Buisness Admin

03/01/2020

Apple Inc Business –level and corporate-level Strategy

Introduction

The advancements in technology have accelerated the growth of the business across the world. The vital role of information technology has made a sharp surge in demand for computers and other electronic devices, which have proven to make life better. Apple Company was started in 1976. Through its sound business and corporate strategy, the company has risen to be a world leader in the design, production, and sale of computer software, consumer electronics, semiconductors, and other services like artificial intelligence, financial technology, and cloud computing.

The company's business model and organizational culture have enabled it to survive turbulent times through all these decades (Montgomerie, & Roscoe, 2013). Apple Inc continues to lead in design, development, and sales of consumer electronics not only in the US, where the company has its headquarters but also throughout the world. Apple continues to dominate the market over its competitors, like Samsung. The business and corporate-level strategy provide the American-multinational company with a competitive edge. The company remains on the competitive advantage of the market and continues to churn out profits turning to billions of dollars. This paper intrigues Apple's business strategy of remaining relevant in the market, and the corporate-level Strategy adopted by the company to stay profitable in the highly competitive market of Silicon Valley.

Business-Level Strategies

Apple Inc. adopts a unique strategy that is characteristic of product differentiation. The California-based company offers attractive but straightforward designs with advanced functionality. The technology company focuses on the design and functionality of its products. The company has enhanced features and functions of its list of products and services (Dudovskiy, & Dudovskkiy, 2019). Apple's list of innovations includes the introduction of the iPod, the development of Macintosh, and the launching of iMac. These life-changing innovations were ranging from devices storing thousands of songs, to computers using graphical-user interphone and the iMac, a transformative technology that changed the computer design outlook. These innovations put Apple on the competitive edge of the market as the company.

Apple, as a technology-based company, is wholesome in both hardware and software. The vertical business integration, as adopted in Apple, is a success factor of its dominance of the market. Competitive advantage is gained from Apple's products, ease of synchronization. Software and devices from the company work well with one another (Dudovskiy, & Dudovskkiy, 2019). The applications and software work on various Apple devices with less difference to the user interface. Apple's devices are not compatible with other products in the market. Application and software are created in the fashion of a closed –system. The company's business strategy has switching costs for the customers, as they must incur the charge when using devices, not from Apple Inc. This secure system provides opportunities for leveraging relationships between the company and its customer base. The company thus stays ahead of the rest in the competitive market.

Apple's business strategy of decreasing dependence on the sales of the iPhone is a plan to transition from relying on sales of the iPhone to making priorities in its services and other divisions. High-profile changes taking place taking in a short period indicate the company's new Strategy. Focus is being made on services and different segments of the whole business to avoid dependence on the sale of phones for profits. This has gained track as benefits have been churned out from Apple's diversified products and services.

The ability to design and come up with its software, applications and other services puts Apple at the top of the market. Customers are provided with innovative solutions for their needs in its core business strategy to remain relevant and profitable amid fierce competition by already existing, and as well as new businesses. In 2018, the company employed 132,000 workers while its net sales increased by USD 36.4 billion thanks to its business strategy, which had put a focus on the design and functionality of products (Dudovskiy and Dudovskiy, 2019). By strengthening the company’s internal environment to enhance profits, Apple has been able to acquire, and penetrate markets effectively.

The company’s hierarchical organizational structure works to its advantage. Integrating product-based groups for collaborations and a proper corporate culture have enabled the technology giant to prosper. The company's leadership is effective as CEO Tim Cook has been widely recognized for industrial and innovative personality, which he fostered within the organization.

Corporate-Level Strategies

. Corporate –a level strategy adopted by Apple is to ensure a competitive advantage over other technology-based firms which make a try to control the lucrative market of today's world. Apple’s corporate strategic plan is to leverage competition on different levels. Apple’s corporate-level Strategy is based on the dominant business type of business, in which between 70% and 95% originates from a single transaction. The period of the low level of diversification lasted from 1976 to 1996, in which virtually all the products sold were related to computers (Dudovskiy, & Dudovskkiy, 2019). The company started with Apple 1 and developed their products to Macintosh, a faster but lighter machine. The company’s growth was restrained on computers, chips, and software. This showed a low rate of diversification compared to the period after 1996.

The company's Strategy on the corporate level has involved the production of devices and gadgets with a similar design; these designs can work on numerous other devices. The company's products like Apple TV, iMac, iPad, iPhone and iPods are on retail in stores worldwide. The advantage of having retails worldwide is for a considerable market share. The company is the only one with complementing online-stores that provides customers with a better purchasing experience (Kuratko, Hornsby & Covin, 2014). Apple's retail Strategy adds many software, apps, music, and games for purchase on the iTunes store. The excellent customer care support complements the robust retailing Strategy, which not only maximizes profits but also increases customer loyalty.

The period after 1996 has seen massive advancements in the field of technology, and Apple has moved with the pace. Apple’s layout was designed to improve the flow of returns (Cusumano, 2010). The company’s experience offline, as well as online, was woven together for an efficient store with the ability to care for the increasing number of customers. The company has made an incredible marketing record by operating over three hundred and sixty retail stores and hosts an average of a million online visitors each day.

By 2020, Apple projected $20 billion in profits from its retails. The company had made losses in the period before 1996. Back then, it sold its products through retailers like Sears and CompUSA. The competition rife did not favor the company, as the band deteriorated, and the market shrank. The company thrived upon entering the retail market. By operating direct-to-customer retails, Apple’s success penetrating the market was the reason for the downfall of GateWay and CompUSA, two businesses that competed with Apple for the market share.

Apple’s growth is accredited to its change of perception and attitude towards retail marketing. The innovations brought in its products appealed to its customer base. Marketing strategy on its products and well as professional development to its customers are reasons for the company’s soar in the highly competitive market.

Competitive Environment

Apple Inc has grown to be a giant in the rapidly growing technology sector. The company’s business of manufacturing and marketing varieties of computers and electronics faces fierce competition from other brand s like Samsung. Apple's muscular brand strength has provided the company with excellent visibility. Product brands and the interrelationship between products ensure the other patronage to the company’s list of innovative products (Takamura, 2011). Apple's strong brand has enabled it to dominate the market, as it is associated with quality products.

Samsung does not have the enormous margin of the phone that Apple enjoys. The fact is that Samsung has a broader market share than Apple. Apple’s phones sell for more as the company’s share price has risen. Apple has been able to stay ahead of the rest because of its strong integrated supply chain (Montgomerie and Roscoe, 2013). The company’s partners in chip manufacturing, entertainment industry, and marketing provide the company competitive advantage of its rivals. At the same time, its premium pricing strategy and minimum discounts have been applauded by customers (Kuratiko et al., 2014). Apple provides customers with a –high-value product with unique features. Apple offers a high-price strategy to set a benchmark for business rivals and to reinforce the notation of added quality.

Market Cycles

Competition between Apple and Samsung depend on market condition and market cycle. A slow market cycle refers to the scenario when the company maintains a shield over the marker and maintains a monopoly in a manner that competitive pressures cannot penetrate the market (Hitt, Ireland, & Hoskisson, 2020.) Fast market cycles involve competitors in the same market, offering a similar product for the target customers.

The competition will always be present as long as there are competitors around. In a fast-cycle market, the company's competitive advantage is protected from imitation, and the competitive advantage would not differ because imitations happen, quickly and inexpensively. In a fast-cycle market, competitive advantage is not suitable while in a slow-cycle market, a company, like Apple, maintains a monopoly and controls the market (Samuelson, 2016). In this manner, competitors are not able to make decent profits in the market.

Conclusion

Apple Inc is a classic case of employment of critical organizational tools to enhance profits. The business, from its humble start, grew to a reputable brand with a strong influence on the market. The company's own business-level Strategy to compete with other brands worked out successfully. By leading in innovation, and ensuring uniqueness as their competitive advantage, Apple has been able to control the market and set unmatched standards in the highly competitive market. The company has battled lawsuits with Samsung, a business competitor of whom it has accused of imitating their products. Corporate level strategy in having an efficient retailing system has involved online stores, and physical stores with proper mechanisms to ensure customer satisfaction. This unmatched customer experience, and the quality products released by the technology firm has helped it acquire a larger market share. Apple’s products still remain a choice for many, as the value of money is proportionate to the quality of the products. The company's success can be attributed to the organizational culture of innovativeness, and proper Strategy laid at both business and corporate level.

References

Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and Cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning