Page 126 - NITI - Navigating Indian Traditions in Industry

PESTEL Analysis (Political, Economic, Social, Technological, Environmental, and
Legal factors): Apple’s foresight can also be tied to a comprehensive PESTEL analysis.
They understood the technological trends of touchscreens, the economic shifts toward
mobile computing, and the social desire for multi-functional devices that were user-
friendly. Apple predicted how mobile phones would evolve into mini-computers, which
aligned with Sutra’s concept of anticipating competitors’ moves and positioning itself
at the cutting edge.

2. Porter’s Five Forces:

Michael Porter’s Five Forces model helps to understand the competitive pressures
in an industry. Apple’s entry into the smartphone market shows a clear example of
analyzing the bargaining power of suppliers, the bargaining power of buyers, the
threat of new entrants, the threat of substitute products, and industry rivalry.

Apple anticipated that the traditional players (Nokia, Motorola, BlackBerry) were not
prepared for the rapid shift in consumer expectations. By using these insights, Apple
launched the iPhone with a unique value proposition that disrupted the market, which
exemplifies Sutra’s principle of understanding and outmaneuvering competitors.

3. Blue Ocean Strategy:
The Blue Ocean Strategy, developed by W. Chan Kim and Renée Mauborgne,
suggests that companies should seek to create new markets (or “blue oceans”) rather
than compete in existing, saturated markets (“red oceans”). Apple’s iPhone launch
exemplifies this approach. Rather than trying to improve existing mobile phones,
Apple created an entirely new category of smartphones with a more advanced user
interface, multimedia capabilities, and an integrated ecosystem. This strategic move
is rooted in Sutra’s foresight, where Apple anticipated a market shift and positioned
itself as the leader in a new, emerging market.

4. Innovation and Disruption Theory (Clayton Christensen):

Apple’s strategic move can be linked to Disruptive Innovation as well. Christensen’s
theory focuses on how smaller companies with fewer resources can disrupt existing
industries by targeting overlooked segments with new technology or business models.
Apple anticipated the technological shift from feature phones to smartphones and
capitalized on it by introducing a radically new product. Through innovation, Apple
not only created a product that disrupted the mobile industry but also reshaped the
entire market, much like the strategic planning advocated by Sutra.

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