Apple Inc. Generic Strategy
Different companies employ different strategies as a way of gaining a competitive advantage against the competitors. The strategies vary in that each company employs a strategic approach that is customized to suit the needs of the company based on the environment it is operating within (Tanwar, 2013). Michael porter’s generic strategies can be embraced by any (Multi-National Enterprises) MNE to gain a competitive advantage. As such, the company crafts different strategies to outweigh the competitors. Apple Inc. is one of the MNEs that has remained unique in the PC sales industry.
Through the low pricing strategy, Apple Inc. analyzed the computer market to seek a strategy of meeting the customers’ needs while benefiting profitably. The high price of the pcs was one of the factors discovered hence Apple Inc. tailored design to meet these needs. As such, it designed iBook computers and iMac computer which had a pricing relatively low hence meeting the needs of basic computer users (Li & Zhang, 2013). Another strategy utilized by Apple Inc. is the use of the best cost providers where the good product attributes are incorporated into the company’s products and services. The company incorporates iPod digital music player to its devices, which give the Apple Inc. pcs users a value for money (Apple.com, 2017). Using broad differentiation strategy, Apple Inc. differentiated into two market segments. The professional market and the consumer market. Apple produces computers that suit the consumer market through sales of pcs, which do not possess many complex functions. It produces pcs for professional purpose where most of the organizations purchase these devices for running their operations. Combining multiple strategies as done by Apple Inc. ensures strategy business success as argued by Tanwar (2013) where he asserts that, “combining a market segmentation strategy with a product differentiation strategy is an effective way of matching your firm’s product strategy…” (p. 12).
Strategy Alliance generic business strategy that is established by two or many companies as a way of creating a business relationship that aims at cooperation for a mutual need of achieving an objective common to the companies in the alliance. Strategy Alliance is one way of increasing the competitive strength of the companies while supporting the weakness of each company (Tanwar, 2013). An example of a strategic alliance evidence through Apple’s Inc. operations is the partnership between Apple and SAP. The partnership aimed at revolutionizing mobile work combines the apps of both iPad and iPhone worth those of SAP HANA platform (Apple.com, 2017). This partnership aimed at bringing security and innovation of iOS was aimed by Apple Inc. to capture the SAP HANA platform to develop capabilities that the IOS pcs can deliver hence increase the competitive advantage of the company in this domain.
Apple Inc. uses outsourcing as another generic strategy for gaining a competitive advantage over its competitors. Although the company has been outsourcing in China, Mail Online (2017) reports that “Apple has asked one of its Asian partners who helps assemble its signature product, the iPhone, to begin examining the possibility of moving production to the United States.” (par. 2). Outsourcing is of benefit to the company through the reduction of labor costs and the increase in efficiency. In addition to this, it is beneficial to the company since it reduces many risks of conducting all the business operations in one place and ensures the focusing on the core objectives of the company hence giving it a competitive advantage (Oshri et al., 2015). However, the main reason for outsourcing is cutting on the production cost.
References
Apple.com. (2017). Apple – Press Info – Apple & SAP Partner to Revolutionize Work on iPhone & iPad. Retrieved from http://www.apple.com/pr/library/2016/05/05Apple-and-SAP-Partner-to-Revolutionize-Work-on-iPhone-and-iPad.html
Li, C., & Zhang, F. (2013). Advance demand information, price discrimination, and preorder strategies. Manufacturing & Service Operations Management, 15(1), 57-71.
Mail Online. (2017). Apple is ‘looking into assembling iPhones in the US’. Retrieved from http://www.dailymail.co.uk/news/article-3947626/The-Trump-effect-Apple-looking-assembling-iPhones-outsourcing-abroad.html
Oshri, I., Kotlarsky, J., & Willcocks, L. P. (2015). The Handbook of Global Outsourcing and Offshoring 3rd edition. Berlin: Springer.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and Management, 15(1), 11-17.
