The Transformation of the Business Structure of Apple Computer Inc. and Its Dynamic Capabilities

This study examines how Apple’s dynamic capabilities (DC) drove its business transformation and rapid growth and how these attributes contributed to its sustained competitive advantage and long-term growth from David J. Teece’s dynamic capability framework (DCF). The analysis demonstrates that Apple’s structural transformation can be explained as an sensing-seizing-reconfiguring process in which the company orchestrated the integration of its internal and external resources while adapting to its business environment changes. Apple’s unique VRIN resources supported its integrated organizational scope and functionally structured organization, which are shaped by its historically accumulated resources and strategic path. When effectively leveraged, these resources enabled Apple to build its competitive advantage, engage in frequent course correction, and flexibly develop user-friendly, high-margin products. This case study suggests the following issues regarding Teece’s DCF. The case of Apple’s business transformation through the iPod shows how a series of small-scale, routine development activities can lead to substantial structural change. Furthermore, Apple’s unique capabilities support large-scale structural changes as well as relatively routine product improvements and developments, reinforcing Apple’s sustained competitive advantage. Thus, the relationship between DCs, ordinal capabilities, and sustained competitive advantage remains an important issue for further investigation.