Week 8 Assignment 3
Student’s Full Name
BUS499 Business Administration Capstone
Professor’s Name
Date
Week 8 Assignment 3
Introduction
When an organization chooses the type of business or corporate-level strategy they prefer to use, the decision is crucial since it set the tone for its success or failure. Most companies hire a manager to determine the type of strategy suitable for the corporation. Some other companies already have something in place that requires improvement. To be successful with the chosen strategy, they need to know the type of competition out there (Hitt et al., 2013). At most times, the competitor of an organization dictated the type of strategy that best fits the organization. Once the company figures out the type of strategy to use, they take a step further to build a successful corporation.
Business-Level Strategies
Apple Inc. is the company selected to research its business-levels strategy. Apple Inc is ranked as the top American manufacturer of personal computer peripheral, computer software, mobile phones, portable digital music player, and digital watches. The company sells various related software, services, networking solutions, and third-party digital content across America, Europe, Japan, Greater China, and the Rest of Asia Pacific. Since its incorporation in January 1977, Apple has continued to be successful in all its operational areas and is ranked top company by Forbes 500. Apple is a unique company in the computer and digital manufacturing accessories that take time to release products. Apple’s success arises from its strategy of taking time when producing essential products. The company management and employees work hard to perfect the type and style of personal computers and phones to represent the company’s face. Different from its competitors, Apple does not rush to manufacture new products every month. Apple focuses on modifying the quality of the exiting products to meet the needs of its esteemed customers. Apple Inc focuses on its product, which is its primary strength. However, the business-level strategy of Apple has changed from the leadership of Steve and Tim.
The leadership style of Steve Jobs focused on creating quality products. Under Steve Jobs’s leadership, Apple’s strategy was to “develop and sell brand new, innovative products of which blended art and technology to provide a simple and streamlined user experience (Merchant, 2017). The business strategy rose the company to a high level making it the most successful smartphone producer following the 2007 iPhone. Jobs worked hard to prevent Apple from been bankrupt and, at the same time, establishes numerous customers to assist in upgrading its products. Apple managed to gain numerous followers for its other products apart from famous iPhones. The company moved further to innovate tablets and later gained loyalty from millions of customers who loved their products. Under job leadership, Apple used to release its products annually while marketing its earlier products. Through this, the company gained adequate anticipation for new products as customers were expecting better innovations. Apple also managed to attract and keep customers by huddling other product offerings like iTunes and the use of iPhones and iPads.
Tim Cook used a different business-level strategy from that of Jobs. While Job focused on building Apple, which was almost bankrupt, Cook took over the CEO when Apple was already a juggernaut in the tech market (Grossman, 2013). This business-level strategy choice was successful under Cook’s management since it helped the company become most successful in the technology industry. In my view, Steve Jobs could have, through Cook’s strategy, would not last the company for long and would reduce profitability. However, Cook implemented and stuck to the strategy until it became successful. Apple company now leaves its esteemed customer in anticipation of the next unique product that will bring value to the public.
Corporate-Level Strategies
The corporate-level strategy ensures corporations make the right decisions since they have a direct impact on the company. Every corporation must decide what strategy to implement since it generates a company’s success in the long-run (Hitt et al., 2013). The corporate strategy of Apple Inc is to remain technologically competitive in its industry (Montgomerie & Roscoe, 2013). To get a competitive advantage, Apple must concentrate on improving its technology to create better products while enhancing the existing ones. The strategy of Apple leverages its unique ability to design and produce its operating systems, hardware, application software, and services, which offer a new solution with ease-of-use and innovative designs to customers (Aljafar, 2016). Despite going through ups and downs cycles despite its formation in 1976, Apple has achieved the notable distinction of being the first US company to achieve market capitalization (Maverick, 2019). Apple Company has recently opened a store in China, which is a growing market. The market strategy aims at moving further with vertical integration. The expansion of distribution networks allows the company to reach broad customers and provide them with high-quality sales and post-sales support (Montgomerie & Roscoe, 2013). Having both retail and online stores allows Apple to make customers comfortable when purchasing products since it is linked to moving forwards (Wang, 2014). Also, Apple Inc’s corporate strategy success is derived from its long list of digital products like computers, cellphones, laptops, televisions, watches, and software products. In my view, Apple’s corporate strategy has significantly impacted the success of the corporation and has contributed to reaching a high level of consistency and customer satisfaction. Apple has managed to build its reputation globally through its strategy of preciseness when producing products.
Apple Inc is known for its high-level Excellency in the technology industry. Success is attributed to its ability to innovate and bring unique products to high customer loyalty. Apple has managed to deal with the threat of competition in the market place through its unique and quality products (Aljafar, 2016). The company has a unique design of its mobile phones and software, making it easy for customers to use their products and challenging to produce duplicating products. The unique products have also contributed to the building of significant brand loyalty and the establishment of a large customer base who continue using iPhones over other smartphone products from Samsung, Dell, Microsoft, and other competitors (Maverick, 2019). Through this, Apple manages to strengthen its market share position and continue being the technology industry leader. Apple puts into consideration the future needs of its customers in both desire and demand.
Competitive Environment
For any company to succeed and thrive in the current global market, it needs to effectively utilize its innovations by designing products that will give them a competitive advantage. Apple has been in the technology business for over 45 years, and it continues being successful in a competitive environment. Apple needs to develop strategies to deal with the old technology industry and new entrants, becoming a competitive threat (Johnson, 2014). Apple can win competitive advantage and deal effectively with competitive threats by focusing on manufacturing and developing strategies to enhance customer response and work efficiency.
The biggest competitor of Apple in the technology industry is Samsung. Samsung is known in the market for producing numerous smartphones in the market yearly. However, the company fails to reach Apple’s level since it lacks awareness of the right time required to produce a quality product (Makos, 2015). Due to producing many products within a short time, Samsung compromises its quality, and most of its products have issues. Samsung focuses on bringing a new model of smartphone in the industry as opposed to focusing on quality. This is one of the reasons why Apple continues thriving in the market ahead of its competitors. Apple remains a hardware form that uses software and content to push high-end devices’ sales at a high margin (Montgomerie & Roscoe, 2013). The company is looking for better strategies to maintain its new designs like large screen iPads and smartwatch (Johnson, 2014). Apple seeks to maintain its value by innovating new quality products and bringing value to the ecosystem to remain competitive.
The competitive strategy of Samsung entails the quick production of different devices after viewing customer’s needs. According to Samsung, the strategy is the best for the company, and it has helped the company continue making a profit (Makos, 2015). Samsung’s focus is to appeal to both high end and low-end markets. In my opinion, I believe Samsung has not yet managed to reach its market goals, and it needs to put extra effort into its marketing strategy. Samsung’s target market is people aged 15 to 45 from the lower class, middle, and upper class who follow technology trends. Most Samsung devices range from $280 up to $700 making the lower to win most contracts. The strategy disadvantages Samsung since producing and upgrading many products within a short time denies customers an opportunity to enjoy their products (Nisen, 2013). Differently, Apple gains a competitive advantage by producing mobile and computer devices with large screens, various features, and successful marketing that can reach potential and loyal customers (Nixon, 2013). Apple’s target market is Millennials aged 35 to 44 years and one out of four from age brackets of 18-34 who are future potential customers in the next six months (Gaille, 2015). Apple focuses Millennials from the middle class to the upper class since they are willing to pay a premium process for Apple products. Although Apple products are expensive compared to Samsung, Apple allows customers ample time to use their products and provide feedback, which the company relies on when making new products in the future. Once new products are brought into the market, Apple lowers the price of its older products and sometimes gives the product freely of at a throw-away-price.
Market Cycles
In my opinion, Apple’s choice as having the best competitive strategy compared to Samsung would remain the same in both slow-cycle and fast-cycle markets. Apple will continue to be the leading competitor in the technology industry as long as it continues to focus on satisfying customers’ digital needs. Other competing companies are known for designing products with eye-catching hardware and poor software. Differently, Apple does not focus on producing many phones yearly to win competitive advantage. Instead, Apple focuses on producing quality products that serve customers for long (Montgomerie & Roscoe, 2013). Apple’s competitive strategy is based on quality consistency, which leads to the production of perfect products to customers.
People chose Apple products since they satisfy the needs of customers. Apart from quality software, Apple products are easy to use and offer customer service and in-store experience. According to Bajarin (2012), customer service at the Apple store is excellent, starting from greeting, “What would you like to do today?” The sales personnel then goes directly into technology-related questions that interest the customers. Apple does not rush to release new products unless they offer better quality to customers. The strategy has contributed to continuing success different from its competitors whose focus is to produce different products after a few months. Based on Apple’s strategy, the company gains a competitive advantage by working in its product two years before releasing it.
Sources
Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and Cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning
Maverick, J. (2019). Analyzing Porter’s Five Forces on Apple (AAPL). Investopedia. Retrieved September 7 2020, from https://www.investopedia.com/articles/investing/111015/analyzing-porters-five-forces-apple.asp.
http://pestleanalysis.com/swot-analysis-of-samsung/
Merchant, B. (2017). The one device: The secret history of the iPhone. Hachette UK. https://www.theguardian.com/books/2017/jun/29/the-one-device-by-brian-merchant-review-secret-history-of-the-iphone
Johnson, M. L. L. S. F. (2014). The five competitive forces framework in a technology-mediated environment: do these forces still hold in the industry of the 21st century? (Bachelor’s thesis, University of Twente). https://essay.utwente.nl/66196/1/Johnson_BA_MB.pdf
Grossman, N. (2013). Out of the shadows: requiring strategic management disclosure. W. Va. L. Rev., 116, 197. https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=1150&context=wvlr
Nisen, M, (March, 2013). Samsung Has A Totally Different Strategy From Apple, And It’s Working Great. Business Insider. Retrieved September 7 from www.businessinsider.com/samsung-corporate-strategy-2013-3
Montgomerie, J., & Roscoe, S. (2013, December). Owning the consumer—Getting to the core of the Apple business model. In Accounting Forum (Vol. 37, No. 4, pp. 290-299). No longer published by Elsevier. https://www.sciencedirect.com/science/article/pii/S015599821300032X
Gaille, B. (2015, September 28). 18 Key Apple Target Market Demographics –
Makos, J. (2015, October 21). SWOT analysis of Samsung. Retrieved September 7, 2020, from
BrandonGaille.com. Retrieved September 7, 2020, from https://brandongaille.com/18-apple-target-market-demographics/