VRINE Model for one of the largest IT corporations in the world -- Apple Inc. The paper starts with a brief introduction to the company; its history, products, scale of operations, and market standing; and proceeds by appraising its resources and capabilities using the five dimensions or tools of VRINE Model, i.e. Value, Rarity, Inimitability, Non-Substitutability, and Exploitability. It concludes by summarizing the main ideas and findings from the discussion.
Apple Inc. (Formerly Apple Computers) is an American multinational corporation engaged in the development, designing, and promotion of a variety of technological products, including personal computers, smart phones, software, web browser and networking solutions, music players, computer and cell phone accessories, etc. Apple Inc. was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. It is headquartered in Cupertino, California and has 394 retail stores all over the world. It also operates through its online incarnation in the form of App Store and iTunes Store. Apple Inc. was formerly established as a computers manufacturing company. However, it diversified its business into consumer electronics with the introduction of iPhone, iPod, and iTunes. iPhone has been the most successful product of Apple Inc. since its introduction in 2007 (Apple, 2013). The Fortune Magazine has ranked Apple Inc. On the top of the list of world's most admired companies for five consecutive years from 2008 to 2012. It is presently named among the world's largest IT corporations with respect to revenues (CNN Money, 2011).
VRINE Model for Apple Inc.
VRINE Model is an analytical framework that appraises an organization's capabilities and resources which can give it a competitive advantage in its industry. It analyzes the organization's internal strengths with five different tools or perspectives. These are: Value, Rarity, Inimitability, Non-Substitutability, and Exploitability. These five tools collectively assess the organization's market standing on the basis of its most competitive products and suggest future strategies which can help it in beating the competition in the most profitable and effective way (Antoldi, Cerrato, Depperu, 2012). The following section comprehensively describes the VRINE Model for Apple Inc. And explains how its products fall on these five dimensions and lead it to ensure marvelous financial performance.
The first tool or dimension of VRINE Model aims to appraise whether the company's product gives value to its consumers or not. The value which a company's resources or capabilities give to its consumers and to the company itself contributes towards its success and competitiveness in its industry (Antoldi, Cerrato, Depperu, 2012). Apple operates in a highly advanced and rapid-paced industry. Therefore; a product, resource, or capability is valuable for the company only if it enables it to stand out among a large number of rivals in the industry. At present, the most successful product in the world in any consumer electronics category is iPhone -- developed by Apple Inc. It is also considered as the most innovative and multi-functionality smart phone which can perform numerous functions with its highly advanced technology and super-fast processing speed (Apple, 2013).
This smart phone played the greatest role in making Apple Inc. The most competitive, successful, innovative, and the largest IT Corporation by revenues. Similarly, the company's other top products like iPad, iPod, Mac systems, Apple TV, iTunes, etc. are successful due to the value which they give to the company for its research and investment, and to their consumers against their money (Apple, 2013). Apple has achieved remarkable position in its industry with third largest market share in the smart phone industry after Nokia and Samsung. This success can be attributed to its highly advanced and innovative products which not only meet the consumers' changing demands and lifestyles, but also ensure the company's financial stability in hard times. As the most successful and competitive firm in the Global IT industry, Apple Inc. is able to avail the potential opportunities from the market and encounter the environmental issues and threats with its valuable resources and capabilities.
Although Apple products like iPhone, iPad, iPod, iTunes, Macintosh system, etc. are highly advanced and valuable; they cannot be called rare because of the presence of a large number of competitive products in the market. However, Apple Inc. comes up as the first-mover in its industry most of the times. Its iPhone, iPad, iPod, iTunes, and App Store have remained the only products or services of their kind in the past. This rarity ended when other smart phone, consumer electronics, and computer manufacturers diversified and modernized their businesses and started competing Apple with similar products. At present, the only rare products or services of Apple are its iOS (Operating system for its iPhone) and Macintosh (Operating system for its personal computers) which are not being produced or offered by any of its industry rivals. These two products face competition from Android (by Google) and Windows (by Microsoft) respectively. These two competitor products also have a greater market share as compared to iOS and Macintosh. Unfortunately, Apple Inc. could not protect its rare technologies and services due to the technological innovations in the Global IT industry. As a result, the competitor firms like Microsoft, Google, Samsung, Nokia, and others developed innovative products to compete with Apple.
Inimitability and Non-Substitutability:
Keeping in view the high demand and appreciation of multi-touch, multi-functionality, and innovative smart phones, Apple competitors also introduced smart phones with similar technology and designs. At present, the iOS and Macintosh operating systems compete with Android and Windows which targets the same consumer segments in the Global market. Due to the rapid advancements in the field of Computers and Information Technology, Apple products are no more inimitable. One of the major reasons for greater market share of Android and Windows as compared to iOS and Macintosh is their compatibility with the products in which they are used. Apple's iOS and Macintosh do not support any other technological product than iPhone and Mac systems. On the other hand, Android and Windows are used in the smart phones and personal computers by a large number of manufacturers all over the world. Therefore, it can be said that Apple products have not succeeded in keeping themselves inimitable among their competitors.
The major competitors of Apple which make substitute smart phones against iPhone include Samsung (Galaxy S-Series), Nokia (Lumia), Motorola (Droid), HTC (Sensation and Vigor), Google (Nexus), latest BlackBerry phones, etc. Similarly, Apple Mac Systems and laptops compete with Microsoft, Dell, HP, Acer, Sony, IBM, Samsung, etc. These competitors are giving a stiff competition to Apple by offering substitute features and services at very competitive rates. Despite having a large number of substitutes and lack of inimitability, Apple is able to develop its own target segment and consumer loyalty. The demand of iPhone, iPad, iPod, iTunes, and other top Apple products is still showing an increasing trend which is a proof that Apple is still the most favorite IT brand in the world (Apple, 2013).
Apple products are highly exploitable to market. The high level of appreciation and brand loyalty among consumers help Apple Inc. To exploit its resources and manufacturing capabilities to avail the attractive opportunities from the market and keep itself on the top of the list of innovative IT companies of the world. Apple generates the most of its revenues from its smart phone and web store product lines (Apple, 2013). However, it gives an equal emphasis to all the existing product categories while making investment on Research and Development, promotional campaigns, business expansion, total quality management, or supply chain management (Ellwood, 2002).
Apple believes that exploitability of its resources and manufacturing capabilities is necessary to take advantage of other dimensions of VRINE model. For example, Apple cannot create a real value for its products if it does not exploit potential opportunities from the market and improve its products according to what…