Case Notes/Answers
Apple Inc. in 2015 By David Yoffie, Eric Baldwin
Discussion Questions:
1. What, historically, have been Apple’s competitive advantages?
2. Analyze the personal computer industry. Why did Apple struggle historically in PCs?
3. How sustainable is Apple’s competitive position in smartphones?
4. Evaluate Apple’s strategy for Apple Watch. Has Tim Cook taken the right approach? Would you
suggest any course corrections?
, 5 -7 1 5 -4 6 8
JUNE 17, 2015
TEACHING NOTE
Apple Inc. in 2015
Apple Inc. has been an icon in American industry over the last three decades, named the number
one “world’s most admired company” by Fortune each year since 2008. The Apple brand name has
become synonymous with innovation. CEO Steve Jobs did a remarkable job turning around a
company that was near bankruptcy in 1996. As the name change from “Apple Computer” to “Apple
Inc.” in 2007 suggests, Apple was no longer just a computer company. Both revenue and net income
have soared in recent years, thanks largely to the iPhone. Apple’s share price has outperformed the
S&P 500 index by nearly ten-fold. Few will disagree about Apple’s spectacular accomplishments.
Now, as of 2015, the case poses the question of how sustainable Apple’s position is in its various
product markets—personal computers (PCs), digital music, smartphones, tablets, smart watches and
Apple Pay. The case examines the structure of the PC business, Apple’s historical position within that
industry, and the role of the iPod, iPhone, iPad, Apple Watch and Apple Pay in Apple’s overall
strategy. The tragic death of Jobs in October 2011 poses a final question in the case about whether
Tim Cook would be able to replicate Jobs’s success with the Apple Watch.
The primary objective of the case is to introduce industry analysis, competitive positioning, and
sustainability analysis. In exploring the choices that Apple’s leaders, most notably Steve Jobs, have
made, the case confronts four central issues in strategy formulation:
1. The evolution of industry structure over time and its implications for strategic positioning
2. The nature of sustainable competitive advantage
3. The timing of strategic moves
4. The challenge of reinvigorating competitive advantage through innovation
In addition, this case can serve as a vehicle to examine the role of technology standards in
competitive strategy. Apple took a proprietary standards approach while its competitors in the PC
industry embraced open standards. Such choices had dramatic implications for the structure of the
industry and for the long-run viability of the firms. A critical question for Apple, at every stage of its
history, has been whether there is enough room in its industry for more than one standard to exist.
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Feb 2025. Copying or posting is an infringement of copyright.
or 617.783.7860.
Apple Inc. in 2015 By David Yoffie, Eric Baldwin
Discussion Questions:
1. What, historically, have been Apple’s competitive advantages?
2. Analyze the personal computer industry. Why did Apple struggle historically in PCs?
3. How sustainable is Apple’s competitive position in smartphones?
4. Evaluate Apple’s strategy for Apple Watch. Has Tim Cook taken the right approach? Would you
suggest any course corrections?
, 5 -7 1 5 -4 6 8
JUNE 17, 2015
TEACHING NOTE
Apple Inc. in 2015
Apple Inc. has been an icon in American industry over the last three decades, named the number
one “world’s most admired company” by Fortune each year since 2008. The Apple brand name has
become synonymous with innovation. CEO Steve Jobs did a remarkable job turning around a
company that was near bankruptcy in 1996. As the name change from “Apple Computer” to “Apple
Inc.” in 2007 suggests, Apple was no longer just a computer company. Both revenue and net income
have soared in recent years, thanks largely to the iPhone. Apple’s share price has outperformed the
S&P 500 index by nearly ten-fold. Few will disagree about Apple’s spectacular accomplishments.
Now, as of 2015, the case poses the question of how sustainable Apple’s position is in its various
product markets—personal computers (PCs), digital music, smartphones, tablets, smart watches and
Apple Pay. The case examines the structure of the PC business, Apple’s historical position within that
industry, and the role of the iPod, iPhone, iPad, Apple Watch and Apple Pay in Apple’s overall
strategy. The tragic death of Jobs in October 2011 poses a final question in the case about whether
Tim Cook would be able to replicate Jobs’s success with the Apple Watch.
The primary objective of the case is to introduce industry analysis, competitive positioning, and
sustainability analysis. In exploring the choices that Apple’s leaders, most notably Steve Jobs, have
made, the case confronts four central issues in strategy formulation:
1. The evolution of industry structure over time and its implications for strategic positioning
2. The nature of sustainable competitive advantage
3. The timing of strategic moves
4. The challenge of reinvigorating competitive advantage through innovation
In addition, this case can serve as a vehicle to examine the role of technology standards in
competitive strategy. Apple took a proprietary standards approach while its competitors in the PC
industry embraced open standards. Such choices had dramatic implications for the structure of the
industry and for the long-run viability of the firms. A critical question for Apple, at every stage of its
history, has been whether there is enough room in its industry for more than one standard to exist.
This Teaching Note is authorized for use only by ELENA PIKULINA, University of British Columbia until Feb 2025. Copying or posting is an infringement of copyright.
or 617.783.7860.
