matters.
Week 8
Case Study: XEROX
1. What were XEROX PARC’s most important resources and capabilities at the time of the
case? Evaluate these R&Cs using the various barriers to imitation tools and frameworks
you have.
2. What were XEROX Copiers (the primary business) most important resources and
capabilities at the time of the case? Evaluate these R&Cs using the various barriers to
imitation tools and frameworks you have.
- Their patent which help create their competitive market share
- Deterrence if other companies imitated their design - sued IBM over
similar copier design
3. Why do you think Xerox failed to copy its success?
4. What companies do you know of that seem to have resources and capabilities that are
unusually difficult to imitate or replicate?
Week 9
Strategy Implementation
-
Aligning the current org with the new strategy and getting the work done
1.
2.
3.
4.
5.
Accountability
Clear Goals
Accurate Measures of Performance
Right Rewards
Follow Through
7-S Model
Strategy - unique value in the market; competitive advantage
Structure - how task get divided up between people; authority
Skills - Capture abilities of employees as well as the capabilities of the firm
Staff:
1. How do we hire?
2. How do we train, promote, and retain employees
3. How do we terminate people we don't need
System - controls and coordinates work
Style - informal interactions in the firm; culture
Shared Values - objectives and priorities that help managers decide when questions are worth
answering
Organizations are perfectly designed to deliver tomorrow exactly what they are delivering today
Week 10
Emergent Strategy:
Perform an external analysis of this company - company is from 2000-2010 - one business unit
(focus on this unit but be familiar with the other business units)
- Pest
- 5 forces
- Tell me how you define industry
- Key resources and capabilities
- Unique value
- Key execution practices
- Corporate strat
Does the market even know what they want?
Cures tell us logic but not history
Week 11
Corporate Strategy:
-
Efforts lead to insight which leads to better business decisions
- What insight do we hope to gain
Business Strategy - how we compete in a certain environment for certain customers
- CURES Framework and other tools
Corporate Strategy - Which environments do we compete in
- How many businesses are being operated and how do we operate them
1. Vertical Integration - own several steps in the value chain of making a product
a. Ex; raw materials, manufacturing processes, delivering
b. Each business has it own resources and capabilities, execution practices;
however they can share many of the same corporate factors
2. Diversification - business may be related but are not connected in the value chain
a. Business operates in different environments and offer their own unique values
b. May share some corporate similarities
Corporate Strategy asks two additional questions:
1. Ownership test: How can we leverage or exploit our current resources and capabilities
2. Better-off test: How does entering a new business environment help us learn and
enhance our current resources and capabilities
*synergy - are two or more things more valuable together
Types of Resources and Capabilities for Corporate Strategy
1. Front-End Visibility - part of the business customers actually see
a. Location, brand development
2. Back-end Visibility - out of the customer’s view
a. Patents, Intellectual Property, plants
Value Chain:
- Sequence of activities that transform raw materials into a finished product
- Vertically Integrated - company participates in the whole value chain process
- Vertically specialities - company p[articpates in some, but not all, aspects of the
value chain
- Upstream activities - processes early on in the value chain
- Downstream activities- processes later in the value chain- closer to the end
consumer
- Forward Integration - when a company moves forward in the value chain - closer to the
end consumer
- Backward integration - when a company moves backward in the value chain - further
away from the consumer
*Do we make or do we buy? - can the firm do a better job of offering unique value by conducting
the activities themselves rather than another company
3 C’s of Vertical Integration
1. Capabilities
a. The firm has the capabilities to do a better job than another company in the
current value chain - can we be the best in the world?
2. Coordination
a. The firm can better coordinate current activities to the other activities you want to
integrate into the firm
3. Control
a. The firm can gain valuable control in the value chain by conducting the activity
themselves
2 Dangers of Vertical Integrations: 2 F’s
1. Flexibility - to make changes to the business
2. Focus - the more activities a firm conducts, the harder it is to be world-class in those
activities
Week 13
Tesla’s 10-K is a comprehensive document detailing the company’s financial performance,
operations, risks, and strategic direction. Key sections include:
●
Item 1: Business – Describes Tesla’s operations across automotive, energy, and
services segments.
●
Item 1A: Risk Factors – Outlines potential risks affecting Tesla’s business.
●
Item 7: Management’s Discussion and Analysis (MD&A) – Provides insights into
financial results and strategic initiatives.Fintel - Financial IntelligenceStock Insights
AI+2SEC+2SecInfo+2
Item 1: Business – Tesla’s Operations
Tesla operates through three main segments:
1. Automotive:
○
Manufactures electric vehicles (EVs) including Model S, 3, X, Y, and the Cyber
Truck.
○
Develops autonomous driving technologies like Autopilot and Full Self-Driving
(FSD).
○
Operates Gigafactories in the U.S., China, and Germany.
2. Energy Generation and Storage:
○
Produces energy products such as Megapack, Powerwall, and Solar Roof.
○
Constructing a new Mega Factory in Shanghai to meet increasing demand.Fintel
- Financial Intelligence+1Moomoo+1Stock Insights AI+5SEC+5Fintel - Financial
Intelligence+5
3. Services and Other:
○
Provides vehicle servicing, Supercharger network access, and software
upgrades.
○
Offers insurance and vehicle financing options.Stock Insights AI+6SEC+6Fintel Financial Intelligence+6
Item 1A: Risk Factors – Key Risks Identified:
●
Supply Chain Dependence: Reliance on single-source suppliers could disrupt
production if issues arise. Fintel - Financial Intelligence+5SEC+5SEC+5
●
Macroeconomic Factors: Inflation, interest rate fluctuations, and economic downturns
can affect vehicle affordability and demand. SEC+1MarketScreener+1
●
Regulatory Changes: Alterations in government incentives or tariffs may impact sales
and cost structures.SEC
●
Competition: Increasing competition in the EV market from established and new
entrants poses challenges. SEC
●
Leadership Dependence: Tesla's success is closely tied to the leadership of Elon
Musk. SEC
Strategy Maps for Tesla’s Major Business Segments
1. Automotive
●
Customer Value Proposition: High-performance EVs with advanced technology.
●
Key Activities: Vehicle design, manufacturing, and software development.
●
Resources: Gigafactories, proprietary battery technology, and AI capabilities.
●
Revenue Streams: Vehicle sales, software subscriptions (e.g., FSD), and regulatory
credits.
●
Cost Structure: Manufacturing, R&D, and supply chain management.
MarketScreener+1SEC+1
2. Energy Generation and Storage
●
Customer Value Proposition: Sustainable energy solutions for homes and businesses.
●
Key Activities: Production of energy storage systems and solar products.
●
Resources: Megafactories, solar technology, and installation services.
●
Revenue Streams: Sales of energy products and installation services.
●
Cost Structure: Manufacturing, installation, and R&D expenses.
3. Services and Other
●
Customer Value Proposition: Comprehensive support and services for Tesla products.
●
Key Activities: Vehicle servicing, insurance, and software updates.
●
Resources: Service centers, Supercharger network, and customer support teams.
●
Revenue Streams: Service fees, insurance premiums, and software sales.
●
Cost Structure: Operational costs of service centers and infrastructure maintenance.
Final Exam Notes
Apple Case Study Notes:
2000-2010:
External Analysis
- Clear definition of industry - the personal computer industry in the early 2000s, saw
rapid innovation and expansion, global accessibility, and falling prices. Major
competitors in the industry offered fast-processing devices, easy to use operating
systems, and affordable devices for everyday consumers, businesses, education
facilities, and government entities.
The industry also began to favor integration and seamless transitions between devices.
Interconnected digital experiences saw the development of various hardware and
software capabilities, syncing data across desktop, laptops, and other devices like
mobile phones. This easy-to-access data allowed major companies to create their own
branded ‘ecosystems’ - or various devices part of that company's product line that all
shared the consumer’s data, making it convenient for consumers to buy additional
products, and even harder for them to ‘break-away’ from the ecosystem since the data
couldn't be transferred elsewhere.
-
State of Competition - Wintel’s (Window OS and Intel) chips dominated the market,
other manufacturers built around the Wintel model. Growth was captured by competitors
who could lower prices and expand capabilities.
The Internet increased PC demand and new emerging markets were the main targets of
growth in the early 2000s.
-
PEST
- P: Regulations over digital products. Major competitors entered into patent wars
over manufacturing stolen products.
- E: Dot com boom in the early 2000s impacted technology spending. the 2008
financial crisis would have impacted technology spending. White-box channel
alternatives made up 30% of the overall PC market in 2009. Innovations and
optimization drove prices down.
- S: Growing accessibility of computer usage and therefore technology was
becoming a part of everyday life. Access to one's own personal data and data
security were growing in concern. Attachments to certain companies and
manufacturers based on the capabilities of their products.
- T: Portable computers would eventually lead to smartphone technology, which
would then branch off it to a variety of smart-devices. Wi-fi and internet
connectivity changed how users interacted with their devices and each other.
The creation of cloud services capable of storing personal data. Hardware
innovations lead to faster, smaller, and more capable devices. Finally, software
design enhanced hardware products and gave certain competitive advantages
-
5 forces - Overall: Unattractive
- Rivalry: High: Rivalry in the industry was firstly defined by rapid growth and
innovation. Demand for faster, smaller computers would eventually lead to
devices like portable mp3 players, smartphones, and other products that were
able to differentiate themselves from competitors. Companies also faced fastpaced release cycles of products - which pressured companies to produce new
products almost every year. Consumers were also extremely loyal to certain
brands - some focused on looks and aesthetics while others focused on specs
and performance - either side was associated with high switching costs for
buyers. Companies even faced competition on software platforms - radio and
music playing platforms, app selling and distribution for developers, and
competition in terms of operating systems in each product.
- Threat of New Entrants: Moderate: High investments into R&D, manufacturing,
and distribution makes it hard for new entrants to differentiate themselves in the
market. Strong brand loyalty again causes high switching costs for buyers.
Established competitors benefit from economies of scale and relationship with
suppliers. Known OSs from Windows and Apple were user friendly and easy -touse. Any new entrant would either have to adopt these systems or create a
whole new experience for users - which would be hard to adopt.
- Buyer Power: High - Overall buyer’s have various choices and price points to
choose from. Buyer’s could select a variety of products that suited their own
business or personal needs. As tech literacy grew, buyers could compare various
products, or even hand select certain products and assemble their own device.
High prices, slow or faulty hardware, and limited software capabilities would drive
buyers away while the opposite would attract them.
- 5 categories of buyers:
- Home buyers cared about design, mobility, wireless connectivity
- Business consumers balanced price with service and support
- Education depended on software availability
- Government cared about security
- White-box PCs (custom builds) - represented 30% of the market in 2009
- Supplier Power: Moderate: Major suppliers who made hardware like keyboards,
chips, drives, memory , and disk relied on highly competitive prices. Suppliers
like microprocessors and operating systems came from 2 dominant forces Intel
and Microsoft.
- Substitutes: Moderate: Consumer electronics include, phones, TVs, game
consoles, started to implement functionality similar to desktop computers - like
internet access, software applications, entertainment, and productivity. The
smartphone was the biggest threat to the personal computer industry but key
players were able to integrate and expand their capabilities into smartphone
devices.
-
Complements: Many: software like word processors, presentations, desktop
publishing, internet browsing, and productivity software like email. Hardware like
printers and scanners and multimedia devices.
Internal Analysis
- Mission, Vision, Value
- Mission - Vision - Value -
Unique Value Proposition - Apple’s digital hub was a unique and valuable concept in
the PC Industry. Steve Job proposed the idea back in 2001, with the Mac at the center of
the user’s digital life. This allowed the user access to seamless data integration across
other apple devices, like the iPod, and created a convenient unified ecosystem for user’s
to access their data. The iPhone replaced the Mac as the center of the ecosystem after
its initial success, the iPhone then became a getaway into other Apple products
thereafter. Whatever Apple product the consumer first adopted, any additional Apple’s
products allowed for users to easily sync and manage their previous data on their new
device through the use of Apple’s icloud.
-
VRIO:
- Valuable? - Yes, the digital hub added value to the user experience, it increased
customer loyalty, and it increased switching cost.
- Rare? - Yes, Apple was the first to add this unique value to their business model.
Their variety of products also incentivized consumers to utilize this digital hub
integration across devices.
- Imitations? No - other companies did not have the catalog of products to offer as
many integration opportunities.
- Organized to capture value? - Yes Steve Jobs and Apple were positioned to
capture value. They updated their Mac hardware, software, OS, and most
importantly opened Apple Store’s for consumers to see their suite of products.
Barriers to imitation
- Recognition You must add data and use Apple’s ecosystem to understand if their
value is worth imitating
- Incentives - Barrer: Deterrence - Apple and Steve Jobs were known to be
extremely aggressive when it came to intellectual property, especially against
Android manufactures and Samsung.
- Diagnosis - Barrier: Causal Ambiguity - Apple had numerous factors in play that
created it unique value - its design, its software and the many layers involved
with each (for example: icloud), its hardware capabilities, ect
- Resource Acquisition - Barrier: Immobility - Apple was known for its secrecy even
amongst their own workforce - some employee’s didn't even know about the
iphone until its launch in 2007
- Deployment - Barrier: Complex Interdependencies - Many companies needed to
restructure or update their current business models and product lines to try and
-
match Apple’s - even if they did Apple had already built a consumer base and
locked those consumer’s into their ecosystem.
-
Resources and Capabilities
- MacOS (Applies to future Apple products)- User-friendly and easy-to-use
- Based off UNIX - favored by professionals
- Apple Software - Icloud data storage
- iTunes music and radio capabilities - partnership with music labels
- App Store - easier to use for independent developers
- Digital Hub Ecosystem:
- Locked into the ecosystem - high switching cost
- Easy to access data source
- Creates backup in case of lost or damaged hardware
- Easy to integrate into newly purchased apple products
- Product Design
- Appealing aesthetics of both hardware and software
-
How do we sustain value?
- Apple sustains its value by continuously upgrading existing products and
introducing innovative new ones. A core strategy is the regular refresh of
hardware—most notably the iPhone, which sees a new model every 12 to 18
months. This cycle maintains consumer interest, drives repeat purchases, and
keeps Apple at the top of the competitive market. In addition to upgrades, Apple
sustains value through innovation - creating entirely new categories of products
that consumers may not have even realized they needed
Generic Strategy
- Competitive Advantage - Apple achieves high profit margins that competitors and
remains an industry leader
- Broad Market - Apple targets wide consumer bases around the world - from
personal and home consumers, to businesses and professionals, educational
institutions, and government agencies.
- Source of Competitive Advantage = Differentiation - Apple is not a low-cost
leader, rather they compete through their unique design choices, their integrated
user experience, and brand loyalty.
Cost Advantages
- Economies of scale - Apple produces and sells millions of iphones, ipads, and
computers per year reducing per unit cost
- Learning and experience - Proprietary knowledge - Lower input costs - producing in countries like China where labor costs are
cheaper
-
-
-
Different business model - eliminates the middleman by having their own Apple
store so consumers can buy directly from them. Also their own software like
iCloud or the app store is a direct way for consumers to buy from them online.
Strategy Implementation
- 7-S Model- Strategy
- Structure
- Skills
- Staff
- System
- Style
- Shared values
Corporate Strategy
- Vertical Integration - Apple owns its own OS (iOS and Mac OS), and signature software
pre-installed on those OSs. They own their retail stores putting them directly in front of
their consumers.
- 2-Fs
- Flexibility - Being locked into the Apple OS and ecosystem limits flexibility
in terms of adopting new and emerging technologies. Vertical integration
also made it hard for Apple to pivot or exit underperforming products.
- Focus - 3 Cs
- Capabilities- premium and distinctive hardware like the ipod, iphone,
ipad, and macs. Easy-to-use and aesthetically pleasing OSs which allows
Apple to optimize their user experience. Finally Apple stores which deliver
a unique customer experience far better than competitors.
- Coordination- Apple controls both their hardware and operating systems,
giving them complete control over how they coordinate their user
experiences. Software like iTunes and the App Store coordinate content
delivery directly to the consumer’s devices
- Control- end-to-end control allows Apple to create a consistent, highquality expireces for all devices and for all users. The Apple ecosystem or
digital hub allows apple to control certain application quality and take in
revenue from those applications
- Diversification - Apple has diversified into many different services - itunes and Beats
Studio, icloud data storage, wearable technology targeted towards fitness, and Apple TV
geared to compete with cable and streaming services
- Synergies - integration of all apple devices, their software, and data creates synergies
across all apple devices. Ex: icloud data saved on an iphone can be pulled up and
exclaimed more thoroughly on a Mac
- Front and Back end visibility
- Front - retail stores
-
Back - production and supply chain