Assignment 4

Business-Level and Corporate-Level Strategies

In modern times, the business environment has continued to experience competition among organizations operating in the same industry. Competition is always enhancing due to institutions make their operations more global. Principally, organizations utilize business level and corporate level strategies to have a competitive edge over their close competitors. Business level strategies are the activities that a firm undertakes to attain a competitive gain in the industry. This strategy entails exploiting main competencies that add value to the clients. This mostly takes the form of being unique in the operations by the provision of diverse products from those of close rivals. Essentially, there are five business-level strategies that a firm can undertake to attain a competitive edge and they include differentiation, focused differentiation, cost leadership, focused cost leadership and integrated cost differentiation/leadership (Leonard, 2019). This paper will focus on the business level strategies and corporate strategies of Apple which operates in the tech industry. 

Apple Business-Level Strategy

Apple is focused on making the best products in the industry. The company heavily focuses on innovation by making new products as well as making improvements to the ones that are in existence. It is due to the innovation that Apple has maintained to be a dominant force in the sector. One of the areas that Apple beats its close rivals is the differentiation of the products it offers. The differentiation has made it maintain its position in computers, digital music players, mobile phones and online music stores. For instance, Apple engages an individual institution to deliver an operating system and hardware for its products. This move assists the company to concentrate on the quality of design. Additionally, Apple has placed itself in the high-end markets because it carries a reputation for making products that are highly valued by clients. The target market of its products is the individuals who are willing to purchase more for products that have a better user experience. Hence, Apple strives to make products that suit the taste of their clients. Another differentiation strategy that has been adopted by Apple is related to the distribution of its products. The distribution of Apple products is done through retail stores which it has established all over the world. Furthermore, Apple’s delivery of service is unique and superior because it boasts of state of the art bar for technical maintenance, constant and dedicated client service. The organization also permits clients to sample their products first before purchasing them. The company also uses the cost leadership strategy where it has invested heavily in innovation. This has made the company to produce products which are valuable and acceptable to clients at fairly low prices. Apple uses this strategy to produce high quality, cost-effective products using reasonably priced raw materials that are supported by a vibrant team. The company has also joined alliances with other companies that permit Apple to concentrate on innovation and market intelligence. For instance, Apple has the iTunes service which allows other organizations to distribute videos, music, and games at low costs. This move has helped eliminate disks and tapes. Additionally, this strategy has become more positive due to the elimination of middlemen because it can sell its products directly through its website (Dudovskiy, 2019).  I think the differentiation strategy is the most important for the long term success of the organization. This is a good choice because many people would wish to have elegant products, unique and user-friendly which make them stand out among many people. This strategy has also helped the company to maximize profits through the provision of products that stand out due to their high design and quality, innovative and user-friendly. 

Apple Corporate Level Strategy

The corporate-level strategies of Apple consist of the diversification of its products at moderate and high levels. Apple has a blend of individual computing and entertainment with high-level integration which makes it more efficient in the production and delivery of its products at fairly competitive rates while remaining profitable. One of the benefits of the diversification strategy is that clients can have their desired products of high quality and design since all products are integrated and they run on the same operating system. Apple also forms strategic alliances to benefit from the economies of scale, acquire knowledge from close rivals and share costs and risks. Another corporate strategy that has been adopted by Apple is internationalization. The company has put up its production base in China to benefit from the low cost of labor, access to raw materials, the potential of a high market and the favorable economic environment as a result of China’s stable economy. I think the internationalization strategy is the most important corporate strategy for long term success. I think this is a good choice because the company has been able to beat the competition. This is through the production of standardized products in the market worldwide because the engineering design and manufacturing are carefully controlled and centralized. This makes identification of Apple products easy and the only customization is the power source due to different voltages in different nations (Ireland, Hoskisson, & Hitt, 2013). 

Competition Environment

The tech industry is very competitive due to the many players operating in it. Apple encounters competition at all levels and lines of business. Due to the expansion of the global market, competition has increased because of the globalization of trade. Mainly, the iPhone and iPad from Apple are compared with products from Samsung especially the galaxy family hence considered a direct competitor. In the computing section, Apple faces great competition from Microsoft, Acer, HP, and IBM. Competition is the smartphone business that has grown although the largest competition for Apple is in the tablets segment where close rivals have taken almost 28% of Apple’s market share of the tablet business. Despite the competition, the business level strategies by Apple have supported it in controlling the market as a result of high differentiation. This strategy revolves around its ability to develop and design its hardware and software as well as continued innovation and having a development and research team. From a broad perspective, the company continues to make innovative products such as iPhones and iPads. The differentiation in products has permitted Apple to price the products at high rates while still keeping its loyal clients (Farooq, 2019). 

At the corporate level, Samsung is Apple’s main competitor. Samsung is recognized for its smartphones line of business, especially on its galaxy series. The galaxy series has been putting behind some of Apple products due to the features and technology used. The competition is very aggressive because Samsung has capitalized heavily on competitor intelligence. Competitor intelligence entails studying what close rivals are doing than making more sophisticated products which some people may presume to be imitation or fast follower to some lengths. Samsung also has an elaborate supply chain and distribution channels which have made its revenues to keep in growing. To counter this challenge, Apple has made all its products share a similar design technique platform. The establishment of retail and online stores by Apple has also provided convenient methods for clients to buy the products offered. This enables the organization to operate at lower costs. The iTunes and App Stores make Apple the leader in the accessibility of digital videos, music, and apps. Most importantly, Apple has realized the importance of strategic alliances with other organizations to offer services in the production process. Apple has also embraced corporate diversification, vertical integration, and internationalization which have helped immensely to beat off the competition. Competition has continued to adversely affect the market share of Apple in the sector hence; the company has to be forceful in its corporate level and business level strategies. Moreover, Samsung poses a great danger in the smartphone business to Apple. Samsung looks to be a dominant force due to its strategic approach to innovation, penetration, promotion and research and development. Samsung has heavily invested in advertisement to market its products (Farooq, 2019). Although Samsung offers products that are relatively cheaper than Apple’s to capture the middle-class market, Apple will most likely be the most profitable in the long term. This is because Samsung faces competition from other firms that are also offering the same products at the same or lower prices hence customers can always switch product use anytime due to the price element. This shows that clients have an option to get substitute products to those offered by Samsung. In the case of Apple, they have a specific target market who is clients at the high-end markets who can pay more for the products. Clients would want to keep the same standard and class due to the uniqueness, quality, and design and user-friendliness of the products despite the price. Hence, customer loyalty among Apple product users is very high because they value the quality of the products and they would not purchase imitations or any other brand. 

Competition in the Fast Cycle and Slow Cycle Markets

The tech industry is considered to be in the fast cycle market. Some products have moved to the slow cycle market in the industry like personal computers as others remain in the fast cycle market. Smartphones and tablets have been experiencing the fastest growth due to the new gadgets being sold in the market. The gadgets are also replaced almost immediately before clients have had a full orientation to them. Apple and Samsung, who are the main rivals, appear to be pushing themselves very hard to outdo one another in the smartphone market (Hanson, Hitt, Ireland, & Hoskisson, 2016). For instance, late last year, Apple launched the iPhone 11 Pro which hit the market immediately. Even before the consumers have had it sink in their minds, Samsung has the latest Samsung Galaxy S20, S20+ and S20 ultra which were launched in February this year. With such a trend, a huge battle is expected in the future for the companies and there is no certainty that any of them is going to be dominant in the market and still be profitable. However, in the slow cycle market, Apple has a brighter future than Samsung. 

Conclusion

The technology sector is competitive and needs companies operating in it to employ intense strategies to gain a competitive edge and also operate profitably. Businesses can adopt the business level strategies as well as the corporate level strategies that ensure the company is attractive to clients. Apple has used business-level strategies that are focused on differentiation and cost leadership which have enabled it to be dominant in the industry. The strategies of having unique designs and retail stores have worked well for the organization. The corporate strategies of diversification, alliances, and internationalization have also posted positive outcomes. Nevertheless, in the fast cycle market, Samsung poses stiff competition in the industry. This is because many clients in this industry can afford products offered by Samsung due to their low prices when compared to Apple products. 

References