The focus of this project was to capture success of one of the most worldwide know company - Apple and track down its way to overcome its competitors. With the use of RBV Theory, Dynamic Capabilities Framework and Business Model Canvas.

1. What is Apple´s sustainable
competitive advantage?
Kristine Bezbaile, Korinna Ringendahl,
Mara Munk Jensen, Magdalena Zając

2. Overview
• Business Model Canvas Analysis for Apple
• Resource Based View Analysis for Apple
• Resource Based View and Business Model Canvas
=> Sustainable Competitive Advantage
2

3. Source: Business Model Canvas 1
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4. Value Proposition
“Steve Jobs famously said that market research is useless because customers
did not know what they wanted until he showed it to them. “
(Hixon, 2012)1
• How to satisfy customer needs?
• What bundles of products and services does Apple offer to its customers?
Source: 1Hixon,(2012)
4

5. Value Proposition
Unique User
Experience2
Minimalist
Design1
Value
Proposition
Service at
Apple Stores4
Product
Performance3
Sources: 1Burrows & Satariano , (2012); 2Osterwalder & Pigneuer (2009); 3Apple Inc, (2014); 4Apple Inc, (2014);
5

6. Key Resources
Definition 1
Resources are all assets (tangible and intangible), firm
attributes (reputation and innovation), information, know-how
controlled by a firm that enables to implement strategies that
improve its effectiveness and efficiency.
• Which Assets does Apple require to create
Value Proposition for its customers?
Source: 1Barney, (1991)
6

7. Key Resources
Tangible
Physical Resources:

Foxconn manufacturing plant in
Huaian, China (employees 35800)1
Apple Stores:
- sales locations
- advertisement strategy
=> 2013: Worldwide Sales
approx. 171$ mil.2

Intangible
Human Resources:
• Software development teams:3
- Highly skilled workers with
experience, knowledge and creative
problem solution skills
- Including creativity capability to
develop easy use products with great
design of software
Intellectual Resources:



Brand (Product quality)
Value 98.3 $ billion4
Patents (touch sensing architecture)5
Partnerships (strategic partnership
with the Microsoft)
=> It produces Microsoft Office for
the Macintosh)6
Sources: 1Cheng, (2012); 2Annual Report, (2013); 3Denning, (2012); 4Mourdoukoutas, (2013);
5Purcher, (2014); 6Businessinsider Inc, 2013
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8. Key Activities
Definition1
• Most important actions a company must take to operate successfully
• To create and offer a Value Proposition, reach markets, maintain Customer
Relationships and earn revenues
• What Key Activities does Apple require to create
Value Proposition for its customers?
Source: 1Osterwalder & Pigneuer, (2009)
8

9. Key Activities
• Apple store (Tim Cook: “They are the face of Apple…”)1
• Retail sales concept, characterized by exclusive design
• Enabling customers the interaction/ testing of products2
• ca. 395 million visitors in 2012
Graph 4: The iPhone Stores – Asymco, (2013)
Source: 1 Elmer-DeWitt, (2013); 2 Moritz, (2011)
=> Creation of unique user experience
=> Key components of Apples marketing strategy
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10. Key Partners
Definition1
• Describing the network of suppliers and partners
that make the business model work
• Companies create alliances to optimize their business models, reduce risk or
acquire resources
• Which Key resources does Apple acquire from partners?
• Which Key Activities do partners perform?
Source: 1Osterwalder & Pigneuer, (2009)
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11. Key Partners
• Strategic alliance:
• Enabling extension of own capabilities
• Obtaining knowledge or even access to customers1
• AT&T - wireless provider:
• Carrier of the iPhone in the USA
• Q´4 - 2011 => over 7.6 million activations
=> AT&T´s performed Key Activity:
Distribution of the iPhone´s
Graph 5: Souppouris, (2013)
=> Apple´s acquired Key resource:
Voice and data network access2
Source: 1Osterwalder & Pigneuer, (2009); 2Cohan, (2013)
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12. Resource Based View
Definition1
• The resource based view is a relevant model in analysing the
sources of a company’s competitive advantage.
If the firm can
exploit
opportunities or
neutralize
threats through
the resources
If the
resources
are costly to
copy
Competitive
advantage2
Figure 6: Resource Based View. (Own development, 2014)
Source: 1Beard & Sumner (2004); 2Barney, (1991)
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13. VRIO Framework
• Is it rare?
• Is it valuable?
• Is it imitable?
• Is it exploited in the organisation?
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14. Is it imitable?
• Causal Ambiguity
• Path dependency
• Social Complexity
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15. Causal Ambiguity
Resources
Performance
Management
Sustainable Competitive
Advantage1
Figure 7: Sustainable Competitive Adv. (Own development, 2014)
Source: 1 Enders, (2004); Barney, (1991);
King & Zeithami, (2001); Reed & Defillipini, (1990)
15

16. Path Dependency Competitive
advantage –
historical path2
Developing
resources –
historical path1
Patenting the
iPhone in 20073
Apple
1st mover
advantage ->
BLUE OCEAN
Figure 8: Path Dependency. (Own development, 2014)
Sources: 1Pot, (2000) 2Hamalainen, (2003) 3Iyiola, (2013)

17. Figure 9: CNN Money (2011)
17

18. Exploited by
the
organization
Competitive Implications
Economic Performance
Resource
Valuable
Rare
Costly to
Imitate
Innovation
Yes
Yes
No
-
Temporary competitive advantage
Above normal
First mover
advantage
Yes
Yes
Yes
Yes
Sustained competitive advantage
Above normal
iTunes
Yes
Yes
No
-
Temporary competitive advantage
Above normal
Brand reputation
Yes
Yes
Yes
Yes
Sustained competitive advantage
Above normal
User-friendly
design
Yes
Yes
No
Temporary competitive advantage
Above normal
Top executives
Yes
Yes
No
-
Temporary competitive advantage
Above normal
International
product
distribution
Yes
No
-
-
Competitive parity
Normal
Simplicity
Yes
No
-
-
Hardware
Yes
No
-
-
Software
Yes
No
-
-
Customer loyalty
Yes
Yes
Yes
Yes
Location
Yes
No
-
-
Competitive parity
Normal
Competitive parity
Normal
Competitive parity
Normal
Sustained competitive advantage
Competitive parity
Above normal
(Decker, 2013)
Normal
Table 10:
Decker, (2013)
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19. Resource Based View & Business Model
Canvas
Sustainable Competitive Advantage
Resource Based View
• First mover advantage
• Brand reputation
• Customer Loyalty
Business Model Canvas
• Combining software and hardware
design into one device
• Mixture of intellectual resources in a
socially complex way
• But still simple to use
• Unique user experience
• Specific resources/activities trough
partnerships if necessary
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20. References
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APPLE INC. (2013) FORM 10-K Annual Report [Online] Available from http://investor.apple.com/SECFilingNav.cfm?FilingID=1193125-13-416534&CIK=320193.[Accessed:
15th December 2014]
ASYMCO. (2013) The iPhone Stores. [Online] Available from: http://www.asymco.com/2013/07/30/the-iphone-stores/. [Accessed: 23rd of January 2014]
BARNEY, J. (1991) Competitive advantage, Resource Based Theory of a Firm. [Online]. p.170-173 Moodle. Economics and the organization of economic activity. Session
5: Resource Based Theory of the Firm.
BARNEY, J.B. (1991) Firm resources and sustained competitive advantage. Journal of Management. Vol.17.
BEARD, W. J. & SUMNER, M. (2004) Seeking strategic advantage in the post-net era: viewing ERP systems from the resource-based perspective. Journal of strategic
information system. [Online]. (April). p. 130-132. Available from: http://www.sciencedirect.com/science/article/pii/S0963868704000058. [Accessed: 8.12.2013].
BURROWS,P & SATARIANO,A. (2012). Apple's minimalist Ive assumes Jobs's role for design.[Online]. Available from: http://www.bloomberg.com/news/2012-1101/apple-s-minimalist-ive-assumes-jobs-s-role-setting-design-vision.html. [Accessed: 10 of January, 2014].
Businessinsider Inc, (2013) Microsoft And Apple Actually Don't Loathe Each Other, And Here Are Examples Of Them Working Together [Online]. Available from:
http://www.businessinsider.com/how-microsoft-and-apple-work-together-2013-6#2013-iphone-app-running-on-windows-azure-1. [Accessed: 20 January 2014]
Cheng, R. (2012) Foxconn Spending $210M on New Apple Production Line. [Online] 21st of May 2012. Available from: http://news.cnet.com/8301-13579_3-5743813237/apple-partner-foxconn-invests-$210m-in-new-plant/.
COHAN, P. (2013) Project Vogue: Inside Apple´s iPhone Deal with ATT. [Online] Available from: http://www.forbes.com/sites/petercohan/2013/09/10/project-vogueinside-apples-iphone-deal-with-att/. [Accessed: 22nd of January 2014]
DAFT, R. (1983). Organization theory and design. New York: West.
DECKER, A. (2013) Resource Based View, [Lecture Notes] Lecture Notes on Resource Based View. Economics and the Organization of Economic Activity. Aalborg
University, International Business Centre, Fibigerstraede 2, room 21, September 2013.
DENNING, S. (2012). Is Apple truly Agile? [Online]. Available from:http://www.forbes.com/sites/stevedenning/2012/02/03/is-apple-truly-agile/. [Accessed:10 January
2014]
ELMER-DeWitt, P. (2013) Tim Cook´s Prozac: The Apple Store in three charts. [Online] Available from: http://tech.fortune.cnn.com/2013/02/13/apple-store-cook-prozac/.
[Accessed: 22nd of January 2014]
ENDERS, A. (2004) Management Competence: Resource-Based Management and Plant Performance (Contributions to Management Science). Germany: Physica-Verlag
Heidelberg.
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21. References
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HAMALAINEN, T. (2003) National competitiveness and economic growth. [Online] Massachusetts: Edward Elgar Publishing, Inc. Available from:
http://books.google.dk/books?id=iB3AzcWKXDwC&pg=PA29&lpg=PA29&dq=imperfect+imitability+path+dependence&source=bl&ots=lZwHisAlW8&sig=9fTnHJ6htQyjHLQNM39u
JATXlFQ&hl=en&sa=X&ei=9DjhUvWDJ6Px4QSUvYGABQ&ved=0CEQQ6AEwBA#v=onepage&q=imperfect%20imitability%20path%20dependence&f=false. [Accessed: 21 January
2014]
HIXON, T. (2012). The all important value prop.[Online]Available from http://www.forbes.com/sites/toddhixon/2012/07/20/the-all-important-value-prop. [Accessed:22nd
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IYIOLA, O (2013) Sustainability of competitive advantage: a must for every firm. College of Business and Social Studies (Marketing). [Online]. p. 1-6. Available from:
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KING, A.W. and ZEITHAMl, C.P. (2001) Competencies and firm performance: examining the causal ambiguity paradox. Strategic Management Journal.
MORITZ, M. (2011) Apple – Die Geburt eines Kults. Kulmbach: Börsenmedien AG
MOURDOUKOUTAS,P. (2013).Apple's most important branding lessons for marketers.[Online]Available from:
http://www.forbes.com/sites/panosmourdoukoutas/2013/10/05/apples-most-important-branding-lesson-for-marketers/. [Accessed:17 of January, 2014].
NAIDU-GHELANI, R. & BAGCHEE, D. (2011) 10 Significant Apple Business Partners. CNBC [Online]. Available from: http://www.cnbc.com/id/44269115/. [Accessed: 17th December
2014]
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PURCHER, J. (2014). Apple Granted 36 Patents Today Covering a Touch Sensing Architecture, Multitouch Magic Mouse, Intelligent Pairing & More. [Online]. Available from:
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REED, R. & DEFILLIPINI, R.J. (1990) Causal Ambiguity, barieers to imitation, and sustainable competitive advantage. Academy of Management Review.
SOUPPOURIS, A. (2013) Verizon posts $4.23 billion Q4 loss despite record subscriber growth and smpartphone penetration. [Online] Available from:
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22. Thank you for your
attention!
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