Swot Analysis of Apple as Per Its Position in Market in 1980’s

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had. No other competing firm at that time had these valuable capabilities like that Apple. So there was no question of imitability.

This love affair with Mac, allowed Apple to sell its products at a premium price. Top of the line Macs went upto 10,000$ .It was seen as BMW of the computer industry. It earned gross profit of 50%. In 1990, it even offered many combination of products and prices to regain market share and launched Mac classic at 999$ and power book laptops.

Answer 2.

After studying the case and as per the SWOT analysis done above, we can say that the performance of Apple deteriorated from 92-97 because the company began to deviate from it’s strength. Apple company’s products were catered to target the higher segment of the market. It enjoyed a profit margin of 50-55%. Apple’s R&D was its major strength which helped the firm to innovate new ideas and products to bring change in the world through technology. Earlier it used to spend 9% of its sales to R&D, compared with 5% at Compaq and 1% at IBM. But in early ‘90’s Apple deviated from it’s strength to cater to the middle class segment by competing with the Microsofts and IBMs. For this, it slashed its costs, cutting 16% of its workforce and reduced its R&D spending. In doing so it was trying to enter the market in which Apple didn’t have a stronghold.

As mentioned above the weakness of Apple of having slow processing speed, not having third party compatible software’s and also no accessory but only Apple accessory could work with Apple devices were the major points why Apple found it difficult to cater to the middle class segment. They couldn’t successfully break the market, since Microsoft had made its software’s compatible with other devices. Microsoft allowed third party compatibility at much cheaper price. Because of these issues customers started to think why shall one buy Apple products. Apple had started loosing market share since it had lost its niche in the market.

Apple also had started handing out licences to other parities to use its software as an operating system. Because of this Apple began to loose its rarity in the market. It started being perceived as a common product but at a high price. These are some of the reasons why Apples performance deteriorated from ’92-’97.

Answer 3. Yes Steve Job put company back on track after returning to leadership in 1997. His decision to end Macnitosh licensing program was based on the vision he had for apple. He wanted his products to be unique but by licensing Macnitosh the rarity feature of the Mac was lost. Not only that, it was also cannibalizing Apple’s sales.

Instead of making the Macnitosh work on other computers, he did the opposite by making other components like peripherals usable on the Mac. It also brought the widely popular Microsoft office suite to Macnitosh by forging alliances with Microsoft. Since office was a widely accepted piece of software, its functionality on Mac implied that consumers who valued office wouldn’t turn away from Macnitosh.

Also Jobs consolidated his distribution channel and also offered sales through online mode. Jobs increased spending on one of its biggest strengths i.e. R&D.

Jobs also reenergized Apple’s image as a hip alternative to other brands. This was a very important step as earlier this was the reason that Apple was able to charge a price premium. But by trying to enter the low price PC segment it had somewhat downplayed on that strength. Reinforcing that image was crucial to Apple’s success.

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