Reference no: EM131914710

Apple 2015 Case Study

John E. Gamble

Texas A&M University-Corpus Christi

John D. Varlaro

Johnson & Wales University

Since the death of Steve Jobs on October 5, 2011, critics had questioned Tim Cook's ability to lead Apple. Much of the criticism centered on Apple's lack of innovation since Jobs, citing how Cook may not possess the same product vision. Further, many wondered whether Apple could sustain its success. Yet, despite the economic conditions in the United States post-recession, Apple Inc. had been able to sustain its impressive growth, resulting in a 275 percent growth in net sales between 2010 and 2014. The company set record quarterly revenues and profits during its second quarter of 2012, which resulted in its stock price catapulting to a level that made it the world's most valuable company-a title it continued to hold in early 2015 with market capitalization of nearly $760 billion. Some analysts speculated that Apple might eventually become the world's first trillion-dollar company.

Despite the company's tremendous successes, new challenges faced Cook and his chief managers in 2015. The company had yet to reverse the general decline in iPod unit sales and was facing a serious competitive threat in both the smartphone and tablet markets. Samsung had surged to the top of the smartphone market in late 2011 by introducing the Galaxy and other models that utilized Google's Android operating system to match the key features of the iPhone. In 2015, Android maintained its status as the most widely used operating system platform for smartphones worldwide with a 24.5 percent share of the market at year-end 2014. Dell, HP, and other computer manufacturers had also released tablet computers, furthering pressure on the iPad.

Apple's record growth in revenues and profits in previous years came primarily from volume increases in the sale of iPhones and iPads. Still critical to the company's financial performance, iPhone sales accounted for $102 billion of the company's 2014 revenues of $182.8 billion, and Apple's iPad tablet computers were the company's second-largest contributor to total revenues with sales of more than $30.2 billion during 2014. Although iPhone sales increased by 12 percent in 2014, sales of the iPhone had experienced a 16 percent year-over-year increase from 2012 to 2013. In addition, iPad sales had decreased by 5 percent from 2013 to 2014. Disappointing sales continued for the iPod, with a 48 percent year-over-year decline in sales in 2014.

With competitive rivalry continuing in the smartphone and tablet market, Cook and his chief managers would need to consider different avenues for growth. The single largest growth in sales was within Apple's iTunes, App, Mac, and iBookstore, where revenues increased by 40 percent between 2012 and 2014. Also, the rising popularity among consumers to seek alternatives to cable television had fueled sales of Apple TV in 2014. And it was still undetermined how Cook's unveiling of the Apple Watch in September 2014 would impact the company's prospects for growth in revenues.

Please give a thesis and Answer the following questions? I need a page or more

What are the chief elements of Apple's overall competitive strategy? How well do the pieces fit together? Is the strategy evolving?