西雅圖求學記

Abstract

Because the information age has come, the industry has changed.  The electronics industry has become one of the most important industries in the world.  The use of electronic products is increasingly close.  Since the computer was invented, it has become a part of peoples’ lives.  Now, almost every family has a computer and every business uses a computer or a laptop in the office.  Therefore, the fact that the computer industry is one of the popular industry cannot be too exaggerated.  There are many famous computer manufacturers in the world.  The purpose of this paper is comparing two companies in computer industry.  The two companies I selected for the industry analysis paper are Apple, Inc. (Apple) and Dell, Inc. (Dell), the two biggest computer companies, which are part of the technology and communications industry.

In this paper, the analysis will follow by the six areas:

• What is each company’s current competitive strategy?
• What are they doing to improve their current competitive position?
• What likely moves or strategy shifts will they make?
• Where is each company most vulnerable?
• What competitive moves will provoke the greatest and most effective retaliation by each company?
• Would you recommend the continuation or modification of each company’s current strategy?

Key words: Computer Industry, competitive strategy, vulnerable

Computer Industry Analysis Paper

Introduction

Both Apple and Dell are American multinational technology companies.  Apple is a company which produces personal computers at its early period.  As time has passed, it has moved to producing produced consumer electronics, software, computers and online services.  According to Dell's report (2015), it devoted to R&D personal computers, sell and service their customers.  The company also makes servers, printers, and other related products.  The company’s main products include desktop computer systems, laptop and tablet computer systems, software and peripherals, networking products, servers, storage products, and printers.  Services include infrastructure consulting services, deployment services, asset recovery and recycling services, training services, support services, and managed services.

However, in order to increase their competitiveness, recent, Apple and Dell have branched out into peripheral industries.  The following table shows the recent developments of Apple and Dell:

Table 1 

Recent Developments of Apple and Dell

Source: Apple, Inc. (AAPL) - Financial and Strategic SWOT Analysis Review & Dell Inc. - Strategic SWOT Analysis Review

What is each company’s current competitive strategy?

As we know, Apple is a successful case of the use of the Blue Ocean Strategy.  The company created new market space and transformed its main industry from a computer manufacturer into a consumer electronics powerhouse.  In its enterprise strategy, in order to keep its high technology segments with the best quality available, performance and size, Apple invested funds in R&D and design.  Apple has also increased the capabilities of its operating systems, hardware, and application software.  The company continues launching its new technologies of making iPhone, iPad, Mac and others products.  Because Apple has powerful manufacturing abilities, Apple makes keep its leadership position in the global market (Apple, 2015).

General sales ways are made products first and then sale. Dell's sale strategy is different.  Dell’s products are customized product, which means Dell made its products after receipt of orders.  Moreover, Dell also doesn't have dealer.  Dell sold its products directly to customers on the official website.  This model let Dell reduce its inventory and costs.  It can offer lower price to its customers.  In the view of the Porter model, unlike Apple, Dell uses cost leader competitive advantage.  "The use of third parties is a part of the company’s strategy to improve its variable cost structure, generate cost efficiencies, improve product deliveries and develop a world-class supply chain"(Dell, 2015).

What are they doing to improve their current competitive position?

In the view of the Porter model, Apple uses a niche differentiation competitive advantage. The competitive advantage of Apple is its products with an excellent design, and high visibility. It is also famous for its superb designs.  However, because of the intense industry competition, the competitive position of Apple has been threatened.

Apple spends a lot of energy developing new products. Through its strong R&D abilities, it overcomes many technical difficulties, enhancing and holding its technological advantages.  Apple has focused on developing the iTunes Store.  The iTunes Store offers a platform to third-party to put their digital content and applications on that platform.  This mode improves Apple’s current competitive position.

In addition to the sales model of Dell being different from other companies, Dell can accurately find a market entry point for high tech products to grab the market.  Dell (2015) indicated that Dell supplies an overall portfolio of storage systems which can have competitive a edge over its peer.   Dell also simplifies the manufacturing process of its products, and increases IT flexibility.  Because of these efforts, it can focus on customer service and make its customers operate more smoothly in their operating system.   Moreover, Dell is continuing effort in products innovation, "including TVs and home theater; monitors; cameras and SLR lenses; computer games; audio devices; and computer parts and upgrades"(Dell, 2015).

What likely moves or strategy shifts will they make?

Even though Apple is successful in its brand’s value and sales market, it faces the pressure of competition, and it has changed its strategy.  On Apple strategy, there are two likely strategic shifts Apple will make.

• Launching of low-priced goods:

iPhone is famous for its high price but not has many models. It launches a new handset model annually.  Compared to other brands, iPhone users don’t have to worry about their smartphones becoming old soon.  However, iPhone changed its strategy; it launched its S series and C Series to attack low-cost handset market.  This strategy shift lets it acquire more users.

• Selling goods from physical store to online store:

Kalb (2015) explained that Angela Ahrendts, Apple Stores chief, is changing their sales model from physical store selling strategy to online sales.  In the Steve Jobs era, he liked to see people waiting for Apple products in order to buy them.  They could show Apple products were in high demand and caused panic in buying.  However, Angela Ahrendts hopes Apple's customers will be able to buy their products instead of being frustrated if the local stores sell out.

Although Dell is successful in its computer market, it is relatively weak in the smartphones market.  Dell knows that it is uncompetitive in this market, and it shifted its strategy to cloud computing fields.  According to Dell (2015), it offers Use Cloud, Build Cloud, and Manage Cloud.  According to a Dell’s report (2015), it shows the partnership with Deloitte, focusing on cloud computing industry solutions.  In addition, "it also offers cloud-based mobile computing solutions and includes a portfolio of Windows-8 touch-enabled tablets and convertibles"(Dell, 2015).

Where is each company most vulnerable?

Apple is well known for its strong R&D competence and technology support, but it is still vulnerable.  Apple (2015) illustrated that the weakness in Apple is legal proceedings and huge debt.

• Legal proceedings:

Litigation increases coasts for a company and decreases its image.  Moreover, it could also affect the company’s fame.  However, the patent dispute, such as design dispute, can be seen everywhere.  Apple was involved in several lawsuits.  For example, "Apple's Face Time infringed on two US patents with regard to a method of transparently creating a virtual private network between a client computer and a target computer"(Apple, 2015, p. 27).

• Huge debt:

Every company is concerned about debt issues.  According to an Apple’s report (2015), Apple increased its debt in FY 2014 even though total revenue increased in 2014.  If a company cannot solve its debt issues, business activities may be affected.

Dell is an internationally renowned brand, but any well-known brand has its weakness.  According to Dell (2015), the weaknesses in Dell are faulty products and patent infringement.  Furthermore, according to a Dell, Inc. SWOT Analysis (2015), it is also vulnerable in the smartphones market.

• Faulty products:

It is impossible that a company only sell one product.  When a company develops to a higher level, it might launch new products.  When Dell got a firm foothold in the computer market, it was continuing to develop new products.  However, Dell’s computers crash, freeze and shut down.  Dell launched new products, Venue 11 Pro, a tablet with 10.8 Full HD in 2013, which has had computer shut down problems, periodic losses of power, and random freezing of the tablet in the new models (Dell, 2015).  These issues could damage the company’s brand image.

• Patent infringement:

As patent infringements between Apple and Samsung resulted in lawsuits for ma

When Apple designed and developed its smartphones and its iOS (iPhone operating system), it pursued of differentiation and low cost simultaneously.  This strategy was very successful.  Relative to others smartphones companies, it is too late for Dell to enter the smartphone market.  While many companies are focused on the smartphone market, Dell can only resell other manufacturers' smartphones.  This puts Dell at a disadvantage in the huge market.

Table 2

 Vulnerable in Apple Inc. and Dell Inc.

What competitive moves will provoke the greatest and most effective retaliation by each company?

In this industry, talent poaching will provoke the greatest and most effective retaliation.  In the IT industry has a famous law called Moore's Law.  Moore's Law, which was proposed by Gordon E. Moore, is a computing term.  It means speeds of processor, or overall processing powers of computers will double every two years (Moore's Law, 2015).  Therefore, except R & D technology, every company wants to retain talents to focus on the development of new products.

For example, Woodburn (2010) mentioned that HP poached Dell’s vice president Charles Quinn.  In addition, before Charles Quinn worked in Dell; he was an EMEA director of sales and operation, and global accounts at Microsoft for five years.  This shows the greatest retaliation by each company is talent poaching.  Thus, how to retain talent to develop new products is the most important thing for each company.

Would you recommend the continuation or modification of each company’s current strategy?

Regarding competitive strategy, both Apple and Dell are focused on the R&D new technology and products.  The difference is that they are focusing on different projects.  While Apple is focusing on its iTunes Store, Dell is devoted to develop cloud computing.

Apple Inc. does very well in its iTunes Store.  The iTunes Store is the largest music retailer in the world.  For recommendations to Apple, I think it should modify its phone strategy.  The only thing that I think Apple can improve is to waterproof its phones.  The iPhone sold very well in smartphone market.  Whenever Apple launches a new phone, it will cause panic buying.  Unfortunately, Apple has never waterproofed the iPhone.  I believe that Apple has the technology to improve this.  If Apple focuses on improving the technology, I believe more people will buy its iPhone.

As for Del, it plays a very important position in the storage market, including storage devices and network storage systems.  Cloud computing and cloud storage offer the preferred method for storage. Therefore, since cloud computing is a trend in the future, I think Dell should continue improving its cloud computing.  It would make Dell be more a competitive advantage.

References

Apple Inc. (2015). Financial and Strategic SWOT Analysis Review. Apple Inc. (AAPL), 1-53

Dell Inc. (2015). SWOT Analysis. Dell, Inc., 1-9.

Dell Inc. (2015). Strategic SWOT Analysis Review. Dell Inc., 1-38

Dell Inc. (2015). Company Profile. Dell Inc., 1-10.

Kalb, I. (2015). Will Apple's Shift in Retail Strategy From Store Lines to Online Be Good or Bad? HuffPost Business. Retrieved from HuffPost Business website: http://www.huffingtonpost.com/ira-kalb/why-is-apple-shifting-its_b_7037326.html

Dell, Inc. (2015). Cloud Computing. Dell. Retrieved from Dell website:

http://www.dell.com/en-us/work/learn/dell-cloud-computing#What-we-offer

Moore's Law. (2015). Moore's Law. Retrieved from Moore's Law website: http://www.mooreslaw.org/

Woodburn, D. (2010). HP poaches Dell’s blue chip boss. CRN channelweb.co.uk. Retrieved from CRN website: http://www.channelweb.co.uk/crn-uk/news/1873179/hp-poaches-dell-s-blue-chip-boss