Apple is already one of the largest companies in the world, and although they only offer relatively few products, the size of the company has grown tremendously. Apple’s innovation and superior aesthetics make it one of the world’s most powerful brands, and these powerful products and ‘first-off status’ allow Apple to establish a competitive advantage.
Brands as powerful as Apple require years of hard work, impeccable design and many other factors. Compared with other companies, every time Apple releases a mobile phone, it generates more hype, more leaks, and more interest.
This is a kind of loyalty that requires years of hard work and impeccable execution.
Apple has built a very strong brand loyalty through years of ingenious innovation, design and marketing. When low-cost competitors followed Apple into the portable smartphone market, quality and brand awareness became the most important weapon to protect Apple’s sales and profits.
Only Apple devices run iOS. This means that if customers want to stay within the Apple eco-chain, they must continue to purchase iOS devices.
As iPhone sales continue to grow, more new users will be “locked” in the closed ecosystem of Apple. For this reason alone, its valuation has soared.
Every Apple product complements (competes) and complements each other. From hardware to software, control of the entire user experience or process can enhance customer loyalty and provide lock-in. Apple also has a so-called walled garden with its own operating system, customer support and market, all of which are sufficiently restrictive to maintain a more dedicated user base and facilitate the sale of value-added services.
Apple University, which records Apple’s special ways for employees to ensure that employees consider non-Apple perspectives, helps them to think critically and remain open to new ideas.
Steve Jobs spent a considerable amount of time planning the campus (office location). Cook, who continued the project, said that Apple’s new home would not be like a skyscraper. ‘It shouldn’t be a place that won’t open your creative juice.’
Apple has been very concerned about how people buy their products. Apple has invested heavily in controlling its retail experience, they also have direct conversations with customers and prospects. These data are invaluable to Apple because they consider the future needs of customers and how their products can help solve current and future consumer issues.
These points are the chips of Apple’s own sustainable competitive advantage. These advantages enable a company to maintain a high level of return on investment over time, and these factors create barriers for new entrants and limit the ability of other competitors to accumulate market share.
Now, let’s talk about Jobs.
For Apple, Jobs is the undisputed soul. This role cannot be replaced in terms of inspiring the creativity of geniuses, personalizing consumer perceptions, and enhancing market confidence.
The way Jobs gives Apple a sustainable competitive advantage is to engrave Apple’s bone marrow. I am pessimistic at this point because a system of thinking ability cannot replace the existence of a genius. Moreover, the current CEO Cook, he behaves more like a coach who trusts his players, not a planner who manipulates like Jobs. Although the top management has developed a long-term strategy, the strategy needs to be randomly changed. Now Apple’s advantage is still higher than other companies, but the competitive advantage will eventually weaken over time. In recent years, we can observe that the gap between Apple and competitors in product design is shrinking little by little. Its sustainability advantage seems to begin to shrink.
In my opinion, Apple’s competitive advantage is still quite large after Steve Job leave. Apple, under the leadership of Tim Cook, had low tide, but was still moving in a good direction. Cook is more sophisticated in his monopoly and has the ability to lead the Apple Empire to expand rapidly. Apple share price has soared, and its market capitalization is more than twice that of ExxonMobil or Microsoft. He can maintain Apple’s sustainable competitive advantage in the past few years, but it can be maintained in the short term and does not mean the same in the medium and long-term.
The competitive advantage should be like a stool. The more advantages Apple has in its tool belt, the more difficult it is to eliminate its overall sustainable competitive advantage. But Apple exists in a highly competitive environment in which aesthetics will eventually be replicated. Failure to completely change the new market will eventually lead to a decline in profit margins and erosion of the moat.
Apple’s beautiful operating system is no longer rare. Apple has succeeded because Android is not intuitive or clean in history, but the situation is getting less and less. This is a serious threat to Apple. However, Android phones take a while to shake their reputation, and once they do, Apple’s advantage will disappear.
Apple relying too much on the iPhone, accounted for nearly 70% of Apple’s revenue in the previous quarter. If the competition or market saturation causes iPhone sales to decline, then Apple will be hit hard. It seems that Apple’s sustainable competitive advantage will gradually shrink until it breaks through the bottleneck or develops new products.
Apple is a big company, but its advantages are not so obvious now. For a long time, Apple has created an isolated, differentiated ecosystem and a strong quality brand. These things bring a competitive advantage, but they are beginning to get eroded. Maintaining this competitive advantage will be key to maintaining its position in the high-end smartphone market. Obviously, Apple is facing this challenge now.
At present, Apple certainly has a competitive advantage, but the sustainability of this advantage has serious problems. The sustainable competitive advantage that Apple enjoys after launching the iPhone is rapidly disappearing. All eyes should be on its next software update. I think they are doing something. What is this matter, when it is released, and what value is unknown. We may be looking forward to Apple’s transformation.