This has been demonstrated in the launch of the iPad Mini that represented a response to the market availability of smaller tablet computers, the iPhone Plus that corresponded to the popularity of phablets that were first popularized by Samsung, and hardware updates to the Mac and MacBook line of computers that followed updates from third-party hardware suppliers, including processors from Intel.
Of course, it is also worth mentioning that the overall product and innovation philosophy of Apple are transmitted across the entire product and service lines through complementation. In reference to Apple’s recent advancements, Jobs said, “We are going to do for digital creation what Microsoft did for the office suite productivity.” That is indeed a bold statement. Mathis, Joel. This article highlights the production and innovation strategy, marketing and branding strategy, and manufacturing and supply chain strategies because they are very prominent and critical in the success of the company. Since companies pursue niche markets, there is a reduced threat of rivalry among industry competitors. There are four primary organizing dilemmas when considering product differentiation as a strategy.
This uniqueness gives them a competitive advantage since they are able to carve a market niche where there is low competition. When Jobs returned in 1996 to lead Apple, his first order of business was to discard all unprofitable products and realign product development and innovation initiatives based on a new philosophy: simplification. Essentially, the extensive but controlled product portfolio of the company creates and maintains a uniform user experience. We were just fat cats living off a business that had no competition.” – Jean-Louis Gassee, Be CEO and ex-CEO of Apple, admitting he made a strategic mistake. The halo effect means that aside from selling products, Apple is also selling a lifestyle built around its premium technology-based brands. However, its links with other firms have been limited, as we will discuss in the next section on strategic alliances. In the case of Apple, there was the opportunity to manage risk and share costs facilitate tacit collusion , and manage uncertainty. If there are socially complex relations among partners and there is no direct duplication, the strategy is difficult to imitate. A company attempts to make its strategy a sustained competitive advantage. Apple had one of its critical points in history in 1999 when it introduced the iBook. That was a mistake. Accessed September 26, 2016. http://investor.apple.com/financials.cfm, Capozzi, Maria.
In 1998, Jobs stated that Apple’s strategy is to “focus all of our software development resources on extending the Macintosh operating system. Instead, hardware parts such as display panels are either bought from third-party manufacturers, and propriety hardware such as the processors found in the iPhones and the iPads are manufactured by outsourced companies. Hire a Writer This completed their “product matrix”, a simplified product mix strategy formulated by Jobs. What’s Responsible for Business Success or Failure? Note that although the Apple II and the Macintosh received initial success, they were subsequently pitted against personal computer products from IBM.
The company most revered brands are Mac, iPad, and iPhone. Our website uses cookies to provide us with data and information that can help us understand our website traffic, customize advertisements, and improve user experience and service delivery. This is central in cult marketing nonetheless. Design for Manufacture and Assembly (DFMA), Customer Confidence Winning Strategies Adopted by Organizations, Important Soft Skills for Workplace Success, The SCP Paradigm - Structure drives Conduct which drives Performance, Kerzner Project Management Maturity Model (KPM3), Organizational Project Management Maturity Model (OPM3), Looking After Your Well-Being When Traveling for Work, Apple Computers Inc is considered to be one of the innovators in the computer industry, Case Study of McDonalds: Strategy Formulation in a Declining Business, Case Study: Causes of the Recent Decline of Tesla, Roles and Responsibilities of Human Resource Management, Interview Method of Data Collection in Research, Nature and Importance of Managerial Principles by Henri Fayol, Different Products and Services Offered by Banks.
A strategic alliance can be a sustained competitive advantage if it is rare, difficult to imitate, and the company has an organization to exploit it. Apple also alternates between a lean supply chain strategy and an agile supply chain strategy depending on current market requirements and industry trajectories. The company does not own and operate manufacturing or production facilities. For example, Apple only caters for customers who are comfortable using the iOS operating system, which means it does not have to engage in fierce competition as witnessed between phone brands that operate on the Android platform. Because each product complements one another, consumers would usually choose to stick with Apple rather than buying different products from different manufacturers and create a hodgepodge of diverse product and user experience. Full control is also another notable feature of the supply chain strategy of Apple. This article provides a concise analysis and discussion of several critical strategies employed by the Cupertino-based company. With all of Porter’s Five Forces lower, a company may see economic value from a product differentiation strategy.
The introduction of the desktop computer Apple II in 1977 essentially marked the beginning of personal computing for mass consumption, as well as the foray of the company into consumer electronics. In 1997, when Apple was seeking a CEO acceptable to Steve Jobs, Jean-Louis Gassee (then-CEO of Be, ex-Products President at Apple) commented, “Right now the job is so difficult, it would require a bisexual, blond Japanese who is 25 years old and has 15 years’ experience!” Charles Haggerty, then-CEO of Western Digital, said, “Apple is a company that still has opportunity written all over it. Managing uncertainty, managing risk, and sharing costs are sources of economic value in any industry. Jobs despised licensing, calling cloners “leeches”.
[2] The discussion herein will focus on analyzing Apple’s business strategy to establish how it has been able to stay on top of the competition. Having a policy of experimentation and a tolerance for failure resolves the commitment to market vision dilemma. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. To continue a product differentiation strategy, Apple must continue its appropriate management of innovation dilemmas and maintain the five leadership roles that facilitate the innovation process.
Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. In addition, the company was also instrumental in ushering in the era of smartphones and tablet computers with the introduction of iPhone in 2007 and iPad in 2010. The corporate level strategy of apple is mainly innovation of the various products thruogh the internal process, corporate classical innovation, and merchandise innovation.
In fact, I believe it served as the base of Jobs’ strategy for Apple, particularly after he rejoined the company in 1997 and went on to oversee projects like the iPod and the iPhone.
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