Wednesday, April 2, 2014

Apple's Unique Competitive Advantage in the Smartphone Market.

Last week, we discussed about the elements that allow companies to have a sustainable competitive advantages. These elements according to Michael E. Porter are

  • Unique competitive position for the organization 
  • Activities tailored to strategy 
  • Clear trade-offs and choices vis-à-vis competitors 
  • Competitive advantage arises from fit across activities
  • Sustainability comes from the activity system, not the parts 
  • Operational effectiveness a given
Then I thought about how these elements are used in relation to the smartphone market.

Apple was the first to produce an all in one device back in 2007, this was the original iPhone. The first model of the iPhone was a great success and it hit the world by storm. They sold 6.1 million units in the first 5 quarters after it's initial release. Following the success of the first iPhone, Apple today still continues to produce a newer model each year to keep up with it's high demand. Of course, when demand is high for a certain type of product it will bring in competition. Google's mobile OS, Android, was introduced in 2008 in response to 2008. However, Google's initial response to the market was not completely successful as you can see below. 


The initial Android was hard to use and was not able to compete against apple as a world-wide smartphone. Since Apple was the first to enter the market, which set the standard for the rest of the incoming competition. However, eventually Android was able to respond by surpassing the expectations set by Apple with better innovation in 2011. 


As you can see the grow of Android now surpasses Apple. However, Apple is able to compete even though their device is less advance because of 3 reasons, brand recognition, easy of use, and the app market.

Apple's iPhone has been a brand name since the device first came out and over time it's still the easiest smartphone device to pick up and use because of it's simplicity. Their market has also been the dominate force that causes people not to switch devices. Their apps stores has a lot more to offer than the android market and apps purchased through these apps can only be used by Apple products. Thus, once you switch, you lose all your apps and you would have to purchase them again on your new Android device. This has caused many Apple users to stay with Apple cause the cost of switching is a lot more than just the cost of the device itself. This is why Apple is still able to remain sustainable in such a competitive market even though they are behind in technology. 

Source: http://weaddvalue2.web12.hubspot.com/Portals/188908/docs/hbr.what%20is%20strategy.pdf

Image: https://www.google.com/search?q=iphone+vs+android+users&espv=210&es_sm=93&tbm=isch&tbo=u&source=univ&sa=X&ei=d288U-HhNObgsASA1ILQBQ&ved=0CCoQsAQ&biw=1920&bih=979#facrc=_&imgdii=_&imgrc=tkwG3tY5MMlXYM%253A%3BbvWE83-gT3_b2M%3Bhttp%253A%252F%252Fimages.intomobile.com%252Fwp-content%252Fuploads%252F2010%252F05%252FiPhone-v-Android1-e1274898787807.png%3Bhttps%253A%252F%252Fwww.intomobile.com%252F2010%252F05%252F26%252Fadmob-metrics-for-april-android-vs-iphone%252F%3B530%3B309

https://www.google.com/search?q=iphone+vs+android+users&espv=210&es_sm=93&tbm=isch&tbo=u&source=univ&sa=X&ei=d288U-HhNObgsASA1ILQBQ&ved=0CCoQsAQ&biw=1920&bih=979#q=iphone+vs+android+users+2013&tbm=isch&facrc=_&imgdii=_&imgrc=HXcYHRaafoVsdM%253A%3BQAEOrK8nCd_pVM%3Bhttp%253A%252F%252F83-136-248-155.uk-lon1.host.upcloud.com%252Fwp-content%252Fuploads%252F2013%252F03%252FScreen-Shot-2013-03-11-at-3-11-10.26.01-AM.png%3Bhttp%253A%252F%252Fwww.asymco.com%252F2013%252F03%252F11%252Fwhere-are-the-android-users%252F%3B841%3B1163

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