Second Strategy Post

As I look around the classrooms during lecture, I notice that the most common brand of laptop I see is an Apple. I have always been curious of this fact, and now after reading the case about Apple I've tried to think about why this is from a strategic perspective.

Apple MacBooks are usually at least $200-$300 more expensive than their PC counterparts, so there must be SOMETHING that inspires consumers to bite the bullet and pay a premium.

If you look at the hardware, you'll notice that there's not much difference in the brands used. In fact, in my cheap PC laptop, the hard drive is a higher quality than the default hard drives in comparable MacBooks. Looking at the other parts of hardware, nothing in Macbooks is notably superior to your average PC laptop.

If that's the case, then why are people willing to pay a premium? The answer lies in all of the parts of the computer that are visible to the eye. Apple has made sure that they have superiority in all of the pieces of a laptop that you can visually compare. The first thing you notice about Macbooks is how sleek the case is: a uni-body fully aluminum enclosure. The thing just screams quality. Also, the screens on Macbooks are extremely bright and vivid. When you look at a Macbook with the brightness turned up, it's almost like you're staring into heaven itself. Finally, the operating system (OSX) on Macs is built from the ground up on flashiness. While OSX may lack some functionality of Windows and other operating systems, it looks darn good.

This strategy makes perfect sense: the vast majority of prospective laptop owners are not going to go online and look up every part of a laptop to see what gives them the best bang for their buck, instead they're going to go to a retail store and look at laptops in person. What are they going to be attracted to when they get to the store: a cheap looking plastic laptop with an overly-shiny screen, or a sleek looking laptop with a metal case with a vivid display? Assuming they can afford it, they're going to splurge on the nicer looking laptop.

This is a genius strategy by Apple: while the metal case, nice screen, and an in-house operating system may be slightly more expensive, it sure doesn't cost Apple $300 per Macbook.

The big question this leaves me with is this: why have companies not applied this strategy to other industries? Imagine a car that has a flashy exterior, a high-tech interior, and sounds like a million bucks. Now throw in the internal parts of a higher-end Honda Civic, and you've got an above average car on the inside that looks like it should cost 50 grand! Sell it for a couple thousand more than a Civic, and you're making a huge margin. OK, maybe the car industry isn't the perfect example, but I'm sure there's countless industries out there that could benefit from the Macbook model.