How & Why, Apple Overtook Microsoft

Description: When Microsoft stock was at a record high in 1999, and its market capitalization was nearly $620 billion, the notion that Apple Computer would ever be bigger — let alone twice as big — was laughable.

Source: NYTimes.com

Date: Jan 29, 2015

apple-vs-microsoft-2

Mr. Gates “couldn’t imagine a situation in which Apple would ever be bigger and more profitable than Microsoft.”
“He knows he can’t win,” Mr. Gates said then of the Apple co-founder Steve Jobs.
But less than two decades later, Apple has won. How this happened contains some important lessons — including for Apple itself, if it wants to avoid Microsoft’s fate. Apple, after all, is now as dependent on the success of one product line — the iPhone accounted for 69 percent of its revenue — as Microsoft once was with Windows. The most successful companies need a vision, and both Apple and Microsoft have one. But Apple’s was more radical and, as it turns out, more farsighted. Microsoft foresaw a computer on every person’s desk, a radical idea when IBM mainframes took up entire rooms. But Apple went a big step further: Its vision was a computer in every pocket. That computer also just happened to be a phone, the most ubiquitous consumer device in the world. Apple ended up disrupting two huge markets. Read the rest of the Story

Questions for discussion:
1. How did Apple overtake Microsoft in becoming more valuable?
2. How would you describe Apples strategy using one of Porter’s generic competitive strategies?

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27 thoughts on “How & Why, Apple Overtook Microsoft

  1. Tamara First Charger

    Apple had a vision that focused on mobility, beauty design, and functionality. The iPhone satisfied this vision. Microsoft made a business success of Windows, but Windows failed to meet the vision of mobility.
    Apple has one product and it is the iPhone. Microsoft depended on one product too. The iPhone was a new entrant, but there is always the threat of another new entrant. This phenomena is explained by Michael Porter in the Five Forces model framework. Apple became its own rival and dominated Microsoft.

    Reply
  2. Jennifer B

    Apple was able to succeed because they took Microsoft’s dream of having a computer in every home and changed it into their dream of having a computer in every pocket. Which was once unbelievable. Apple’s success is do largely because of the iphone. Steve Jobs was willing to gamble the profits from the iPod when he made music also available on the iPhone. Which started Apple on their path, always upgrading, coming up with the newest technology. Even something as small as a change in color made customers crave the newest device Apple had come up with. And now Apple has record high sales in phones and continue to be a trendsetter in technology. According to Porters model Apple falls on the differentiation focus strategy, which allows them to dominate that field. Apple has developed an exceeding large loyal customer base, created an excellent reputation for themselves providing top of the line devices.The Apple logo on computers and the designs on their phones have almost become a symbol of status. Apple focused on building computers that were not only uniquely designed for excellent performance and created a beautiful style both when seen and used.

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  3. Dakota Manson

    1. How did Apple overtake Microsoft in becoming more valuable?

    Apple overtook Microsoft by investing in a whole new product that virtually everyone could own. It changed the game in personal computing. Typically, Microsoft’ dominate market has been the Personal Computer (PC). In a household, you would have one PC that the whole family would use. Apple, however, created a product that that multiple people in the household could own, thus, expanding the market and creating new target markets. Many young children and teens have cell phones along with their parents and grandparents. Apples product, the IPhone, was created so anyone could use and for multiple purposes. For example, yesterday I was at a baby shower and we were playing a game where we would accumulate points for having a whirlwind of different products in our purse. Of those products, the IPhone in my purse replace a mirror, calendar, calculator, camera, address book, phone book, musical device Etc. This speaks to how universal it is and why it’s so valuable. I have all these products in the grasp of my hand.

    2. How would you describe Apples strategy using one of Porter’s generic competitive strategies?

    Apple uses multiple forces in Porters Five force model. If I can only select one, I’d have to say Apples’ competitive advantage lies in its ability to maintain its supplier bargaining power. It develops its product all through the production process and its worth Billions. Apple has created an illusion in consumers’ minds that an IPhone is not replaceable by any other product line their competitors offer. If you want an IPhone, you have to go to the IPhone store, which helps Apple keep its margins high.

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  4. Taylor Lapierre-Campbell

    The movement from Microsoft’s dream of having a computer in every home to Apple’s dream of having a computer in every pocket was once unbelievable. What made Apple able to succeed was the willingness for their products to “cannibalize” themselves. Steve Jobs was willing to gamble the profits from the iPod when he made music also available on the iPhone. Yet once Apple upgraded from iPod to iPhone buyers began to crave the constant upgrades no matter the size. Even something as small as a change in color made customers flock to the stores to get the latest model. Now Apple has record high sales in phones because their customers are always wanting the newest available technology and continues to be a trendsetter in technology.

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  5. Kendra Bloomberg

    Using one of Porter’s generic competitive strategies, Apple’s source of competitive advantage is differentiation focus. As Apple grew, everything about their company was created in hopes to make products that were different than anything else other companies had to offer, including Microsoft. They have created phones, computers, watches, and music players that you cannot find or purchase anywhere else other than Apple. For example, “If you want an Android device, you can go anywhere. But if you want an iPhone, you have to go to Apple.” Aside from the fact that they sell products only available through their company, they also offer many distinct features in many of their products which increase their differentiation. For example, all Apple products have the option to be linked to one another. ICloud allows customers to sync their information with any Apple device easily and efficiently. If you own a Mac and an IPhone, you can even receive and send your text messages using your laptop. Unique features like these are appealing to customers because they are very convenient which drives them to choose Apple products over other companies. This massive advantage of differentiation Apple has over other companies is why they have become so successful. As a result of their successful differentiation, Apple is able to drive their prices up with the confidence that a significant amount of customers will still purchase their products. They have gained “pricing power”, as stated in the article. Overall, Apple has driven their company to become “a trendsetter not a follow” allowed their competitive advantage of differentiation focus to propel their company to the top.

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  6. Nathan Watmough

    Apple is so successful because they are early adopters of technology and aren’t scared to take a leap of faith in order to get ahead of the curve. Microsoft plays it save while Apple was willing to jeopardize their highly successful ipod for their even more successful and profitable iphone. Microsoft on the other hand plays it safe with the markets and technology that they are familiar with. We need to keep in mind that microsoft is still a very successful company and and they are very good at what they do. Apple, on the other hand risks it all in order to become greater. It will be interesting to see what happens in the next few years to apple. The next big thing will be here soon and it will be interesting to watch how these companies react and maybe if another company will emerge to be dominant.

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  7. Tolu Adepoju

    I think that Apple took over Microsoft because it believed in not just in creating computers but a hand held computer that people could use easily and was really fast and provide security. Steve jobs saw how vast and how more mobile the world is becoming. Also apple create a device that was simple to use but also had a good appearance to it. Apple focuses on identifying and meeting customers’ needs. Also apple products sell lifestyle they are generally more expensive than other products but people will still head out to the markets and purchase an apple product. I work for the telecommunications company Bell and one of the tops phones we sell are our iphone 6 and iphone 5 and I always ask people why apple just to get a response and most people say it is easier for them to connect with their families facetime, family sharing through iTunes makes it easier to sure information with their families. Another response I get is also security and how it helps the consumer connect to work from home easier. It is not the other devices are not as compactible or are not as good as apple products or even better. Apple’s simplicity and influence in the market has also help to earn their revenues also.

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  8. Ben Lo

    “It’s been more of a follower whereas Apple has been more of a trendsetter, trying to reinvent an industry,” This is the reason why Apple has overtaken the computer giant Microsoft due to this very reason. Apple has been providing trendy, easy to use, futuristic interfaces for their products which has attracted many new young generations to blindly follow and purchase their product. Microsoft has been slower and providing less attractive options for their customers. For example Microsoft’s attempt to attain market share in the smartphone industry has not been very successful so far. Their cellphones are less user friendly, less modern interfaces that can attract users, and also they are late into the game. Apple and Samsung/Android smartphones are dominating the smartphone market and there is little room for new players to enter the game especially those who do not provide adequate alternatives to replace these strong players. Apple has also produced a brand that followers blindly follow. This brand name is one of the biggest way Apple attracts their consumers. Those who follow this brand are in a way brainwashed by Apple’s marketing techniques. They provide subpar quality of smartphones and laptops compared to their competitors like Microsoft, Acer, MSI, Asus, and Lenovo. Apple can successfully charge a large percentage more for the same components and same statistical laptops from other companies, this is due to their branding power. Due to Apple’s success of establishing a household brand name consumers can trust regardless of the quality they provide.

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  9. Ben Robinson

    Apple overtook Microsoft because of the iPhone. They had a better vision of what the future would look like and they created a product that people want. Personal computers are less vital than the cell phone that you carry everywhere and use all the time. The smart phone can do everything that a computer can and it has become more convienient. Apple also specialize in a few products and excels in all aspects. The look and feel of an apple product are a focus, they have to create an aura around a product so that they can have far superior profit margins. Apple aren’t a company that produce many products but they focus all there energy to produce a few products well. They also have done a good job of trying to differentiate their products as a simple. They market in a way that their products appeal to everyone.

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  10. Wancong Lu

    Nowadays, Apple has become more successful than Microsoft. No one can see that coming in the last 20 years, when apple was teetering on bankruptcy. One of the significant reason that why apple overtook Microsoft is the high quality of their product. With the development of world’s economies, people get more salary to get higher quality of life, they started to think about get better product, and they started to willing to pay that amount of money. At the same time, Apple brought the high technology products with expansive price in the world.
    Also, easy to use is another reason that why Apple overtook Microsoft. I remember when I searched computer in the Best buy, the seller told me the difference between apple and Microsoft. apple’s system is like a automatic car, super easy to use; and the Microsoft system is like a manual car, people can use that easily only when they know how to drive. I believe that most people do not know how to use computer very well, what we do know is just basic things, such us play a music, search on the internet, and write a paper, etc.
    Third, apple already became a part of fashion. a bunch of people in the world follow apple’s every step, they started to buy every new products, and do not care how expensive apple are, especially young people, most of my friends using the newest iPhone.
    However, Microsoft have not change a lot since it was produced. people will get bored about their products.

    Reply
  11. Gordon Entz

    Apple has become the biggest company in the world and it hasn’t been because they have come up with revolutionary inventions but simply because they improved on technologies that were already out. Apple was not the first to invent an MP3 player but when they came out with theirs it was just a better quality product and was simple to use. They also were not the first to come out with a touch cell phone but when they do come out with new products they have always been a great improvement and they are simple to use. The products they have come out with have looked better then the competition and have also performed great which has enhanced Apple’s reputation. Apple has focused its efforts on four main products; iPod, iPhone, iPad and Macintosh computers. Microsoft was overtaken because they didn’t come up with anything new or make any major improvements to their products. They simply made minor improvements to what they already had while Apple constantly unveiled new products or major upgrades that revolutionized an existing technology. Another one of the main reasons why Apple has done so well is because all its products look great which is sometimes what people base their decision to buy a product on.

    Reply
  12. Spencer Boles

    Microsoft’s biggest mistake was that they did not take Apple as a serious threat. At the time Microsoft basically had a monopoly on the industry and apple was almost bankrupt. If they had taken apple as a serious threat and watched them they may have been able to rival apple in emerging markets such as mobile phone but instead they let apple slip past them and gain a huge part of a multibillion dollar market.
    Apple has a differentiation strategy. There is nothing like apple products on the market. Generally on apple products run IOS not like Microsoft where their operating system comes installed on many different brands of computers. Their design is also very different from PC’s and they advocate ease of use for their products. One thing that helps apple with their differentiation strategy is that they have set trends instead of following them. The latest trend is the iwatch. This watch is supposed to be like no watch before. If it catches on it is another area that apple could dominate. Although they were not first to the market again it is a unique product that is different from traditional smart watched both in design and functionality.
    One thing that is clear is that apple is starting to make similar mistakes that Microsoft did and may have a similar fate as they rely heavily on the revenue generated by iphone. They could let an emerging market slip through their fingers if they are not careful about their competitors.

    Reply
  13. Shea Josuttes

    This article really stressed the importance of vision to a company which was really interesting to me. The fact that Microsoft is now sort of stuck in their Windows niche of portable computers (which was once their most successful product) was their undoing. In comparison it is possible that Apple is also getting stuck in their iPhone niche and that might possibly be their undoing. Clearly technological vision has to be well into the future as oppose to the “next best thing” because by the time you think of the next greatest invention it’s too late.
    Now Microsoft is too late to the game to really compete with Apple in the phone market, however they can create the next new shift in technology if they focus on being two steps ahead of Apple.
    Overall Apple was really smart at branding their products by keeping them user-friendly in a time where people are confused about technology and reluctant to keep up with the latest gadgets. They differentiated themselves by becoming the “cool” line on the market. Incorporating touch screens and their own sophisticated software for file sharing made them seem like the only choice for new cell phone users.(I’d personally never go to Samsung solely because iTunes is so convenient.) Of course Apple’s prices are high because they don’t use a cost focus strategy and because if their prices were lower the image of their high-end brand would suffer.

    Reply
  14. Beili Bai

    As the development of technology, more and more different brands of techonology appeared. The reason of Apple became more valuable and popular than Microsoft because of its reputation and innovation. The reputation is its brand. When people buy some technology, the brand dominates more than other factors. . The other reason is its innovation. As the development of Iphone, Apple made their phone becomes more light and easy to carry, opeart rapidly and surely, With the release of the iPhone, Apple launched a mobile revoluation.
    Each innovation of iPhone attacked more and more customers. Such as the Apple’s introduction of Face Time in iPhone4. I think the touch-screen phone is type of an extension and innovation of sliding phone, and Apple did it. The reason that Apple can overtake Microsoft. When other company such as Microsoft thought phone is just use for send message or make a phone call, Apple already has a bigger step vision that phone can get more functions than this. Their innovation made the phone likes a computer and it can carry in the pocket.

    Reply
  15. Fangbo He

    It is impossible to talk about the success of Apple without talking abut the instrumental role that Steve Jobs played in bringing about this success. Apple is a famous American comany as we all know, Apple overtook Microsoft in becoming more valuable for a variety of reasons. When Microsoft foresaw that computers are useful in everyone’s life Apple have already has a step vision, which they believe that the computers would appear in everyone’s life more portable, it is Iphone that we use today. Apple has been increasing its speed by using different techniques which let its overtook Microsoft which has been using only one technique. That is the main reason whay Apple overtook Microsoft. Finally, there are more people use Apple then use Microsoft in modern society because people think that Apple is what they like to use.

    Reply
  16. Kayla Rothe

    After reading the article it is clear how Apple was able to overtake Microsoft to become more valuable. While Microsoft’s vision was to have their product on every person’s desk; meanwhile, Apples was more innovative and farsighted as their vision was to provide customers with a computer in their pocket. While Microsoft was focusing on what customers wanted now, Apple was focusing on what customers would be looking for in the future. Another reason why Apple was able to place themselves above Microsoft is because they focused on the design of the hardware. Steve Jobs “believed that beauty matters”. He not only focused on making the software easy to use, but also concentrated on making them look nice and desirable.
    Using Porter’s competitive strategies, I believe that Apple applied a differentiation strategy. As expressed in the article, for the customer to purchase an Apple product they have to go directly to Apple. On the other hand Microsoft products are found at any electronic department store. Another way that Apple is able to differentiate themselves from other companies such as Microsoft is by staying ahead of their competition. As the article states, Microsoft has been “more of a follower whereas Apple has been more of a trendsetter”. By staying ahead, Apple is able to provide their customers with the newest and greatest products available.

    Reply
  17. Arth Patel

    Apple’s strategy to success is mainly based on the differentiation strategy. Apple has been successful in selling (marketing) their products to people, convincing them that their product is more valuable and in fact it is more valuable. Apple puts in tremendous amount of care and is very attentive to detail when they are designing their new products. The new apple watch that came out the month was very methodically thought out to the users’ needs and how would they interact with it. Also apple has a way of designing their products so they look more stylish; they are more seamless. The only thing that gets the attention of the consumers is the price of the products; it’s very expensive. Because Apple’s products are different from all of the Microsoft’s products, consumers are willing to buy them for a greater cost.

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  18. Rui. Zhang

    As our society is developing faster, it is much easier for people to accept new things. Therefore, we can see people using apple everywhere, computers, ipads, ipods, and of course, iphones. Seems like Apple is more popular than microsoft these days. However, like James said it is always a yes and no question. Apple company is being very naughty, for example, if you buy a computer from Apple, then next, you need to buy more other things from Apple company because your computer will use those things, and you can only buy from their company. the problem is these things are not cheap, and it is not really convenient to find an Apple store in some small cities. however, microsoft also has some problems with their company. like I mentionws earlier, people love new things. compare to Apple company, Microsoft is kind of old and they did not renew their things as fast as Apple. All in all, both Apple and Microsoft need to change a certain part in their companies in order to let more people like them.

    Reply
  19. Raman Sidhu

    I believe that because Apple had a “farsighted” vision of how they wanted to see their products being used compared to Microsoft’s radical vision, made them more successful and valuable. Where Microsoft imagined seeing “a computer on every persons desk”, Apple took a larger jump to imagining and presenting a hand held computer device in every person’s pocket. Apple realized that people like to see change and that is what they did when they went ahead and released their unique products. It is common to see the society go after something that is new and attractive in the world of the technology industry. Their differentiation strategy is definitely one that has helped them move ahead in the technology industry as it has targeted all age groups. Apple’s products are made available to all age groups and the simple functions have allowed everyone to use their various products. Consumers have also helped with building revenue for the company based on the popularity of their products. The products uniqueness and promising features is what attracts many customers. Apples functions are made suitable for all professions from business, educational, to personal usage, etc. With the recent increase in demand and usage of Apple products, the resale value compared to Microsoft products seems to be much higher. As Microsoft was once as high in demand as Apple now is, I believe that eventually Apple will also run into another new company within the market with greater competition and I am sure that will not be any time soon as they are keeping everyone satisfied with their flashy Apple Phone products at the moment.

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  20. Ajuot Ajuot

    Definitely no doubt, like race, when people are running and one person keeps increasing his or her speed while other are still using their initial speed, the winner at the end will be the one that had been increasing the speed. Apple therefore has been increasing its speed by using different techniques which let its overtook Microsoft which has been using only one technique. For instance, as mentioned in article, Microsoft has been obsessed with “protecting the Window”, leaving no room for other techniques that could have kept or even elevated its position in the market. In that case of being stuck in one position, Apple got a chance to explore many different ways that would make possible to reach where it is currently today. These include: “creating products that is more appealing to customers, making a unique design and sometimes cannibalizing its own products”. For instance, it “cannibalizes ipod” by introducing all the same features in it into iphone which makes the demand for ipod less while demand for iphone high. For the case of Porter’s strategies, I would say that Apple is differentiation strategist as its products such as Ipods, iphones, watches and TVs are very different from those of its competitors.

    Reply
  21. Kim Sikhosana

    Apple became more valuable than Microsoft because of its innovation. They had a vision that everyone should have a computer that is a phone in their pockets. Whereas Microsoft wanted every household to have a computer. This innovation idea by Apple led to double the revenue of Microsoft with the majority of the revenue coming from sales of the Iphone. Steve Jobs believed that the world was going mobile and he was right. He also had an eye on beautiful design, which made Apple unique and very desirable. They also increased their sales by other products such as the Ipods and Macs. However, now they are focusing more on the Iphone as it its main product line. People worry that this move might turnout bad for Apple because if sales in its Iphones drop and they do not have any other product lines it might cause the giant empire to come crushing down.
    On Porters generic competitive strategy, Apple falls under the differentiation group because they are innovate and are always the first group to come up with new ideas and designs. It is a broad group because they are companies like Samsung and Microsoft who are also in the smartphone industry and competing for customers.

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  22. Xiaolin Zhou

    By being a bold, more farsighted and radical company,apple made millions and millions dollars out of iphone– a computer in everyone’s pocket, which can’t be imagined from the era of microsoft, it attracts people not only because its function, but also its beautiful and desirable look, which also, cannot be imagined when microsoft was still the dominants of the market. Apple, different from other large companies exist,are braver to innovate and not afraid to use new people to keep this company spirit alive while one of the co-funder of microsoft Bill Gates still participating in business and too focused to hold on keep their share of market, so they left out the most important part: innovation.
    The differentiation strategy in porter’s model is another reason that helped apple to reach the success today–leave huge market share at its every core market, leave every apple share a bargain so apple have enough space to keep growing, as the largest company in the world already. And because their uniqueness, customer can only come to apple when they want apple products, and they have almost all kinds of products people might need: Mac,iphone, ipod, iwatch….apple is not afraid to cannibalize its own market because apple’s far vision. All that difference leads to a better benefits-new customers keep coming and they get to keep the old ones.This is why apple took over microsoft are valuable, and why apple is an great company that keep offering new and awesome product and new experiences.

    Reply
  23. Jason Cousins

    I believe that Apple overtook Microsoft by out stargazing them by having a first mover advantage and a late mover advantage. What I mean by Apple having the first mover advantage is that Apple was able to produce products that are not out on the market yet. For example, Apple developed the IPhone product. There was nothing like it out yet. Apple wanted to place a computer in every pocket and they were the first ones to do that. Therefore, Apple had the advantage over Microsoft, which was a massive success; “…(Apple’s earnings) more than doubled Microsoft’s current value”. Also, Apple had a late mover advantage strategy, which means they were able to make a better product that was already on the market that was starting to die out. Apple has been able to take some products, like an IPod substitute, that was starting to loose its popularity and make it better. The IPod was not the first product like it on the market, but Apple was able to evolve the system and make it better and user-friendlier, which was successful. Overall, Apple’s ability to out strategize Microsoft and develop products that were successful, led to the dramatic takeover of Apple. What I can also take from this article is that Microsoft became an image of being archaic because it is such an old company, whereas Apple is a new and innovative company. But as I say that, I feel Apple is now become forgettable, that it is not as memorable or new as it used to be and they need to start making decisions that keep them in the spotlight.

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  24. Krysten Lumsden

    Apple overtook Microsoft because it had a vision of the future of computers that was more far-reaching that Microsoft’s. Further, and maybe because it was the underdog at the time, and it was nearing its end – bankruptcy, it was sink or swim time for Apple. Unlike Microsoft, at the time of its turn around it could no longer rest on its laurels. Perhaps its near death experience gave Apple the impetus it needed to take big risks and take the company in a bold new direction. I believe one of those desperate and bold steps included the rehiring Steve Jobs after (I believe) the board had previously essentially got rid of him.

    Further, Apple, as it turns out, has been vindicated in differentiating itself not only on a cost basis but also on a focus basis. For example, when all the big players in the industry were focused on software (Microsoft) or hardware (Intel), Apple was focused on integrating software with hardware. In addition, as other companies were intent on producing computers as cheaply as possible, Apple focused on building computers that were not only beautiful to use but a wonder to see, touch and been seen with, and thus they could maintain huge premiums on their products. Owning and Apple became a status symbol and Apple addicts were born, each dying for the release of latest and greatest from Apple. Apple also differentiated itself in a focused way by creating experiences. When you shop at an Apple store (or even online) it is an experience, it is not just about buying something. Even right down to the packaging is beautifully done. When you get a product you almost do not even want to damage the box, you just want to admire it. That’s the thing about Apple, they create more than awesome products they create awesome experiences.

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  25. Joalee Mann

    I think that Apple overtook Microsoft in becoming more valuable by constantly innovating and trying to obtain a first-mover advantage of the industries they’re in. The article talks a lot about Apple’s ability to set trends and perfect their designs. They were able to leverage their hardware designs in order to build on software profits. Meanwhile, Microsoft was content with sticking to their software believing that people were so accustomed to the Windows operating system that trading in for an for the Mac OS would involve a drawn out learning curve. Now, Microsoft has gone into the same industries as Apple has in Tablets and Smartphones, but with nowhere near the same amount of success as Apple has had.

    I think that a larger part of Apple’s success comes from their differentiation strategy. They have been very successful at marketing their hardware as, arguably, more valuable than it truly is on a specs point of view. The Apple logo on computers and the designs on their phones are probably more popular as a symbol of status. I’m sure Apple fans would argue that their products provide seamless performance and are amazingly user friendly, but of course, for the same cost you could get a much more powerful computer. So, Apple has clearly done an amazing job at being able to differentiate themselves in the industries that they’re in and leverage the brand name on their hardware to increase software sales. I am hoping in the future that Apple devices and operating systems will offer more user-control and recognize open-source trends.

    Reply
  26. Hongyu Xu

    There exist some reasons that Apple can overtake Microsoft. When Microsoft foresaw that computers would appear on everyone’s desk, Apple have already has a bigger step vision, which they believe that the computers would appear in everyone’s pocket, and this pocket computer is smart phone. Apple has a very visionary in creating. However, for Microsoft, they focus too much on the windows, although it has tried to be diversity for many times. Apple uses its unique way to sell their products. Unlike other Android devices, which is available in anywhere, but, if you want to buy iPhone, you have to come to Apple. Because they are unique, so they can be price setter, and have more competitive advantages and gain more profits. For another reason is the good consumer services,For example, after you brought a device, and you found that does not work or it has it has problem due to the manufacturing process, though you have used it for a period, you can go to Apple and change a new one. This cannot make consumers think the quality of Apple’s products are not good, instead consumers would think Apple is really good on this service. So Apple use this way to gain consumers’ trust, which would make people come back and buy some other products they need. For the Porter’s Generic Strategies, Apple use the differentiation competitive strategies in this market, their products are unique, and also they have many kinds of devices, such as iphone, ipod, Mac, Pro. Which are all very creative, efficient and high quality products.

    Reply
    1. Glenn ZoBell

      Apple overtook Microsoft in becoming more valuable for a variety of reasons. The main reason is that Apple was able to create product that was far more advanced, unique, and appealing to customers than Microsoft, who as the article explains, was more focused on protecting their current products than creating new ideas. Apple’s vision was much larger than Microsoft’s. Apple was also not afraid to ‘cannibalize’ their products. The creation of the iPhone destroyed the amount of iPods being sold each year, but it also lead to greater profits. Microsoft again was preoccupied with what they already had. Apple is focused on innovation and making changes that will constantly attract new customers and bring back current ones. Instead of focusing on protecting what they have, they are constantly trying to improve and become more.
      Apple has all types of products from watches, to phones, to computers, to TVs. All of their products are similar in operations and design, however they are much different than any other company. For these reasons I think Apple falls into the broad differentiation strategy in Porters model. They also have large margins on their products which makes them a cost leader, but I feel they are more focused on differentiation than cost.

      Reply

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