Summary Strategic Management Essay Example | Topics and Well Written Essays - 500 words

Summary Strategic Management - Essay Example Good product design and ease of use created an emotional connection with users, while technological innovation that encrypted songs and prevented these from being shared for free in violation of copyright laws created a mutually beneficial link with suppliers, the record companies that are losing revenues to piracy. Although Apple was not the first MP3 player in the market, it dominated the business because its products looked better and were easy to use. The decision to work with record companies was a strategic move that also resulted in cost leadership as it cut off distributors and retailers and their high mark-ups from the value chain (see Exhibit 3 of the case study). After the success of Apple, other companies are competing by copying what Apple did: good design, diversity of products such as including them in mobile phones, and lower prices for the music players and song downloads. However, Apple has two advantages difficult to imitate and are therefore sources of competitive advantage. The first is its brand name, which is always associated with products that are well-designed, easy to use, and that easily develops an emotional attachment to a growing base of loyal customers. The second is its track record at innovation, which gives the company a first-mover advantage that allows it to charge high prices for new products, recover the investment fast from profits, and as competitors move into the market, to launch a price war that continues earning profits that could be invested in developing the next product. Given these resources, should Apple develop a product combining a mobile phone and an iPod? (Yes, it did.) The strategic management issue facing Wal-Mart is how it can grow in the face of slow domestic (U.S.) growth, fierce domestic (Costco) and international (Tesco, etc.) competition, lack of experience in international markets, and growing