ANTH 438 Lecture Notes - Lecture 3: Apple Pay, Desktop Publishing, User Friendly
23 May 2018
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Apple Case
• What, historically, have been Apple's competitive advantage?
o Ease of use (user-friendly graphical interface, plug & play peripherals)
o Proprietary operating system
o Innovative appealing design of devices
o Buyer loyalty
o Strong brand
o Ability to build ecosystem: iTunes, videos, apps, software, Apple Pay
o Strength in education & desktop publishing applications
o Economies of scales
o Economies of scope
• Analyze the personal computer industry. Why did Apple struggle historically in PCs?
o 5 forces in PCs plus complementors
• Buyers
o How powerful are buyers within the PC industry today?
• Who buys?
• Generally IT or purchasing
• What volumes?
• Most companies replace every 3-4 years
• For large companies, probably buy as many as 100,000 PCs per year
• How sophisticated are the buyers?
• Today, very knowledgeable about products and technology
• How important is service and support?
• Still matters to many companies, but there is low willingness to pay for service
• What drives the purchase decision -brand or price?
• Price
o Very powerful buyers
• Suppliers
o Where does the balance of power lie between manufacturers and suppliers?
• Suppliers of components such as disk drives have no real power over PC
manufacturers
• Intel and Microsoft's power comes from: high entry barriers (huge scale economics
to build CPUs and develop modern operating systems), brand (Intel Inside,
Windows) and customer lock-in (need for software compatibility, network effects)
• Intel and Microsoft : profits ~33 billion in 2014
• Entry barriers
o Barriers to entry: how hard is it to enter the PC business? What do you need?
• Components are standardized and widely available
• Assembly: not difficult
• Distribution can be done cheaply (often over internet)
• Customers are price sensitive and knowledgeable
• White box PC: heavy usage in small office, home office users,
customized products at very low prices, with the promise local, low cost service
o Barriers to entry are very low
• Very few industries are lower entry barriers
find more resources at oneclass.com
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Document Summary
Apple case: what, historically, have been apple"s competitive advantage, ease of use (user-friendly graphical interface, plug & play peripherals, proprietary operating system. Innovative appealing design of devices: buyer loyalty, strong brand, ability to build ecosystem: itunes, videos, apps, software, apple pay, strength in education & desktop publishing applications, economies of scales, economies of scope, analyze the personal computer industry. Why did apple struggle historically in pcs: 5 forces in pcs plus complementors, buyers, how powerful are buyers within the pc industry today, who buys, generally it or purchasing, what volumes, most companies replace every 3-4 years. Still matters to many companies, but there is low willingness to pay for service: what drives the purchase decision -brand or price, price, very powerful buyers. Suppliers of components such as disk drives have no real power over pc manufacturers. Intel and microsoft"s power comes from: high entry barriers (huge scale economics to build cpus and develop modern operating systems), brand (intel inside,
