Apple Inc.: Product Portfolio Analysis
Mallin, Michael L., Finkle, Todd A., Journal of the International Academy for Case Studies
CASE OVERVIEW AND RECOMMENDATIONS FOR TEACHING APPROACHES
Students will find the case very interesting and relevant as most of them will have used at least one of Apple's products or a similar product offered by an Apple competitor. Students will combine the facts presented in the case with their own perceptions and experiences with Apple's products to answer the discussion questions. The case enables students to analyze some basic financial data (e.g., company market share and industry demand forecasts) to identify how each of the Apple product lines (reviewed in the case) fit and are classified within the BCG growthshare matrix (also reviewed in the case). Case discussion questions will then allow the student to identify other marketing factors (e.g., competitor, demand, trends, etc.) that could cause Apple products to be reclassified. The case promotes critical and strategic thinking in that students will be required to make judgments as to how they would decide the future of such Apple products as lines of personal computers, iPod, and iPhone. A unique aspect of this case is that Apple products are so ubiquitous that most students will have experienced the technological innovativeness of the company through personal ownership of an Apple product (or a similar competing company product). This aspect should make the case both relevant and interesting to students.
An approach for teaching this case could require students to read and prepare responses to the case discussion questions via a homework assignment and the class period could be devoted to an instructor led discussion of all of the questions. An alternative approach may include dividing the class into teams or small groups. Each group could address the following discussion questions relative to one Apple product line (e.g., group 1 = iMAC desktop computer, group 2 = iBook portable computer, group 3 = iPod, group 4 = iPhone). Class time could be divided to allow discussion of the questions (within the groups) followed by an instructor facilitated "readout" from each group or group representative. This would allow all students in the class to reap the benefits from the individual group discussions and offer additional comment or insight.
DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
1. How would you classify each of the Apple product lines (desktop computers, portable computers, iPod, and iPhone) according to the BCG Growth-Share Matrix (star, question-mark, cash-cow, or dog). Justify why you placed each product line in its class.
The BCG Growth/Share matrix is a product portfolio analysis tool that enables firms to classify all of their product lines in a 2 x 2 matrix according to the dimensions; relative market share and market growth rate.
The dimension of relative market share (horizontal axis) is defined by the product line's market share as compared to its largest competitor in the industry. Market growth rate (vertical axis) is a measure of how attractive a particular market is to the firm and is quantified by the annual growth rate (usually expressed as percent growth) for that product line. Given the estimates of relative market share (low-high) and its market growth rate (low-high), a product line can be categorized in one of the four cells illustratively named for the amount of resources generated from and requires from the firm (Grewal and Levy 2010).
Using the data from the tables provided in the case (see Exhibits 2 and 3 below), the Apple product lines can be classified as: desktop computers--dog, portable computers question mark, iPhone--question mark, iPod--cash cow (see Figure 1 below).
The justification for each of the classification was as follows:
The iMAC desktop computer was classified as a "Dog" due to its low relative market share (8.8%) as compared to the industry leader which was Dell (26.2%) and the low market forecast calling for a decline of over 20%. …