9 What role did iTunes play in Apples corporate strategiesSo

9. What role did iTunes play in Apple’s corporate strategies?

Solution

Apple\'s iTunes is an instance of \'Blue Ocean Strategy\'. The organization creates uncontested market space to make competitors relevant. It decreases costs and creates value. This market space is associated with high potential profits. This strategy is considered more dynamic than Porter\'s five forces model.

Apple began distributing content in 2003. iTunes was launched to let users download songs. The buyer did not have to purchase a CD; they could purchase even a song. Apple launched a device, the iPod, for listening to music. Apple was thus present in the space for distribution, application for buying, and, listening to music. The competition was not the benchmark. The organization created a leap in the value proposition for customers.

iTunes moved the market boundaries. The products are design-driven and focus on user experience. In 2009, labels earned 70 cents per song for music downloaded from the iTunes store. iTunes provided even the DRM free versions. Apple closed deals with Universal, Warner, Sony, EMI, and, BMG. Organizations signed one-year deals.

The iTunes\' killers were Napster, MTV Urge, Spiral Frog, Sony Connect, Imeem but the organization continues to make profits, while many of these have gone bankrupt.