2. 1 INTERNATIONALBUSINESSSTRATEGY
A decade ago, RIM (BlackBerry's manufacturer) was the first company that opened the
smartphone market with the first phone with e-mail function, attracted a lot of customers are
mainly business people and Government officials. Today, RIM struggles to compete with Apple
and other smartphone makers. So why Blackberry used to be so popular?
The answer lies in both design and hardware, while mentioning BlackBerry we will immediately
associate it with good quality hardware, BBM messenger, push email and physical QWERTY
keyboard, some people claim that they can even typing ten pages text with a lightning speed by
QWERTY keyboard. In addition to information security of the BlackBerry is absolutely safe,
both from external and internal threats, they never had any scandals reveal information about
individual users. Security is always critical in the selection of the principal smartphones
worldwide, includes not only politicians but also big names in the entertainment industry, those
concerns were personal phone infiltrate.
So what are the reasons that make BlackBerry become failure and then replaced by Apple and
Android devices?
In 2007, the arrival of iPhone and the BlackBerry's slow change made everything changed.
Instead of wary opponent, BlackBerry ignored and still pointing their products to the business
community. Then, two years later, when Apple developed very quickly by the iPhone and App
Store applications, BlackBerry realized the changes in consumer tastes, it is too late. From now
on BlackBerry Company’s lack of a real strong strategy, still burning cash, losing sales, market
share is going down. Both ordinary users and business people need a cell phone can entertain and
support the work, while the BlackBerry that time cannot satisfy both needs in a way like the
iPhone integrity. Firm seeking a renewal, but it was too late. In 2009, the share price of the
BlackBerry was down to less than fifty dollars, down five times in just two years. Another reason
is BlackBerry's customers are business people and so its price is too high compared to a cell
phone carries less entertaining as it is now. BlackBerry should remember that people with low
and middle incomes, it is always a high percentage, they are the most used phones, the potential
that others have exploited. Moreover the BlackBerry app store too poor and almost eighty
percentage are fee application. Since then, BlackBerry slump in the crisis.
3. 2 INTERNATIONALBUSINESSSTRATEGY
Related to the concept that I have learned in class about Michael Porter's five forces to discuss
why apple is so successful.
First is about threat of new entrants. There are considerable barriers to the companies wanting to
compete with Apple. Any new entrant into the technology sector has to absorb substantial costs
in research and product development as well as marketing and distribution. When barriers are
high, it is more difficult for new competitors to enter the market. High entry barriers positively
affect profits for Apple, and also the advantage of higher capital requirements. Apple's strength
now create barriers for other phone manufacturers to entry the industry. They create the
challenges that new competitors need to have large-scale and adventure with the strong reaction
from existing firms or join small scale sector and accept the cost disadvantage.
Next one is the network effects. We can easily realize that Apple has benefited from network
effects. The first type of network effect that Apple has benefited from is information effects.
When customers are looking to buy a new product, they tend to find what is the most famous in
the market. Since Apple sells so many products, consumers looking to buy something assume
that Apple product buyers had information that helped them choose an Apple product rather than
a competitor’s product. For example of this force is iPod's case. At that time, dozens of MP3
players on market plus millions of songs and Apple launches iPod using MPEG-4 encoding
(.mp4). Co-launched iTunes as a complementary product, users could easily buy a full album or
1 song at a time legally from central point. IPod/ iTunes sales took off, dominating market
(Apple now world’s largest music retailer). As mp3 players started to become more popular,
shoppers all over the US had to decide which mp3 player to purchase. If a person didn’t have
much knowledge of their own about a product to buy, they could assume that people who had
already purchased an iPod must have had knowledge which convinced them to buy an iPod
rather than a different mp3 player.
Apple has also benefited from the fact that its consumers experience the direct-benefit effect.
One other example is the Apple App Store. Since so many people own Apple products, app
designers want to create their apps for the Apple platform rather than other platforms. They
know that having an app in the Apple App Store will expose it to more people, which will lead to
more people buying the app. This also benefits Apple users because they have more apps
available to them. Another example is like a woman who use a non-Apple mp3 instead of Apple
4. 3 INTERNATIONALBUSINESSSTRATEGY
iPod because of the higher price. As more and more her friends starting to use iPod, the
percentage of her friends using iPod will rise lead to promote her want to stop using her mp3
player and buy an iPod. As more and more people use Apple products, more people will decide
to switch to Apple products rather than their current products, because their friends and family
are using Apple products. All of these network effects have played a role in helping Apple to
become successful.
Besides that, the power of the supplier. Porter's second force states that the bargaining power of
suppliers imposes a threat to any company. It also includes, the availability of substitute
suppliers which is an important factor in determining the power of the supplier. So, it is
important for Apple to have a good relationship with its suppliers to constant their power.
Another important force is the power of buyer. The buyer's bargaining power is very high in the
industry because the competitors offer a wide range of similar products with competitive prices.
The Apple Corporation faces a moderate threat from buyers because they have a lot of products
that consumers can choose from. In addition, the threat of buyers comes from their demand for
new features in Apple products. However, there are a large number of companies that offer
similar products and there is quite a big differentiation in price and performance. Therefore,
loyalty is often shown towards a specific brand because there are not many differences in the
quality and price between brands. Buyers are often more sensitive to brand rather than price.
Apple's customers are individuals, education departments, enterprises, governments and creative
customers. So, the variety of consumers and their needs has a direct impact on Apple's future
strategies.
After that we have threat of substitutes. The technological environment is changing fast every
day. There are not many substitutes in this industry because of the high-tech features. However,
alternatives are always available from competitors. If some other company such as BlackBerry,
Google, Samsung or Microsoft come up with new technology or the same kind of phone at a
lower price or with more features at the same price, then this is a problem for Apple (O' Grady,
2009). Customers usually tend to look to the latest technology instead of traditional methods.
Apple has the ability and efficiently to design and develop its own hardware and application
software to become unique and distinct from its competitors.
5. 4 INTERNATIONALBUSINESSSTRATEGY
Furthermore, about competitive rivalry. The competition in this industry is very high, almost in
all areas of business, because of the continuing requirement to provide new products all the time.
Competitive prices, new products, design innovations and technology are the main factors that
Apple has to compete with other international companies. Apple gain customers through their
high quality products, features and innovative design, which makes their products popular all
over the world.
And the last one that I can explain is switching costs. Apple iTunes is the best example in that
force. Apple give away iTunes for free and integrate management of music and purchasing of
music with the iTunes software, effectively making harder for customers to switch to another
solution. A very effective retention strategy. The costs of purchasing other software and having
to convert your music to the new solution are a barrier to switching. Systems can be sticky and
users can be loyal to a product just because switching is such a hassle, customers may not want
to move to another devices anymore. Switching costs apply to how customers will be attracted,
acquired and retained. iTunes figured out how to actually lower their own switching costs - by
making it super simple, and thereby delighted customers - they wanted to stay with Apple, vs.
the high costs of the competitors.
Finally, I think apple iPhone is a successful example of the typical blue ocean strategy. Between
the periods of the phone manufacturers are competing how to become a winner in this race, they
always try to look at the opponent's weaknesses to create a different product with features better,
superior. however, they have fallen into a vicious circle, such as making a phone with better
buttons, a larger screen, better camera ... All of this smartphone has gradually integrate multiple
applications, features similar to a computer, but are using a regular keyboard or a full QWERTY
keyboard, the screen size is not bigger than 2.8inch, use the Windows Mobile operating system,
BlackBerry OS, Palm, Symbian. At this time, Apple began to attack the smartphone market with
the iPhone 2G in 2007. As co-founder of Apple, the company was on track, introducing a cell
sample although there are still many weaknesses, but first leader in touch technology, changing
market segment. Until now, the iPhone has added three more versions and become one of the
largest revenue producer in this fertile market. Special thing starting from the stage of product
development and unique in that it was kept secret about product information for nearly two and a
half years of development. Seen from the perspective of the blue ocean strategy, we can say this
6. 5 INTERNATIONALBUSINESSSTRATEGY
is a way for Apple to avoid competition or, more specifically, the followers of the "big" mobile
on the market at that time, so that when any suspect released, it becomes different, became the
pioneer and opens a new market for their own big rivals while it still astonished because
"unbelievably iPhone is real". Best-selling product is not necessarily the best, most powerful
configuration. Many people buy iPhone simply because everyone talks about it. The first time
when Apple launched the iPhone, it's like a revolution in the field of smartphones. It is more
important than experience, novelty of the iPhone until now, perhaps people do not forget. Not
aimed at the high-tech experience, low price, or market positioning fixed. The iPhone gives a
whole new experience in the world of smartphones at the time. iPhone users feel about the social
class, the difference, enjoy, as well as the "receptions" of Apple with their customers. Apple
declined the application to reduce costs - to get the target costs: poor camera when shooting
without flash. Software applications are few, almost old-fashioned communication discarded
(sliders, virtual keyboard), Bluetooth interface, Wi-Fi is not strong and often integrated with the
Apple ... and there are many other factors such as: high maintenance costs, must register two
year subscription... But other factors are very great, to make up the difference entirely. The
design without keyboard, first multi-touch can help users communicate gently with your finger.
The design is simple, compact, delicate, little buttons; Safari web browser is a web browser is
considered the world's fastest in the words of Apple; smart browsing capabilities, Global
Positioning System GPS uses information obtained from the satellite's orbit around the Earth to
locate; iPhone widescreen with touch controls fast and responsive multitasking; iPhone longer an
iPod to listen to music, watch movies 3.5-inch wide screen; integration with peripherals (though
very few): control, automotive equipment. There are also emotional factors when using the
iPhone: users it deserves to stand in one class of society - which is why the iPhone make more
PR strategy is the headlining clip. That is the strong point of the iPhone, overshadowing its
weaknesses (iPhone 3G - operate with the speed 2.5G) while keeping prices very cheap.
In conclusion, I got so many knowledge from this essay. The lesson to be drawn after the subject
is in the age of digital technologies grows, if you want to become a successful business, in
addition to analytical attention to factors external impact as inside, you must try to be different,
as the same way that Apple has done.
7. 6 INTERNATIONALBUSINESSSTRATEGY
REFERENCES
Michael, P. (2011). HBR’s 10 Must Reads On Strategy. Harvard Business Review
Essays, UK. (November 2013). Strategy Model And Analysis Of Apple Marketing Essay.
Retrieved from https://www.ukessays.com/essays/marketing/strategy-model-and-analysis-of-
apple-marketing-essay.php?cref=1
James, K. (May 2012). What are the barriers of entry when competing against Apple? Retrieved
from https://applecoeconomics.wordpress.com/2012/05/11/what-are-the-barriers-of-entry-when-
competing-against-apple/
Sam, G. (September 2013). The fatal mistake that doomed BlackBerry. Retrieved from
http://business.time.com/2013/09/24/the-fatal-mistake-that-doomed-blackberry/
Investopedia (January 2016). Apple: Porter’s Five Forces. Retrieved from
http://www.investopedia.com/university/apple-porters-5-forces-analysis/
