Apple strategy choice

Executive Summary

        Apple is a company based in the United States which makes computer software, electronics and computers. It is widely known for merchandises like Macintosh computers, iPod, iPad, iTunes and Mac OS X operating system among others. The firm aims at attracting and retaining customers through brand appeal, unique business set up, channel edifice and a powerful criteria of doing things so as to have a competitive advantage.

Apple’s capacity to make and cultivate its own operating systems, software and hardware, and services to give its clienteles solutions and products with state-of-the-art scheme is put at the centre of its business strategy (Arthur, 2014).  Apple had by September 2018 employed 130000 full time employees according to its 2018 Annual report. Its net sales revenue improved by 16% or $ 36.4 billion during 2018 as compared to the previous year.

The aim of this article is to give Apple management insights on what it can do to maintain competitive advantage to lead the market. Apple focuses on identifying and meeting consumer needs and impacting positively on the life of others.  Apple will continue to have a positive impact on institutions like small enterprises, systems of education and multi-national corporations.  On top of this, the company needs to be environmentally friendly and continue leading in innovation. This report will illustrate the need of Apple to adopt key strategies that it has made and those it can introduce so as to continue entering and conquering new markets.

Nonetheless, Apple has a progressive benefit no matter where you put them in the world and it for these and other reasons that Apple would continue benefiting in adopting new strategies and an understanding of the significance of developing long lasting relationships with institutions and consumers (Fischer, Staffieri & O’Rourke, 2017).

 Suitability of Apple’s current corporate level strategies

Apple key business strategy can be stated mainly to be product differentiation. Precisely, the firm discerns its services and products and services on the base of modest, yet eye-catching design and cutting-edge functionality.  The company’s current strategy is focused on three key pillars; design, strengthened ecosystem and venturing outside iPhones (Angwin & Cummings, 2017).

Concentration on design and functionality of products

Apple has adopted cutting-edge structures to give a competitive advantage.   Apple’s competitive advantage may be confounding in the long run perspective. In detail, the administration may under perform in the means of guaranteeing addition of inventive features and   abilities in the versions of the latest products thereby negating on its competitive advantage.

The company steers in having innovative products and qualified staff who participate in research and development. The company also invests in good leadership and this has also enabled it leverage these competencies across different business products. Other than its i Phones that it is widely known for, it has diversified its products base to include notebook and personal computers into the market which has led to more capital generation. These includes i Cloud, iPod touch and Apple TV.

Strengthening Apple Ecosystem

            Apple focuses on vertical integration and this has given it progressive proficiency in hardware, software and services at the same time. Precisely, a significant source of Apple competitive advantage is connected to its ecosystem, which is attained through such integration. Devices that use Apple software easily sync and perform perfectly with other related devices.

Applications are able to work well on multiple Apple devices at the same time and there is no much difference in user interfaces. However, Apple devices cannot pair with other companies’ products and this brings about a closed ecosystem. The closed ecosystem discourages customers to switching to competitors products and it also makes available prospects to influence associations with existing clienteles to offer other services and products.

Reducing dependency on sale of iPhones only  

            The company’s other strategy is moving on from only depending on sale of iPhones and focusing on other products. The company is investing more on artificial intelligence among others and these determinations are bringing about improved results in particular that Apple’s services business division generated returns of $10.9 billion in the first  four months of 2019 which is a  19% jump from similar quarter in 2018.

Research and Development

Another key strategy for the company is aggressive research and development. Before introducing a product in the market, the company carries out intense research to guarantee that the product on offer is of superior quality in comparison to those of its competitors. In addition, the firm has continued to link with other companies like Microsoft to generate new products. Through this, the firm generates more revenue.

The company has also ensured a continuous strengthened relationship between it and third party developers of software. For instance its alliance with Microsoft in 1997 brought about Mac version. The company has also partnered with like-minded developers to ensure that they have produced programs that are compatible to Mac. These are some of the main strategies and they have ensured that the company remains at top and competitive.

In addition the company on top of this needs to have a strong integrated supply chain so have a continuous competitive advantage. The company should continue partnering with prominent music and showbiz firms which will give it a massive source of media for all the firm’s products (Elliot, 2012). This partnership should also be extended to independent software developers who can formulate apps for Apple products. The company should also come up with a premium pricing strategy which is consistent with across the market. Apple products are high in prices. It should work on this to reflect prices that are generally acceptable in the market. This is without compromising on the quality.

Increasing bargaining power

Apple increases its bargaining power against its suppliers and customers by ensuring production of unique and superior goods. It has also introduced in some parts retail stores which are meant to offer better services to customers. By December 2014, it had opened 437 stores where 178 of them were outside the United States. This strategy has helped it attract more customers while the agreement with key suppliers has helped it have lower overheads and thus a low manufacturing cost.

Becoming leader in digital entertainment

The other strategy is becoming a leader in the digital entertainment by outdoing its rivals. Samsung has enjoyed higher sales of smartphones as compared to Apple. In Africa, Techno mobile makes inroads into the market and has amassed a big market share (Elliot, 2012). This stiff competition has made the company go back to the drawing board and reintegrate its operations by introducing its own stores worldwide rather than relying on a third party retailer.

Apple was facing serious competition from Dell. To beat this it entered into an agreement with key component suppliers where product design, supply chain and manufacturing superiority formed part of its competitive authority.

The future of Apple now relies on its capability to venture into new markets and developing products which are superior to those of its competitors. These products will ensure that the company continues to be a step ahead of its competitors.  The company can probably venture into production of solar power systems, automobiles, magnetic locks as well as other products that are Eco-friendly.

Conclusion

            Apple is a big multinational and its products are much sought in the world over. Notwithstanding this competitive edge, the company still needs to do more aggressive marketing. Additionally, focus more on research and development among other measures so at to remain at top.

Similar technology companies are also introducing new measures to reach their level and so this means that the company has to invest in retaining the internal and external customer through motivation and unique products in an attempt to be a continue being a market leader.

 References

Arthur, C. (2014). Digital wars: Apple, Google, Microsoft and the battle for the Internet.

Fischer, L., Staffieri, A., & O’Rourke, J. S. (2017). Apple, Inc: Pricing the iPhone (B).

Angwin, D., & Cummings, S. (2017). The strategy pathfinder: Core concepts and live cases.

Elliot, J. (2012). Leading Apple with Steve Jobs: Management lessons from a controversial          genius. Hoboken, New Jersey: Wiley.

We have other related article in apple swot  analysis in case you would like to read about it.

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