Apple Inc- Strategic Choices and Evaluation

Strategic Choices and Evaluation

 

Selected Corporation:

The company chosen for this task is Apple Inc. because of its renowned name, diversity in product lines, massive operations and vast size. It is an American multinational corporation that designs and manufactures consumer electronics and computer software products.

The following proceeding shows Apple’s value discipline, generic strategy, grand strategy and recommendations.

 Value Disciplines of Apple Inc:

Koch (2010) Treacy and Wiersema introduced this concept following by the lifetime workings of Micheal Porter. According to the theory every company focuses on one of the following three dimensions:

  1. Customer Intimacy
  2. Operational Excellence
  3. Product Leadership

Among these three dimensions mentioned above Apple focuses on Product Leadership while maintaining the rest two according to industry standards. Apple falls perfectly in following this category since its products are highly innovative and competitive than its competitors.

Schmitz, Global Strategy (2012) entitles in it companies that offer the leading-edge products and services, consistently enhancing consumer value and making the competitor’s products obsolete. Apple is the best suited example in this category since it is innovation driven, sets high standards for its niche market and then strives hard to greet those standards; this strategy sets its competitors on greater risks. The tremendous list of Apple’s innovative products includes iPad, iPhone, iMac systems, wireless multimedia and many more.

Apple Inc plans fast today and implements the very next day in order to stay prior to launch innovation in the market. For companies like this it is better to make abrupt decision and give a launch instead of waiting for better planning that may get delayed. Example is launch of iPhone 5S. It was a sudden launch with minor changes in technologies and body after iPhone 5, to deal with the success of Galaxy 5 series by Samsung.

Bahel (2009) believed that companies need to realize and act upon what is most important to them in order to operate at most effective level. Bahel clearly relates Apple Inc with product leadership in a way that such companies are strong in innovation and marketing, so do Apple Inc is.

 

Generic Strategy of Apple Inc:

Generic strategy is basically an approach to strategic planning that firms adopt to improve their competitive position in specific market or industry. The three basic strategies by Porter that firms focus to compete in their respective market are: Low cost Strategy, Differentiation Strategy and Focus Strategy. However Arthur A. T Jnr (2005) extended these three strategies further into five strategies.

Griffin (2014) Apple uses Differentiation strategy among Porter’s described three generic strategies since it offers distinctive products by offering high quality products that raise consumer’s value. To succeed in this strategy Apple Inc has undoubtedly employed scientific research to its business processes, a highly skilled and creative product development team, efficient sales and marketing team and a positively positioned brand name for delivering innovation and high quality products.

Masi, Strategic Analysis of Apple Inc, (2009) Apple is following differentiation strategy in a broader aspect. Apple differentiates its products by delivering superior quality, exceptional design and customized service. Apple Inc is currently targeting broad range of consumers, from unsophisticated beginners to high profile professionals Apple is there to cope up with everyone’s personalized needs and demands.

Apart of describing the specific Generic Strategy that Apple Inc. focuses, following is mentioned an analysis of all Porter’s Generic Strategies deployed by Apple Inc. in order to sustain into market by meeting its standards:

  1. Low Cost Provider Strategy: Apple Inc. realizes that there is demand for Low budget consumer electronic as well, so it designed iMac computers and iBook computers for meeting requirements of basic computer buyers. The cost of this model of computer is quite low.

 

  1. Broad Differentiation Strategy:   This strategy is well discussed above. This is the generic strategy that Apple Inc purely focuses, which has made Apple Inc. leader of the innovation industry. Apple Inc. focuses on producing products for two types of market segments. One for initial users or beginners and other for sophisticated professionals.

 

  1. Best Cost Providers: This strategy is employed to give consumers best possible services and products in a single package e.g, incorporation of iPod digital musical player.

 

  1. Focused Differentiation Strategy: As its previously discussed that Apple has focused on two types of market. Computers for beginners are less complexed while for professionals, computers are designed meeting their requirements.

 

 Grand Strategy Evaluation of Apple Inc. through Grand Strategy Matrix:

Grand strategy matrix is based on two evaluative dimensions: Competitive Position and Market (INDUSTRY) Growth. Following is the four quadrant format that comprises of all the strategy that the firm should use being in the respective quadrant.

 

                                                      Rapid Market Growth
Quadrant II

Market Development

Market Penetration

Weak Competitive Position

Product Development

Horizontal Integration

Divestiture

Quadrant I

Market / product Development

Market Penetration

Strong Competitive Position

Product Integration

Integration

Diversification

Quadrant III

Retrenchment

Diversification

Divestiture

Liquidation

Quadrant IV

Diversification

Joint Venture

 

                                                          Slow Market Growth

 Interpretation:

Apple Corporation lies in the second quadrant of the Grand Strategy Matrix according to the report’s analysis because Apple is growing rapidly and has shown improvement in its major divisions and businesses, but the only factor that Apple lacks is that it is despite having a strong position right now, it does not serve in other markets like Asian market that makes its market share lower. Apple is taking out enough profits from the markets it is targeting currently but it needs to grow its market and introduce its current and new products in new markets that will attract more customers and will bring sufficient profits to Apple shareholders. As Apple is currently focusing the American and other big country’s market only, but there is a huge potential exist in Asian market and apple is not serving this market directly.

So, Apple should expand its market share by expanding its business in Asian Market. Apple’s competitors like Dell and HP are very much into the Asian market, which is affecting its competitiveness. For this, Apple should adopt market development strategies and to hold its existing market share in other markets, it should adopt market penetration and product development strategies. Some competitive mergers can be very helpful in establishing the business in the Asian market by using horizontal integration strategy. Apple is no way at the position of adopting divestiture and liquidation strategies.

 

Recommendations

According to this evaluation of Apple strategic position apple should adopt some major strategies that include

  • Market development
  • Market Penetration
  • Product Development
  • Integration

As it stands at a point where it is stable and growing, Apple results show that it has a strong management at the back covering all the factors that are currently affecting and are expected to occur in the way of Apple. Apple still considers itself in the Growing/ Developing Stage as it’s promising to bring new and improved products to the market in near future. Apple is the most innovative product developers; its profile is aggressive, which makes it able to cover the integration with its distributors, suppliers and competitors.

Apple is very strong in its major divisions that are bringing huge profits to Apple. These divisions are growing at a pace that matches the industry, though in last few years the economy downfall did negatively affect many companies but Apple is one of the few brands that showed clear profits during this period. This profit is because of major divisions that are now leading the Apple market. The promises and contracts with individuals, institutes and corporations also played vital role in the survival and continuous growth of Apple because of the high CRM that forced customer to buy from Apple. The Apple compensation of Windows in Mac systems is also attracting many Window users and will hopefully increase the number of users of OS X.

Apple shouldn’t bet the farm on any of its existing technologies: the Mac OS, Rhapsody, or NCs. It also shouldn’t waste its only viable resource, the loyal Mac users. Apple has a responsibility to keep its users informed and happy more than perhaps any other company in the world. Without support from the faithful, Apple is going nowhere, so it should put together a clear strategy soon and take feedback from the users. That’s a good way of measuring the future success of any technology, and it will help stem the abandonment of the Mac platform.

 

 

 

 

 

References

Bahel, J. (2009). CIO Insight: Do You Know Your ‘Value Discipline`? Retrieved September 5th, 2014, from https://www.cioinsight.com/c/a/Opinion/Do-You-Know-Your-Value-Discipline-665901/

Griffin, D. (2014). Four Generic Strategies That Strategic Business Units Use. Retrieved September 6, 2014, from https://smallbusiness.chron.com/four-generic-strategies-strategic-business-units-use-496.html

Koch, C. (2010, March 12). Value discipline. Retrieved September 6, 2014, from https://www.christopherakoch.com/tag/value-disciplines/

Masi, B. (2009). Strategic Analysis of Apple Inc. Retrieved September 7, 2014, from, https://www.scribd.com/collections/3581651/Brian-Masi-Strategic-Analysis-of-Apple-Inc

Schmitz, A. (2012). Value Disciplines and Business Models. In Global Strategy v. 1.0 (p. section 4.3). Creative Commons.