CASE STUDY ASSIGNMENT TEMPLATE - PAGE 1

COIT20228 CASE STUDY SUBMISSION TEMPLATE

Due date: Tuesday Week 10 (2PM AEST)
Part: Case Study assignment 2
Weighting: 35% of total assessment.
Submission: Electronic (see course website for details)

Instructions
This Microsoft Word template should be used as instructed in the Assignment Two
Case Study PDF, which is available from the course website.
Please ensure you reference any materials you use to complete this assignment.
DO NOT copy content directly from either the text or Internet resources: this
assignment is to be in your own words.
Please complete your assignment using this submission template file, inserting your
answer beneath each question.

Please fill in the following details:
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The questions are listed on the next page. They are all on one page for convenience only.
You can add more pages in order to complete your answers.


















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Q.1 the business models of Google, Apple, and Microsoft are described as they were about
5 years ago 2009-10. Contrast their business models and comment on their strengths
and weaknesses in the light of todays marketplace. Explain your reasoning, using
examples where appropriate.

Since last one decade it is clear that Microsoft, Google and Apple have clear domination on
the technological landscape. When these companies started at different times, they had their
own distinct character and way of doing business. Over a period of time the way these three
companies are operating, it can be said that each of these companies are clearly crossing each
others path. Interesting fact about these companies is that, at some time or other these
companies have collaborated with each other. Despite of having distinct character, there is
fierce competition among them to dominate the technological landscape.

Apple as a company is predominantly a hardware company. Surprisingly Apple which was
founded in April1976 today earns majority of its revenue from products which were
launched just seven years ago, that is iPhone and iPad. This can be understood by the fact,
that 55% of Apples revenue is generated by sale of iPhone. Similarly iPad contributes to
18% sales of Apples revenue. Apple has over a period of time created its own ecosystem of
software and services such as iTunes application store. It can be said, that Apples ecosystem
is a tightly integrated in nature, which means, that in order to use Apple services, and one has
to buy an Apple device (Afuah, 2014). This is a strategic move by Apple which is often
criticized by public. But this has also resulted in creation of a dedicated and loyal customer
base for Apple. Since last seven-eight years Apple has clearly transformed its business from
Desktop to mobility devices such as iPhones, iPad and iPod. Major strength of Apple is its,
strong brand value. Today it is considered for its premium products and exclusivity factor.
This is one major reason why people aspire for buying an Apple product, however Apples
major weakness is that its dependency purely on hardware business, with a small fraction of
revenue coming from internet based source such as iTunes. With mobility market saturating
fast, there is strong need of transformation of business to next level, in order to compete with
company like Google.

Googles rapid surge on technological landscape has been swift and has taken everyone by
surprise. Surprisingly not long ago in 2011 advertising contributed to 97% of Googles
overall revenue, although unlike any other company, advantage with Google is that it is the
market leader in search engine segment with almost a virtual monopoly. Google has now
positioned itself as a company which is cleverly using its dominance in search engine to
expand its base in other sector (Kindstrm and Kowalkowski, 2014, pp. 96-111). Google few years
back acquired Motorola mobility (which now has been sold to Lenovo) in order to strengthen
its foothold in hardware market. Google also has its range of mobile devices which are hugely
popular among people, but that is just a tiny fraction of Googles revenue stream. In fact for
Google hardware is and will never be a source for revenue, as Google views hardware as a
medium to expand its services. Compared to Microsoft and Apple, Google surely has an edge
in terms of market position and is positioned in such a way, that it can clearly dominate the
technology landscape for next few years.

Microsoft on other hand is majorly dependent on its commercial licensing business. More
than 50% of its business comes from sale of Windows Operating system, and Microsoft
Office product suite. Microsoft has not much in the hardware segment, although it does have
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product like XBOX, but compared to Apple, Microsoft cannot be compared to in terms of
hardware business. One major weakness of Microsoft is its dependency on business from
licensing of operating system and other software. Even though Microsoft tried challenging
Googles dominance in search engine through its Bing search engine, but it failed. Major
strength of Microsoft is its complete dominance in operating system segment. Today more
than 85-90% computers run on Windows (Afuah, 2014). Overall it can be said, that all three
companies today are placed in a strategic position.
Q.2 given your research into disruptive technologies or trends in the first assignment, how
will these impact the three large companies and their current business models?

Information technology segment has reached in a very interesting phase since last five years.
Industry every year witnesses some or the other innovation in terms of new software of
mobile application. No one thought 4-5 years back that Facebook will become one of the
biggest information technology companies just on the basis of social networking application.
Similarly no one imagined that a simple messenger application such as Whtsapp will be
bought by Facebook after paying $19 billion. Point to be understood is, that rapid pace of
innovation has completely changed the dynamics of the industry today. In this context it
becomes important to analyse the concept of disruptive technologies. This type of technology
can be defined as a technology which comes as a sudden surprise in the industry and replaces
an already existing technology. Disruptive technologies are considered to be path breaking in
nature (Christensen and Bower, 2014).

If we consider Google, Microsoft and Apple, then it can be clearly said that Google leads in
its approach of handling disruptive technologies. Google has always focused on innovating
new products and application. One major example is Google Glass, no one would have
thought of such products five years back, but today Google Glass is a reality, similarity self-
driven car with no drivers, or providing internet services through hot air balloon. All these are
such technologies which will eventually change the face of technology sector. Google has
clear edge over other companies as it has open system which where both software and
hardware can be easily integrated not only by Google but other companies as well, which in
case of Apple is just opposite (Armbrust et al, 2010, pp.50-58).

Apple and Microsoft when compared to Google are not placed in a strategic position in terms
of disruptive technology. Apples focus remains on its hardware business where it keeps
launching a new iteration of existing product (Bergvall-Kreborn & Howcroft, 2013, pp. 280-
289). On other hand Microsoft continues to focus on its operating system business, even
though Microsoft has started focusing on other segments such as cloud computing and cloud
based services, but it has clearly lost a first mover advantage which a company like Google
has (Reinhardt and Gurtner, 2014). Major aspect which needs to be highlighted is that these
three companies have enough cash today to acquire any other small company. For example, if
Google considers a company as a promising in terms of new innovation it can easily acquire
that company by paying a certain premium. Hence it can be said, that even in case if these
companies are not able to innovate like start-ups but they are capable of acquiring any
company which is focusing on disruptive technology.




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Q.3 Describe the mobile platform offerings of Google, Apple, and Microsoft as described
in the case and use current literature to bring them up to date. Which company do you
think is going ahead of its rivals and why? Explain your reasoning.

No one has imagined 10 years back that mobile device such as smart phones and tablets will
become the next battleground for companies like Apple, Microsoft, Google, Samsung and
Lenovo. Truth is that as per IDCs report 70% of smart connected devices will be captured by
mobile devices such as smart phones by 2017 (Roberts, 2014). This clearly indicates towards
the fact that over a period of time business from desktop and personal computing devices such
as laptop will definitely drop significantly.

Based on case study, it can be said that Google has already devised its strategy related to
mobile platform. This can be understood by the example that more than 80% of smart phones
today run on Android-mobile operating system owned by Google (Holzer & Ondrus , 2011,
pp. 22-31)This not only consolidates Googles position in mobile OS market, but it also gives
Google a clear edge over its rivals when it comes to integration of Google services on mobile
devices. Since Google owns applications like YouTube etc, it can push these services on as
many smart phones as possible, and can generate revenue through advertising in these
applications. One important fact which Google has stressed on time and again is revenue
from hardware segment. Google clearly knows that revenue generated from hardware such as
Nexus range of mobility devices will be just a fraction of what will be generated from
revenues from advertising. Due to its openness of Android, today any one can develop,
publish and monetize mobile applications (Bresnahan & Greenstein, 2014, pp.475-480).

On other hand, Apple does not seem to be bothered too much by threat of Window Operating
system of Android. It seems to be happy in its tightly integrated mobile platform. As
discussed earlier, in order to use Apple services one has to purchase an Apple device, which
at times might be counterproductive strategy for the company (Goadrich & Rogers, 2011, pp.
607-612). Apple serves its customer through its iTunes store on which a customer can explore
and download mobile applications. Issue with Apples mobile platform offering is that it is
closely integrated only with Apple device which prevents any other manufacturer from using
the platform. In long run this might prove to be detrimental to Apples mobile platform
business.

Microsoft is clearly catching up with Google with its mobile platform strategy. Microsoft has
made its intention clear with acquisition of Nokia. This clearly underlines the fact that
Microsoft has realised the importance of mobility in coming future. Unlike Google Microsoft
can be termed as late entrant in mobile segment, but it surely has indicated that it cannot be
ignored (Ali-Yrkk et al, 2013, p.16). With gradual rise in users of Windows Mobile
operating system, people have realised that there is third alternative to Android and Apples
iOS. Microsoft can use this fact to further strengthen its position. Considering the fact that it
has acquired iconic Nokia brand, it has clear advantage in mobile device segment provided
that it integrates the hardware business strategically with software.




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Q.4 In your considered view, are mobile wireless technologies disruptive, or no longer
disruptive, or does it still have some way to go in deeply affecting business and society?
Explain your reasoning, using literature and examples to back up your points.

As discussed in previous section, disruptive technologies are the ones which are capable of
completely changing the technology segment. It brings something completely new which
market has never seen previously. In this context mobile technologies can definitely be
termed as disruptive in nature (Bowonder et al, 2010, pp, 19-32). Initially invention of mobile
device itself was a disruption for then existing landlines phones and cordless telephones; even
though over a period of time people might assume that mobile wireless technologies might
have saturated in terms of innovation and no longer can be termed as disruptive in nature.
This thought process is completely wrong. Next wave of disruptive technologies are already
originating through mobility devices. This can be understood by example of Whtsapp or
Twitter which are predominantly mobile based application. These technologies have been
impacting both business as well as society in both positive as well negative senses. For
example people today are addicted to applications like Facebook to an extent that it has
become problematic in nature. Last year when riots broke in London, then rioters used
application such as Whtsapp to organise themselves and destroy properties. Similarly there
have been many instances of positive use of disruptive technologies as well. For example,
small business who cannot afford big budgets for their marketing campaign can use several
applications such as Twitter and Facebook to promote their business free of cost.

Companies like Admob which focuses on creation of mobile advertising banners, was
eventually acquired by Google. This underlines the fact that how companies are taking mobile
platform seriously, and accordingly positioning themselves to take advantage of the situation.

Smart phones have essentially become a part of everybodys life today. This directly
translates into the fact that companies like Google have readymade set of user base to which it
can push it services without being intrusive in nature. All the companies such as Google,
Apple and Microsoft have realised that next generation of services will be focused on
mobility that is why they have been focusing on building up their mobility platform in such a
way that it can take advantage of disruptive nature of mobile technologies. With improvement
of in network speeds and launch of networks such as 3G and 4G, data speed on mobile
devices is no constraint today. In such situation disruptive nature of mobile technology is like
a win-win situation for both customers as well as companies which are focusing on it.







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References

Afuah, A. 2014. Business Model Innovation: Concepts, Analysis, and Cases. Routledge.
Ali-Yrkk, J., Kalm, M., Pajarinen, M., Rouvinen, P., Seppl, T., & Tahvanainen, A. J.
2013. Microsoft Acquires Nokia: Implications for the Two Companies and
Finland. ETLA Brief, 16.
Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R., Konwinski, A & Zaharia, M.
2010. A view of cloud computing. Communications of the ACM, 53(4), 50-58.
Bergvall-Kreborn, B., & Howcroft, D. 2013. The Apple business model: Crowdsourcing
mobile applications. In Accounting Forum (Vol. 37, No. 4, pp. 280-289). Elsevier.
Bowonder, B., Dambal, A., Kumar, S., & Shirodkar, A. 2010. Innovation strategies for
creating competitive advantage. Research-technology management, 53(3), 19-32.
Bresnahan, T., & Greenstein, S. 2014. Mobile Computing: The Next Platform Rivalry. The
American Economic Review, 104(5), 475-480.
Christensen, C. M., & Bower, J. L. 2014. Disruptive technologies: catching the
wave. Harvard Business Review.
Goadrich, M. H., & Rogers, M. P. 2011. Smart smartphone development: iOS versus android.
In Proceedings of the 42nd ACM technical symposium on Computer science
education (pp. 607-612). ACM.
Holzer, A., & Ondrus, J. 2011. Mobile application market: A developers perspective.
Telematics and informatics, 28(1), 22-31.
Kindstrm, D., & Kowalkowski, C. 2014. Service innovation in product-centric firms: a
multidimensional business model perspective. Journal of Business & Industrial
Marketing, 29(2), 96-111.
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Reinhardt, R., & Gurtner, S. 2014. Differences between early adopters of disruptive and
sustaining innovations. Journal of Business Research.
Roberts, J. R. 2014. Mobile Tech Report 2014: Technology news from 2013 and predictions
and insights about 2014. Mindwarm Incorporated.