The success of Apple with the application of Porter's strategy theory Essay

The success of Apple with the application of Porter's strategy theory - Essay Example In 1996, Jobs arrived on Apple's campus for the first time in nearly 11 years, becoming interim and then permanent CEO† (Kanter, 2010). Many commentators therefore separate Apple’s history under Jobs as â€Å"Jobs I† and â€Å"Jobs II,† with the latter being his re-introduction to the company. Apple, during its early years, was quick to establish a core competence. As one group of authors states, â€Å"A company’s core competence can relate to any of several aspects of its business: expertise in building networks and systems that enable e-commerce; speeding new or next generation products to market; good after-sale service; skills in manufacturing a high-quality product; (and) innovativeness in developing popular product features;† these authors also stress the importance of â€Å"speed and agility in responding to new market trends and changing competitive conditions; know-how in creating and operating a system for filling customer orders ac curately and swiftly; and expertise in integrating multiple technologies to create families of new products.†(Thompson and Strickland, 1997). ... â€Å"We are living through extraordinary times for the music business. One of the great success stories of the 20th century is turning unpleasantly sour in the 21st† (Cook, 2003). From this perspective, it is fairly impressive that Apple has been able to capitalize in a market where it is essentially competing with a free product by putting its own 99 cent downloads up against it, successfully. â€Å"Apple has sold more than 500 million songs in 19 countries since it introduced iTunes in the United States over two years ago. While iTunes by itself is not viewed as a big money maker for Apple, it has helped drive sales of its wildly popular iPod portable music player† (Apple, 2005). From this perspective, the service is selling the hardware. Another major issue facing Apple is that if consumers do not see what they want aligned with their needs in a retailer, they are likely going to go someplace else to hire the product they are seeking. â€Å"The record companies hav e never had it so bad. The world is still saturated with popular music, but somehow its very omnipotence has taken the shine off its profitability: as popular as pop stars are, many of us have had enough of them† (Cook, 2003). Porter’s framework applied Porter’s Five Force analysis has achieved wide credibility as a form of industry analysis. Also, some of Porter’s key concepts can be applied to Apple. â€Å"The intensity of industry competition and an industry’s profit potential are a function of five forces of competition: the threats posed by new entrants, the power of suppliers, the power of buyers, product substitutes, and the intensity of rivalry among competitors† (Schmalnese, 1985). Porter’s Five Forces model of industry analysis is, stemming rationally from the