The Creation of The Ipod and The Importance of Sun Tzu's Constant Factors and Porter's Five Force

Apple’s creation of the iPod reflects the teachings of Sun Tzu, and Michael E. Porter. Sun Tzu was Chinese military general that wrote the book “Art of War”. Michael Porter is a professor at Harvard Business School, who wrote Porter’s Five Forces. The iPod shock the technology world in 2001. The proceedings leading up to the invention of the iPod apply to Sun Tzu’s Constant Factors, and Porter’s Five Forces. Sun Tzu Constant Factors are Moral Law, Heaven, Earth, The Commander, and Method and Discipline. Porter’s Five forces are Threat for New Entrants, Bargaining Power of Buyer, Bargaining Power of Suppliers, and Threat of Substitute’s Products or Service.

Sun Tzu Constant Factors are the most evident in the iPod creation. In the process of IPod’s production, Steve Jobs (Apple’s CEO) made the deadline for the iPod to be available for consumers by Christmas, which relates to “Heaven”. “Heaven” is Sun Tzu word for time and change in climate. During the time around Christmas, the demand shifts because consumers purchase more goods than any other time of the year. The iPod debut release on Christmas will boost Apple’s product sales, and show a good time management. Apple employees admire Steve Jobs because he held a good innovative background, and he could increase his employee’s human capital if they worked under him. According to the Steve Jobs book, he took a 100 of his most valuable employees on a retreat. He obtained followers of his innovative streak, which represents Sun Tzu’s “ Moral Law”. Apple settled with a small business name Portable Player that manufactures mp3 players. The relationship between both companies gave Apple security, and chances of life during the process of producing the iPod. Security, and chances of life is Sun Tzu’s meaning of the factor “Earth”. The exclusive deal between Apple and Portable Player granted Apple rights over the innovative mp3 player.

Steve Jobs had good expectations about the project of creating the iPod. Jobs assigned Jon Rubinstein as the iPod project manager. Rubinstein hired an entrepreneurial programmer from the University of Michigan name Tony Fadell to be a member of the development team. During Fadell’s proposal of the competitors, Jobs had sufficient confidence and courage in the project to neglect one major competitor called Sony. Jobs explain to Fadell, “ we know what were doing, and they do not”. Jobs ask many questions during proposals and are strict on preference. He made strict demands to Fadell to create an iPod ensuring it only takes 3 clicks to play a song. Jobs’ actions relate to Sun Tzu’s factor “ The Commander”, which signifies courage and strictness.

During the iPod creation, Jobs displayed evidence of Sun Tzu’s factor “ Method and Discipline”. Sun Tzu’s factor “ Methods and Discipline” means graduation of ranks, maintenance of roads for supply transportation and managing. Apple modified Portal Player's deficiencies to create the iPod, which exhibited maintenance on a product. Jobs manage his innovation by simplifying. During the production of the iPod, obstacles arose such as, switch locations, button colors, and pricing strategy issues. Jobs also develop a method to limit iPod use for more interaction with iTunes. Users create their music playlist on iTunes.

In addition to Sun Tzu’s Constant Factors, Porter’s Five forces establishes itself in the IPod’s creation process too. Apple focuses on Microsoft as Porter’s “threat of new entrants”. According to the Steve Job’s book, Microsoft CEO Bill Gates acknowledged the product and ask “If it is Microsoft Compatible?” His curiosity of the iPod proves he is willing to create a plan for Microsoft to benefit off the iPod. Porter’s second force was the rivalry amongst existing competition. The existing competition addressed in the Steve Jobs’ book was Sony. Steve Jobs did not worry about Sony. Fadell felt as they were competition, but Jobs sensed they were unaware of Apple’s innovation.

Porter’s second force is “Bargaining Power of Buyer” which gives Apple the advantage. The creation of the iPod places Apple in a Blue Ocean Market where they can choose a profitable price of $399. Tech geeks do not agree with the price abbreviating iPod for “Idiot Prices of Devices”. During the creation of the iPod, there was no other product on the market comparable which gave buyers limited bargaining power. The bargaining power of the supplier was Porter’s 3rd force. Apple closed an exclusive deal with their Japanese supplier Toshiba. Toshiba sold their rights of the disk used for the creation of the iPod to Apple, which gives Toshiba little bargaining power. The fourth Porter’s force is the threats of substitute Products or Services. During the creation of the iPod, Jobs worried about the threat of CD burners and file sharing programs. The two substitutes threaten the iTunes store sales of music.

In the end, the iPod creation applies to Sun Tzu’s Constant Factors, and Porter’s Five Forces. Many businesses across the world still use the two systems for strategic planning and to become aware of their competitors. The two strategic systems are suitable to use when entering a new market.

Choose the principality you think best fits Steve Jobs entry into Pixar. Discuss what the principality takeover means, in modern terms, and support why it best fits Jobs situation.

Steve Job’s entry into Pixar is a Hereditary Principality. Modern Hereditary Principalities are companies with the traditional system and practices that are open for modifying. The new CEO joins the company and modifies the methods according to the companies SWOT Analysis. If the new CEO fails, then the board of directors can fire the CEO. However, The Board of Directors can rehire the CEO if they believe they need former CEO back.

Hereditary Principality fits Jobs situation because he did not build the company from scratch. Before Jobs bought the company, name was The LucasFilm’s computer division. They produced software, and hardware for rendering digital images. Jobs concentrated on changing the strategy of the company, and finances. His goal was to sell affordable Pixar computers and make it user friendly.

Think back on your semester project. Decide whether your strategic plan approach to the project (as an organization) was more of a: resource based theory, dynamic theory, or Porter's Five Forces approach. Support your conclusion with specific examples, and be sure to write a strong, essay argument that covers all the important aspects of the theory and your project.

The Petersburg Positive Image Campaign was a difficult project with great obstacles to overcome. The group project conducted a resource based theory approach. In order to form a strategy, the group discovered resources to determine Petersburg Public Schools values. The group engages in a great deal of research. They discovered Petersburg Public Schools’ competitive advantages, opportunities, and capabilities. The Resource Based Theory of Competitive Advantage Practical Framework discusses the 3 factors.

The Petersburg Positive Image Campaign group found resources to develop a SWOT Analysis. According to Porter’s Research Based Theory, the resources are strengths and weakness-comparing Petersburg to other competitor school districts. Strength can also be known as competitive advantages. Some competitive advantages the Campaign states are Petersburg Public Schools have the best basketball team in the region, and a low student-teacher ratio. After the group discovers the competitive advantages, they identified the capabilities.

Capabilities are the second step of the Resource Based Theory Strategy Analysis. What can a firm do more effectively than the other? Petersburg Public School has the potential of performing better than other school districts in the area. The group describes their capabilities as a 100% of students passing the SOL test, and 100% of students graduating. Petersburg Public School’s gain competitive advantages by achieving their capabilities.

Finally, The group forms a strategy for the Petersburg Positive Image Campaign. Creating a Strategy is the last step in Porter’s Resource Based Theory. A Few of the group’s objectives were students should perform well in core courses, and all students should graduate on time. The group recommended teachers should create improvement plans for each student to pass core courses. Advisors should also be assigned to students to ensure graduation on time for students.

In conclusion, the Positive Image Campaign was a tough project to create. The Resource Based Theory Strategic Analysis was the template of the project. The group formulated a strategy to present to the school board, and potential investors. Porter’s Resource Base Theory for Competitive Advantage is a good system to use while formulating a strategy to maximize the performance of a firm. More companies should use this theory in the future to create highly effective strategies that can give them competitive advantage in the market.