1. 50 Points Choose one of the opening cases from chapter 1, 2, 3, 4, or 5. Answer the opening case questions found at the end of section 1 and section 2 for the corresponding chapter. Be sure to list the chapter and the title of the case in your answer. Chapter 1 Apple-Merging Technology, Business, and Entertainment 1. What might have happened to Apple if its top executives had not supported investment in iPods? Apple was lacking creativity and innovation before the iPod came along.
Due to Porters’ Five Forces had they not introduced the iPod; rivalry amongst competitors would have allowed for Microsoft to introduce Zune first, and apple would not have the reputation it has now for portable music. The threat of new entrants could have also allowed for new companies to invent similar devices. 2. Formulate a strategy for how Apple can use efficiency IT metrics to improve business. Efficiency IT metrics are based on the technology itself.
Apple can improve its business by maintaining constant website availability and by keeping an optimal thoughput performance. The apple website is somewhat interactive, however most; if not all purchases are made thru iTunes. Apple can effectively improve efficiency by measuring web traffic, transaction speed and information accuracy on both Websites. This will ensure efficiency across the board. 3. Formulate a strategy for how Apple can use effectiveness IT metrics to improve its business. Effectiveness IT metrics measures how IT affects specific aspects of the business world.
Information Week, the business value of technology, states that some of the key elements used to improve problems with some of the Effectiveness IT Metrics are customer satisfaction, conversion rates, financial, missed opportunities, drop outs, and the ultimate test. Apple could launch a survey in an email blast to customers to measure customer satisfaction, drop-outs on new apps; the ultimate case could also be a part of the survey to find out if they would recommend the product to a friend. Financial effectiveness can be measured based on revenue exceeding operating cost.
Apple could also launch an internal survey for its customers to measure customer interactions, and possible missed opportunities based on call or customer volume in the store. 4. Why would it be unethical for Apple to sell its iTunes customer information to other businesses? Information is defined as date converted into a meaningful and useful context Baltzan Phillips (2009). Apple has a vast amount of information on all of its customers; this helps Apple to gain a comprehensive knowledge of factors affecting its business.
This information in invaluable to the company, Apple has a great reputation for being a name that user’s can trust. If they begin to sell user’s information it violate their user’s trust and simultaneously damage their reputation. 5. Evaluate the effects on Apple’s business if it failed to secure its customer information and all of it was accidentally posted to an anonymous website? The competitor’s of Apple such as Zune and many others have the technology but the one thing that is missing is the information needed to capture the Apple audience.
Apple uses business intelligence which is defined as applications and technologies that are used to gather, provide access to and analyze data and information to support decision-making efforts Baltzan and Phillips (2009). From a business strategy point of view security leads to increase in effectiveness metrics. The information Apple has o its customer base is valuable to their bottom line and in my opinion if the information fell into the wrong hands it could prove very detrimental to Apple. 6. Did Apple gain a competitive advantage from its decision to invest in an online music business?
A competitive advantage is a product or service that an organization’s customers place a greater value on than similar offerings from a competitor Baltzan and Phillips (2009). Apple has the best-designed hardware from an aesthetics point of view of any vendor. The company has first mover advantage. This occurs when an organization can significantly impact its market share by being first to market a product Baltzan and Phillips (2009). Investing in the online music business and being the first to introduce portable music brought Apple back to life and helped them to gain a competitive advantage.
It is amazing that, after several years, no one has been able to design a better hard-drive-based MP3 player than Apple did with the iPod. 7. How can Apple use environmental scanning to gain business intelligence? The acquisition and analysis of events and trends in the environment external to an organization defines environmental scanning Baltzan and Phillips (2009). Apple can use this application to gain business intelligence as they monitor how often they have to restock particular stores and what forms of marketing is being used in each area.
Once this information is compiled Apple could measure peak sales on particular products, strategic placement of the Apple brand and what forms of advertising would work best for each product to develop the perfect strategy to push each product in different regions throughout the country. 8. Using Porter’s Five Forces Model, analyze Apple’s buyer power and supplier power. The iPod is very popular and seems to be dominating the portable music industry making Apple’s buyer power relatively low. With apple having iTunes as the preferred source of purchasing music has helped to make it the most popular legal music download service.
It does seem as though Apple’s supplier power would be very high, there seems to be a vast majority of places to purchase raw materials to create circuits ect. The only change I could foresee in Apples supplier power is of specialty materials needed for new and advanced developing technology. In this instance the supplier power would be low and the cost develop the product would be passed on to Apple’s customers thru differentiation. 9. Which of the three generic strategies is Apple following? There are three generic strategies; broad cost leadership and broad differentiation that reach a large market segment.
Then there are focused strategies that target a niche market. Apple targets the mass market with its iPhone and iPod products, but combines this broad scope with a differentiation strategy based on design, branding and user experience that enables it to charge a price premium due to the perceived unavailability of close substitutes. From my evaluation Apple has a broad differentiation strategy. 10. Which of porters Five Forces did Apple address through its introduction of the iPhone? To reduce buyer power and create a competitive advantage an organization must make it more attractive for customers to buy from it nstead of its competition Baltzan and Phillips (2009). Apple focuses on how the iPhone will make your life easier and better. Apple effectively built a lifestyle choice surrounded around the use of the iPhone which has kept consumer’s buyer power very low. 2. 75 Points You are working for Apple as the VP of operations. The founder – Steve Jobs – has asked you to rank the ilities for the Apple iPad from most important to least important. Be sure to provide your justification for each ilitie so Mr. Jobs can understand the logic behind your ranking.
Please be sure to read chapter 5 for an overview of the ilities. Infrastructure architecture according to Baltzan and Phillips (2009), includes the hardware, software, and telecommunications equipment that, when combined, provides the underlying foundation to support the organizations goals. There are seven IT infrastructure qualities “ilities” that measure the solid infrastructure of technology. These seven ilities are flexibility, scalability, reliability, availability, accessibility, and performance. In will rank these ilities in order of most important to lease important for the Apple iPad. 1.
Scalability refers to how well a system can adapt to increased demands Baltzan and Phillips (2009). The iPad is a very innovative and high demand product. Performing a capacity plan which helps to determine future IT infrastructure requirement for new equipment, is on way to ensure that IT infrastructure is scalable. It is also cheaper for Apple to implement an IT infrastructure that considers growth, than to launch and try to upgrade equipment later. 2. Performance measures how quickly a system performs a certain process or transaction (in terms of efficiency IT metrics of both speed and throughput).
If the iPad does not have enough performance capacity this will have devastating, negative impact on Apple’ reputation and its ability to generate new sales. 3. Flexibility systems must be flexible enough to meet the demanding need of ever growing business changes. The iPad could grow to be the link for major companies to do business and communicate. It could eliminate desktops, laptops act. Apple as a company must be able to offer the same dependable service as other comparable systems with the sleek and freshness of Apple to stay competitive. 4. Availability addresses when systems can be accessed by users.
The iPad must keep a high availability this refers to a system or component that is continuously operational for a desirably long length of time. Although most systems do have downtimes for upgrades, maintenance, and fixes. The iPad does ask you to upgrade and does not have any mandatory downtime which is a great thing, however when system’s such as AMSI, a software system used to monitor apartment community rents are downloaded to the device, the iPad should also have enough space for a redundant system. 5. Reliability coming in ensures all systems are functioning correctly.
Although for the most part the iPad is a portable desktop, let just say for instance if there is a system function that does not support certain search engines or when a user is searching for something the iPad in error continues to show the incorrect answer. Apple would be placing the company at risk if the iPad provided unreliable information for its users. 3. 75 Points One of your good friends – Debbie – has just won the lottery!! Debbie has decided to invest the money in a startup business to provide music and movies online over the Internet and is wondering if you think this is a good investment of the winnings.
Using the Porter Five Forces model, analyze this business opportunity and give Debbie your best advice. Be sure to explain how each force impacts her business. Porters five forces model is a useful tool to aid organizations facing the challenging decision of entering a new industry Baltzan and Phillips (2009). There are numerous places to purchase music and video online the buyer power will be very high, meaning that customers will have several choices to choose from. For music there is iTunes, amazonmp3, mindam, emusic ect. A few lace’s that a person could purchase movies online would be, hulu, iTunes, cinema now resnet ect. Most of these websites offer both services. Analyzing supplier power in the online music and video market it seems to be very low. According to Baltzan and Phillips (2009) supplier power is low when buyers have many choices. This is a great thing for this industry because once the website is approved and contracts are signed thru the major record labels and movie studios unlimited access to all new and old music and video will be at your fingertips.
As a company keeping supplier power low for the organization but high for your customers is the desired outcome. Meaning that you keep you costs low by having many choices but keep loyal customers by them not having many choices on where to buy music and videos. Unfortunately in this industry organization to customer buyer power is low and they have many choices to purchase music and video. When it comes to technology there will always be a threat of substitute products and/or services.
One that comes to mind with videos is Napster, a lot of people like paying on flat fee monthly to watch movies they are interested in seeing without paying each time. Lime wire which has most recently been shut down was a file sharing site that would allow music lovers to share music for free. These types of options prove that substitute products are high in the music and video download industry. It seems that threat of new entry is very high, which means that it is very easy for new competitors to enter a market and low when there are significant entry barriers.
There are a vast amount of entry barriers when getting into music and video downloads, there must be some type of music and video sorter. The website must be user friendly and PDA accessible. There competition is fierce when it comes to rivalry amongst competitors. ITunes is one to be reckoned with. They are the preferred supplier of music and video downloads for all Apple products. The audience reaches very far and there prices have managed to stay competitive. This company has teamed up even with some banks.
I was offered ten dollars I free downloads to open a Fifth Third Bank account. ITunes who has managed to gain a very large market share in this industry I see it being very difficult to compete in this organization. Rivalry is high, the threat if new entry is high, substitute products are high, organization to customer supplier power is low and buyer power is high. After careful evaluation of the industry, unless you have something new and innovative to offer you clients other than access to music and downloads, I could not recommend Debbi that you invest in the startup business.