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Case Study With Discussion: Options for Growth in a Competitive Ecosystem—Apple

Observers often consider the competitive ecosystem of the smartphone and mobile electronics industry to be a “red ocean” industry. Many rivals engage in direct competition with each other, with increasingly less room to differentiate one product from the others. In such industries, consumers often have the power to drive prices down as rival firms have few other ways to compete. Increased competition leads to thinner profit margins as rivals drop prices further and further.

Yet, even in these conditions, some innovative companies find a strategy to exploit opportunities for growth that rivals cannot easily imitate. For example, in the airline industry, Southwest Airlines and Virgin Airlines have found room to grow, even in the fiercely competitive “red ocean” ecosystem of the airlines industry. This week, you examine a case study of Apple, Inc., which both established a “blue ocean” space in the smartphone industry, and has found room to grow in what is becoming an increasingly global and competitive space.

The essence of the five-force, competitive analysis is to examine whether one might find it attractive or not to compete in a given industry, and where, specifically, there might be “dominant positions” within an industry, and to identify the forces that shape the potential to make money in an industry, given a particular “competitive position.” That is, how will you win? (How will you create unique value?)

To prepare for this Discussion:

  • Review all required readings, including the Weekly Briefing, which provides additional guidance on how to complete the Assignment.
  • Review this week’s case study. You can, and should, scan it multiple times.
  • Identify and review all relevant readings from the MBA Capstone Program Bibliography.
  • Review the figure below to re-familiarize yourself with the elements of a five-forces analysis, which you have used in a couple of other contexts within the MBA program.

The five forces that shape competitive elements in an industry.Copyright 2014 by Laureate Education.

By Day 3, post:

  • A detailed explanation of the critical competitive forces (and their underlying dynamics) in the smartphone industry that may threaten Apple based on a relevant five-forces analysis and other concepts you’ve learned from your MBA program. Be sure to explain how and why you’ve focused on the critical forces that you’ve identified.
  • A detailed explanation of the potential for new entry and/or effective substitute competition, based on a relevant blue ocean strategy analysis and other concepts you’ve learned from your MBA program. Be sure to explain how and why you’ve focused on a particular new entry or substitute threats to Apple.
  • An explanation of the strategic implications of the competitive forces you identified above: what are the opportunities and threats to Apple’s position in the ecosystem of the smartphone industry that it must factor into its strategy for the future, based on your analysis, and why? Provide evidence from the case and any other research you might do, and support your reasoning with references to this week’s readings and from prior MBA program course concepts.

Your response to these prompts should be polished, researched, and well documented.

General Guidance: Your original post, due by Day 3, will typically be approximately 1 single-spaced page in length (cut and pasted into the Discussion) as a general expectation/estimate.