Business Strategies of Apple Company - Essay Example

?Apple Strategic Report Apple Company is a technology-based company, which specializes in producing only the best technology products. They mainly deal with such technology products such as desktop computers, laptops, phones, and iPods. This has enabled this company straightforwardly establish a niche as one of the best technology companies in the world and has repeatedly been used as a benchmark in developing new technology. This has been done using the quality employees who they employ. In recruiting the new employees, Apple does not necessarily follow what most companies have been doing. Contrary, Apple looks for great sales persons who have been using their products and have consequently developed a likeness of the same. By doing this, they help differentiate true enthusiasm and the salespersons believe in the products. The company has gone further to invent black cards. This strategy is to be used by their customers whereby they can issue black cards to their employees. The cards have an Apple emblem and they contain some written materials on the sidelines. This card directs the Apple customers to talk to the company. On the rear side of the black card, it recommends the Apple customers to fill in, whereby they indicate, whether they have received good customer service or not. Moreover, the company has also developed an idea of a store within a store. This has been achieved through the setting up of Apple shops in big departmental stores and supermarkets such as the Best Buy. They have also placed Apple consultants at this shops whereby they train employees about their brands and all others (Apple Inc., 2010, p.1). For Apple to climb to such heights, the company has developed a distribution and market segment that has overseen the brand name attain global recognition. Through its distribution and marketing segment, the company sells its product throughout the world using online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. The company also sells to consumers, of large-scale and small-scale, and small and medium sized business, creative customers, education, enterprise, and the government (Apple Inc., 2010, p.1). Business Strategies Apple has employed high standard of business strategy, which are followed by all members of the institution. This is done because the company is committed to delivering nothing but the best personal computing, moveable digital music and moveable communication practice to customers, scholars, instructors, commerce, and administration agencies through its groundbreaking hardware, software, peripherals, amenities, and internet offerings. The company’s business level strategies shows the companies unique ability to come up with, and develop the companies own operating system, hardware, application software, and services to deliver its clienteles different products and elucidations with superior ease-of-use, seamless integration, and innovative industrial design (Apple Inc., 2010, p.1). This company believes strongly in the need for continued investments in research and development. The reason is that the development of this will enhance innovativeness in its products and technologies. In the business level strategies, the company considers the use of cost leadership. This is done in order to compete for a wide customer base, which is usually based on its prices. However, the products developed by Apple are expensive for moderate people in other countries outside the US. Nevertheless, these prices are based on internal efficiency so that the company can form a margin, which will sustain above average returns and cost to the customer so that customers will purchase Apples products. This happens since the technology sector is standardized whereby if a company fails to achieve certain targets, other rival companies will surpass it. Some of Apples largest competitors are Samsung and HTC. However, there has been a continuous effort to lower the cost to be relative to customers (Apple Inc., 2010, p.1). To achieve the cost effectiveness, Apple has based itself on fully implementing the Porters five forces models. The objective is to remain profitable when factors such as competition, new entrants, suppliers' power, substitute products, and buyers' power are taken into consideration. Being a well-established firm, the competitors also known as rivals, are likely to avoid a price war, since the low cost firm will continue to earn profits after competitors compete away their profits. Moreover, there are powerful customers who force the firms to produce products at a lower cost thus lowering the profit margin of the business. These powerful buyers may force a company out of business. Apple Company has gone ahead to establishing their supply links in order to absorb are likely to avoid a price war, since the low cost firm will continue to earn profits after competitors compete away their profits. Furthermore, the company has dealt with the threats of new entrants favorably through creating barriers such as patents rights and copyrights. It has also ensured that the threat of substitutes does not attain their high level and quality products (De Swaan, & Waalewijn, 1999, p. 5). The company has also embarked on differentiation in order to provide value through unique features and characteristics of the company’s products. This has been achieved through lowering buyers' costs, raising buyers' performance, and ensuring Sustainability. In addition, the company focuses on low cost products. This is because the company does not only compete on price, but also selects a small segment of the market to provide products. In addition, the company has focused differentiation. This is because the company not only contends based on differentiation, but also selects a small segment of the market to provide products (Hill & Jones, 2009, p. 5). Source: Notes Desk, Porter’s Five Forces Model However, this report has learnt that other issues face this company. These issues can be analyzed using the PEST analysis model. Apple Company, as the report learns, has been affected by the political waves on the different nations where it has established a strong customer base. In addition, the company has been affected by the economic factors such as the global recession of 2008, which saw the company earnings and revenue decrease (Bensoussan, & Fleisher, 2008, p.7). Moreover, social issue has contributed greatly to the marketing of the company’s products. Such an example is the sale of its iPod products. Lastly, technological factors have contributed widely to the companies establishment as a pace setter in this sector (Henry, 2008, p.7). Source: SMEHRO, Envisioning strategy, The availability of all this factor have enabled the company to experience equilibrium in timing of entries and exists into the market, as well as the equilibrium output levels, over the industry life cycle. This has widely been affected by the cost of its production and subsequent selling prices to the customers (Yoo, 2000, p.1; Londregan, 1990, p. 446: Baumol, 1982, p. 5) Works Cited Apple Inc., 2010, Apple in the Digital Age from IPod to I Pad, Apple Inc. The Case Study 2000-2010. p. 1- 26 Baumol, W et al, 1982, Contestable Markets and the Theory of Industry Structure, Harcourt Brace Jovanovich, New York. Bensoussan, B & Fleisher, C 2008, Analysis Without Paralysis: 10 Tools to Make Better Strategic Decisions, FT Press, London. De Swaan, H & Waalewijn, P 1999, A Knowledge Base Representing Porter's Five Forces Model, RIBES, Rotterdam Institute for Business Economic Studies, Rotterdam. Henry, A 2008, Understanding Strategic Management, Oxford University Press, London. Hill, C & Jones, G 2009, Strategic Management Theory: An Integrated Approach, Cengage Learning, New York. Londregan, J 1990, Entry, and Exit over the Industry Life Cycle, Rand Journal of Economics, Vol. 21, No. 3, Spring, 446-458. Yoo, Jinsoo 2000, A Theory of Industry Life Cycle, Journal Of Economic Development, Volume 25, Number 1, June 2000. Appendix Read More