Friday, June 21, 2013

Apple : From Blue to Red !!

Blue Ocean strategy aims at creating new markets or altering the boundaries of existing markets and create a competition free market place where you are the leader, the driving force and concentrate on value creation rather than on "killing the competition". Visualizing Blue Ocean strategy in this way brings to mind Steve Jobs and Apple which created a number of blue oceans one after the other with iPod and iTunes, iPhone and then the iPad, revolutionizing the industry in the process.

Broadly looking at Apple's strategy through these years years its evident that their principles were in line with the Blue Ocean strategy.Through iTunes they revolutionized the music industry, creating a brand of their own. They nipped piracy in the bud. There were MP3 players and then there were iPODs. They had superior quality, excellent interface, high quality good music at cheap costs thus creating a great value proposition. It was a brand, created a "cool" factor thus differentiating itself from it competition. iTunes and its brand made the competition irrelevant. Similar impact was created with iPhone and iPad. Eventually they created a complete ecosystem of iProducts tied together in the iCloud. This ecosystem I would say is the biggest blue ocean they have created. It cannot be imitated easily - No other company has a such a strong portfolio of products and fan following. They offered an unmatched interoperability among all its devices, earned customer loyalty and attracted more and more customers to the Apple family.

But since that, they really haven't launched or created a mind blowing product which is difficult to copy, adds a lot of value and would attract customers. In fact, they are loosing the advantage they had as their markets are turning into red oceans. Apple TV offers a great integration between various Apples products and they are increasing the subscriptions offered, but still the feature set lacks compared to their major competitor Roku and prices are as expected very high.Also, support just for iCloud and apple devices keeps the TV an attraction to just old customers. Apple is definitely loosing ground here. Moreover, the focus seems to be on eradicating competition now. The the major news about Apple being the law suits and not its products is a concern I believe. Under Cook's leadership, it seems they are producing just incremental versions aggressively going against opponents and "win" the customer share from them.

Apple needs to get back to it roots. Focus on innovating and come up with something new and redefine the horizons as it has already did. The next generation of Apple TV might be the next big thing creating a new Blue Ocean altogether.

References :
Blue Ocean Strategy - W. Chan Kim, Renee Mauborgne, Harvard Business Review,


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