The Business Strategy of Apple

Running Head: MANAGEMENT 0
MANAGING BUSINESS STRATEGY

MANAGEMENT 1
1 Executive Summary
This report outlines the business strategy of Apple, which is a top American multinational
corporation known for its high-quality products and services all over the world. The company
has a long and big product portfolio in many industries, which also makes the company
leader in their market segment.
Apple has managed to generate significant value in the extremely competitive market by
differentiating its products to those of competitors. The company is known for its premium
products, quality design and superior customer service that has also created distinct image in
the mind of customers.
For explicit understanding, various aspects are being analysed such as basis of their
competition, strategic group, value chain analysis, resource-based view, culture web of the
company and stakeholders perspectives.
Apple has many opportunities in future if they are successfully bringing new innovative
products and strike with the latest preference of customer demands.

MANAGEMENT 2
Table of Contents
1 Executive Summary................................................................................................................1
2 Introduction.............................................................................................................................3
Overview of Smartphone Industry.........................................................................................3
(i) Market mission of Apple.................................................................................................4
(ii) The basis of Competition................................................................................................4
(iii) Strategic Group Analysis................................................................................................6
Apple Inc. Industry Forces and Attractiveness......................................................................6
3 The activities and resources of the company..........................................................................8
Resource-based view..............................................................................................................8
Value chain analysis...............................................................................................................9
(iv) The Culture Web of Apple............................................................................................11
(v) The stakeholders of Apple............................................................................................14
4 Recommendations and Conclusions.....................................................................................16
5 References.............................................................................................................................17

MANAGEMENT 3
2 Introduction
Apple is an American organisation that designs and manufactures various electronic items
like computer hardware and software and thus best known for its extreme customer loyal
base. Apple headquarters is situated in California, U.S. The company currently serving 25
countries worldwide. Steve Jobs, Steve Wozniak and Ronald Wayne founded the corporation
back in 1976.
Apple has different segment in its product and service portfolio including Macintosh
notebooks and computers, iPhones, iPads, Apple Watch, software (I tunes and various others
application software), servers and various others peripheral products. In 1980, the company
was first issued its initial public offerings of investment stock. The company is selling their
product as premium price based which using skimming pricing strategy. The revenue of
Apple was stated to be about $ 53.3 billion at the third quarter of 2018 (Xia, 2018).
Overview of Smartphone Industry
Apple is operating in many industries and so for explicit understanding, it is not possible to
project all those industries. However, on the major selling product of Apple i.e. iPhones,
smartphone industry is selected for further overview.
A smartphone is termed to be advanced mobile phone that has a more capability and
connectivity as compared to usual feature phones. It can also be defined as a handheld
integration of computer with mobile. The total of smartphone customers is projected to raise
from 2.1 billion in 2016 to nearby 2.5 billion in 2019 (globenewswire, 2019).
In the smartphone industry, many numbers of companies are involved in the manufacturing
of their respective products such as Apple, Xiaomi, Samsung, Huawei, HTC, Sony and many
more. Since 2009, Apple has been amongst the top 5-smartphone vendors. In the smartphone
industry, Apple has reliably been the next rival of Samsung. The sales of Apple iPhone is
continuously increasing from nearly 170 million units in 2014 to almost 216 million iPhones
sold in 2017 (statista, 2018). This latest development of Apple smartphone can be said to as
stable and reliable performance and with considerable improvement.

MANAGEMENT 4
(i) Market mission of Apple
Apple mission statement mainly sumps up the innovative products and their technological
value including quality and unmatched performance.
Their mission statement states that – “Apple is devoted to passing the best personal
computing experience to creative professionals, apprentices, customers and around the
domain through its innovative software, hardware and Internet offerings”.
The mission statement of company states the objective for which their corporation exists.
Apple is into both personal and professional offerings. The company is also known for its
great hardware and software that delivers unmatched performance (Farfan, 2017). This
dynamic and competitive environment help Apple to opt for more detailed mission statement
than the one founded by Steve Jobs. Their mission statement focuses on the quality of
products in align with actual and perceived benefits.
(ii) The basis of Competition
Apple manufactures and makes varieties of computers and consumer electronic products
including smartphone, Mac book and music players. In their business history, there are many
reasons for their success, however, some of dominant themes can be explored for their
astounding success. These themes are explained with the help of Porter generic framework
which helps the management to know that – ‘how an enterprise pursue competitive advantage
across its preferred scope’ (Richardson, 2008).

MANAGEMENT 5
It is usually accepted that organisation who possesses high market share are successful as
they followed a cost leadership strategy. However, there are some enterprises like Apple who
gains profit from low market share and by segmenting their market on small but profitable
niche.
Considering much organisation, cost strategy is the first choice to be focussed upon.
However, Apple is not the leader in this quadrant. Apple has not met demands of the market
while implementing cost strategies; its biggest tool is the innovative use of differentiation
strategy. Apple is known for its innovation and also has gained profits mainly through
product differentiation. Steve Jobs when returning in 1998, use and apply the theory of –
“user-friendly and personalised computers” so as to save Apple from a sinking ship
(Isaacson, 2012).
Product differentiation is a feasible strategy mainly if the enterprise exploits its abstract
distinctions (Teece, 2010). In case of Apple, these include premium product features and its
brand image as an innovator. Considering differentiation strategy of Apple products, various
products like power Mack book, iPod digital music player, cellular iPhones, peripherals and
other software are introduced by the company in extent to advancement in technology. This
constant application of differentiation strategy will help Apple to gain competitive edge over
the competitors.
As Apple follows differentiation strategy, it also created an entry barrier to their competitors
due to its high customer loyalty and unique products. It is also difficult and rare to imitate the
product differentiation strategy for any organisation and also economically valuable. Apple
has been a leader in this strategy and thus utilized its current advantage in the whole industry.
In porter generic strategy, an organisation can use focus group also to gain competitive
advantage (Zahay and Griffin, 2010). In case of Apple, Steve Jobs when returned has
executed various cost-saving measures, by exploring the core competencies and coordinate
with those of firm core product lines. He also ceases those product lines, which are running or
causing a loss.
Apple decided to concentrate on two markets i.e. consumer and professionals. The company
had developed the core strengths of understanding its customers and developing products to
improve their “digital lifestyle”. This also signifies the Apple success in today’s market
(Norman, 2015).