Chapter 4 Hardware and Software - Case & Exercise Jason C. H. Chen, Ph.D. Professor of MIS School of Business Gonzaga University Spokane, WA 99258 USA chen@jepson.gonzaga.edu

In-class exercise UYK (p.135) 1. Suppose that your roommate, a political science major, asks you to help her purchase a new laptop computer. She wants to use the computer for email, Internet access, and for note-taking in class. She wants to spend less than $1,000.

a) What CPU, memory, and disk specification do you recommend? I suggest a lower-end Pentium dual core CPU with a speed around 1.5 GHz; 2 GB of RAM, and an 80 GB hard drive.   b) What software does she need? An operating system (Windows 7 Home Premium), a Web browser (Internet Explorer or Firefox), email, such as Outlook or Thunderbird, and a word processor such as Word or a note-taking product such as One Note.

c) Shop Dell, HP, and Lenovo for the best computer deal. Dell offers an Inspiron 1520 at $893. HP offers a Presario C700T for $645 (but this option is limited to a maximum 1 GB of RAM). Lenovo offers a ThinkPad R61i for $904.   d) Which computer would you recommend, and why? I recommend either the Dell or the ThinkPad. Currently, there is a delay of 3–4 weeks for the ThinkPad, whereas the Dell is available, so I would lean toward the Dell.

Case Study 4: The Apple of Your i (p.137-139) ALL GROUPS Tripled its market in three years Second largest public company in world Apple pioneered well-engineered home computers and innovative interfaces for students and knowledge workers. Every sales success feeds other sales successes.

1. Which of Porter’s four competitive strategies does Apple have 1. Which of Porter’s four competitive strategies does Apple have? Explain your answer.   Apple is pursuing a focused differentiation strategy. It is focused primarily on the mobile computing device market and is differentiating itself through its incredible engineering and huge array of applications for its devices.

Fig 3-4: Porter’s Four Competitive Strategies To be effective, organization goals, objectives, culture, and activities must be consistent with organization strategy.

2. What do you think are the three most important factors in Apple’s incredible success? Justify your answer.   Apple has demonstrated a capability of creating innovative new products successfully. Apple has also been able to keep that stream of innovations going and to enable the innovations to play off of each other. A culture that encourages and supports these engineering successes is obvious. Apple also has developed an ability to sell and market its new products successfully.

3. Steve Jobs passed away in the Fall of 2011 3. Steve Jobs passed away in the Fall of 2011. Until his death, he had been the heart and soul of Apple’s innovation. Today, 35,000 Apple employees continue onward in his absence. A huge question to many investors is whether the company can be successful without him. What is your opinion? What role did he play? How can Apple respond to his loss? Would you be willing to invest in Apple without his leadership? Why or why not?   Jobs had a very hands-on involvement in the business. He was the company’s chief innovator. Of course he didn’t do it all alone, but he seemed to set the direction for the business in a very effective way. He had the ability to be visionary and send his company’s engineers out to conquer challenges that paid off in big ways. The company then also had the ability to develop support systems for the new innovations.

3. (cont.) Another capability was to recover and move on from product failures, which Apple had its share of as well. Can this company continue its progress without Jobs? Obviously, only time will tell. Some students may feel that Apple will be unable to sustain its success without the unique vision and leadership style of Jobs and would therefore be unwilling to invest in Apple. Other students may feel that Apple’s executives have been hand-picked and mentored by Jobs and are therefore capable of continuing to lead Apple effectively. There is no question that Apple will be a different place without Jobs’ influence, but it is not necessarily doomed.

Here is a list of a few ideas to get the discussion rolling: 4. Microsoft took an early lead in the development of slate devices (like the iPad), and it had the world’s leading operating system and applications for over 20 years. Provide five reasons why Microsoft was not able to achieve the same success that Apple has. Most industry analyst would agree that the skills and abilities of Microsoft’s 88,000 employees are as good, on average, as Apple’s..   Here is a list of a few ideas to get the discussion rolling: Lack of a visionary leader since Gates has departed. Very diffuse focus – many market niches pursued simultaneously. Emphasis on acquiring new technologies rather than in-house development Strategy of maintaining edge through strategic manipulation rather than product enhancement Few products that are truly amazing, must-have products

5. Considering your answers to the four questions above, if you had a spare $5,000 in your portfolio and wanted to buy an equity stock with it, would you buy AAPL (Apple)? Why or why not?   Students will have different opinions on this. I would be sure to ask those who want to jump on board the Apple bandwagon several questions, including: Is it the best strategy to buy a stock with the price at record highs? Are you concerned about the loss of Steve Jobs? How do you feel about the company’s ability to keep producing technical winners?