Business Strategy Report: Apple's Positioning and Competitors Analysis

This report provides a comprehensive analysis of Apple's business strategy, examining its market positioning in comparison to competitors like Sony and LG. The study utilizes the SPACE matrix to assess Apple's strategic position, considering factors such as financial strength, competitive advantage, and industry dynamics. The report delves into Apple's business model, highlighting its focus on value proposition, distribution channels, key resources, and strategic partnerships. It also includes a review of Apple's financial performance, including revenue and profit trends, and evaluates its strengths and weaknesses. The report concludes with an assessment of Apple's future outlook, providing insights into its potential for continued growth and success in the competitive technology market. The report is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
PART 2............................................................................................................................................4
PART 3............................................................................................................................................9
.......................................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategies are the directive path which supports entity in achieving objective. It
is an interactive process which assist managers to run smoothly in such competitive corporate
market. It is very essential for the success of the enterprise as it helps to improve activities of the
company so that operations can be done easily, it aids to address the problems so that key
persons can make plans to overcome from these issues. For the present report Apple is being
taken into account which is an international technology company which provides attractive
electronic products and services to consumers (Chi, Zhao and Li, 2016). Current assignment will
discuss the positioning of Apple and it will compare its positioning with its rival brands which
are Sony and LG. Business model will be illustrated in this study. In addition to this, future
scenario for Apple will be covered in this report.
PART 1
SPACE matrix is the tool which helps to analyse company positioning so that it can be
identified that which type of strategy will be the best suitable for the organization. It is
completely depends upon the competition, point of views of customers, performance of company
etc. It is divided into four dimensions; conservative, aggressive, defensive and competitive. The
position of the entity can be analysed by using internal dimensions which are returns of its
invested money, operating leverage of the organization, liquidity worthiness of the firm, working
capital and cash flow (Chrisman, 2015). By this way financial strength of the organization can be
identified. TO gain information about the competition so market share, quality of products, life
cycle of goods, technological innovation, supply chain of the corporation can be give authentic
results about the actual worth of the entity. By this way managers will be able to formulate
effective business strategies which can help to improve its position in the market. External
dimensions can be identified by looking upon the environmental stability of the company and
industry strength.
Apple is an international public limited company which is well known for its attractive
features and unique designs. Technical innovation and creative advertisements have given this
brand global presence (Lussier and Corman, 2015). Apple is the well know brand across the
world. It is famous for its extra ordinary services and unique features. Brand personality of
Apple gain attention of customers. This premium brand meets the needs of consumers. Even in
such competitive world people need to use such innovative gadgets which is provided by the
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organization. It high class I-pad can other products have made its unique positioning the mind of
consumers. Apple uses product positing strategies, as its products are gaining competitive
advantage. In the modem \era people wants highly advanced gadgets which can satisfy their
needs of using cell phones. Apple ofers same products in the market which gain attention of
consumers (Geroski and Machin, 2013).
Sony is the biggest competitor of the cited firm. Its attractive advertisement strategies and
campaign promotes the brand position across the world. It Z3 serious have given huge success to
the organization. It uses pricing positioning strategy, it offers wide range of products to
consumers. Its low price phones and electronic equipments can be afford by all type of
consumers. That is why middle class people prefer to Sony. It used social media effectively to
promote its brand and to make impressive position in the consumer's mind.
Sales records
Apple has reached to the next position in its sales, it has broken all previous records of
the competitor brands. Apple's iPhone six has become the second biggest market across the
world. I phone 7 was the biggest selling device and has made the latest record of sales of phones.
According to the latest data cited firm has jumped 40.5% in end of October. In the initial month
it was 33.5% (Thomé and Medeiros, 2016). It has command over 51.7% Japanese market, 44%
in Britain and in UK 40.5%. It smartphones has increased the sales of the Apple 10.5% even now
people are unable to get iPhone 7 easily.
In the year of 2013 Sony market share was 2.1% but over the year attractive designs and
unique features have helped the firm in increasing the overall sales of the organization. In the
year 2014 it reached to 29.5%. In the year 2015 in UK Sony has reached to 31%, it has captured
the good market share. But as population were more focused on quality and innovative products
thus, they were diverting towards the Apple but Sony also gin great attention of consumers.
Market share of Sony in the year 2014 was 7.6% whereas Apple was having 41.8%. Over the
year both the firms have grown well and increased their sales (Brown, 2016). Even consumers
are highly satisfied. Sony focuses on all range of people thus, offers hem wide range of attractive
products. Apple concentrates on premium consumers thus, it involves attractive features in its
phones. In 2015 Sony share was reached to 8.3% whereas Apple has come to the new hight
which is 52%.
Comparison of positioning
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KPI Apple Sony LG
R & D / patent 1 3 2
R & D / Employees 1 3 2
Rev. / Employees 3 2 1
Profit / Employees 3 2 1
Profit / Patent 3 1 2
Revenues 3 2 1
Profit 3 1 2
Total 17 14 11
Mean Score 2.42 1.75 1.37
Index
KPI Apple Dell Lenevo
R &D / Employees 1 2 3
Rev. / Employees 3 2 1
Profit / employees 3 2 1
Revenues 3 2 1
Profit 3 2 1
Total 13 10 7
Mean Score 2.6 2 1.4
As Apple is on top but there are several implications are being attached as being on top in
term of positioning. By creating market entry barriers it can gain control over the competition
and can enhance its sales to great extent. As it would be good for Apple as by this way it will be
able to gain high returns on its investment. As Apple is using proprietary technologies and
ongoing innovation in its products manufacturing, by this way consumers are very attracted
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towards the brand (Kung and Zhang, 2012). By this way new enter companies can not over take
the firm easily that will help Apple to maintain its positioning in such competitive market.
As Apple has sound economic position, it is the great implication of being top in
positioning. By this way no other competitor can not offer such high quality technical electronic
products which Apple is providing. It helps to strength its position and be the leader in the
market. But cited firm has to invest more in research and development so that it can identify the
needs of consumers and can involve the latest technologies for manufacturing such smart phones.
To maintain its position it has to invest much amount in R & D, by this way budget of the
company can get increased. Apple has ability to reduce its operational cost by this way it can get
high profit. As large number of audience are waiting for purchasing the smart phone of the cited
firm. So large number of production of the items help the entity to reduce its cost. By this way
profit margin of the enterprise get increased.
Evaluating index
From the calculation it is found that index value of Apple is comparatively good.
It can be said that Apple's patent growth is good over the last five years so it can be said that it is
performing well in the electronic market (Galpin, Jouflas and Gasta, 2014). Mean score
shows that Apple is doing well it has the highest mean score, its profit and revenues are higher
than Lenevo and Dell.
PART 2
Business model is the method which can support the entity to sustain in the market for
longer period. It is directly linked with the generation of revenues. It is the conceptual structure
which includes policies and procedures of the company. The purpose of using business models in
the organizations are to focus on goal, review time to time the operational practices and ensure
that these activities give optimistic outcome to the entity (Hussain and et.al, 2013).
Apple is using the business model, it helps to describe the capabilities and ability of the
firm. Its main purpose is to build strong relationship with consumers and suppliers. Apple
concentrates more on value proposition, it focuses on features, functions, designs of the products,
after manufacturing a satisfactoriness valuable smartphone cited firm distributes it to end users.
Distribution channel of Apple are its retail stores and online services. To build strong bonding
with customers cited firm focuses on providing them satisfactory services. Apple has its own
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website through this Apple promotes its products and offers attractive discounts to customers so
that they can trust on the firm and can be loyal towards the brand (Vignali, 2015). It offers them
iTunes, online assistance so that people can take interest and develop their bonding with the
organization. Key resources of the corporation are innovative designs, comfortable technologies,
easy to operate this operating system and its warranty are the highlighted points of the products
of Apple. Strategic partners of cited firm are manufactures, app store developers, cell phone
providers, software companies etc. Its target market is young generation as they have more
interest in such advanced electronic devices. Then it focuses on professionals those who belongs
to high class because all products of the company are prime.
Apple has sufficient resources, it has adequate technical, monitory, human resources
which support the firm to remain the leading brand in the competitive environment. Current
assets of the Apple is 290479 in the year of 2015 (Bamford and et.al, 2015). Apple has made
partnership with Deloitte which is the consultancy firm and working worldwide. Apple has
partnership with IBM and IBM creates app for the Apple for its I phone and I pad. But in May
due to business purposes firm had to look for the revenue stream then it has made partnership
with Deloitte.
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Illustration 1: Business model
Source: (Schiele, Harms and Banerjee, 2014)

Qualitative and quantitative KPI's are included in the business model which help to
measure the success of the company to great extent. Over the five years it has been seen that
revenues of the company is growing continuously. In the year of 2012 its revenue was 156508
but in 2013 it has increased and reached to 170910. But due to high demand of the smartphones
in year 2014 it increased to 182795, in 2015 it was 233715. But due to economic drop down and
currency fluctuation its revenues have been get down in the year of 2016 and reached to
2015639. It is expected that Apple's revenues will grow in coming years speedily (Shanbhag,
Dutt and Bagwe, 2016). In the year of 2012 its gross profit was 68662 but in 2013 it decreased
and reached to 64304. In the year 2014 it has increased 70537 and in 2015 it reached to 93626.
So it is clearly shown that approx growth in profit is profit of the Apple is raising sine last three
years but in 2016 due to excess competition and huge prices its profit has got down and reached
to 84263.
Strength of Apple is that it is the market leader and it has variety of products and services
for consumers. Strong brand image and its financial worthiness have made the brand popular
globally. Strong distribution channel and high interest of consumers have created the leading
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Illustration 2: Business model
Source: (Schiele, Harms and Banerjee, 2014)

position of the firm. But Apple has few weaknesses and because of these, it has reduced its profit
in the year of 2016. As its all products are of high range so only limited people can buy it. Since
many times there is no improvement in its versions of products (Qiang, 2014).
Core competency of Apple
Core competency of Apple is its innovative designs and latest technologies. Smartphones
of Apple have GUI users, they have digital media players, high quality camera, internet clients,
GPS navigator etc. As Apple delivers superior customers services to its clients that make people
loyal towards the brand. It is the leading brand it has adequate resources and it uses its sources
effectively to generate profit. Product differentiation is the another core competency of the cited
firm. It offers iPod, iTouch, iTV, iPhone and also it is engaged in manufacturing apps and
software's. Customer loyalty is the competent feature of the brand, as end users can check the
features of the phone on stores then they can make their decisions whether to buy or not (Schiele,
Harms and Banerjee, 2014).
Marketing and sales of the company is its core competency, as cited firm advertise its
products in unique way so that service users can get attracted towards the brand. It manufacture
products as per the needs of end users that helps to gain attention of them and to increase profit
of the corporation.
Core competencies of Apple
Innovative designs Apple involves attractive designs in its
products. GUI interface, GPS navigators etc.
are innovative designing parts used by the cited
firm in its product.
Advanced technologies It adopts the latest machineries and
technologies so that it can meet with the needs
of consumers and can attract them towards the
firm.
Excellent customer services Apple delivers effective services to its end
users, it offers them warranty and Guaranty.
Adequate resources It has sufficient human resources, those who
are capable and well talented. Company has
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adequate financial resources that why it adopts
the latest technologies immediately.
Product differentiation It offers different type of products such as
iPod, iTouch, iTV etc. to satisfy the needs of
all consumers.
Customer loyalty As it provides quality services to customers so
they are loyal towards the brand.
Marketing and sales strategies Its advertisement strategies, online marketing
techniques are unique and attract youngsters.
Key resources of Apple
Key resources include tangible, intangible resources. Apple brand value, physical assets,
patent, strategic partners, advertisement strategies, human resources are main key resources of
the organization.
Main assets of Apple
Cash in hand, inventories, marketable securities, deferred tax assets, properties, plant, good will,
equipments are main current and non current assets of the cited firm (What is the Ansoff Matrix?,
2013).
Core competency, key resources, assets tell about the financial worthiness of the
company. Apart from this, it defines that Apple is working well, it has skilled people those who
contribute their best efforts for accomplishing the goal of the company. Assets shows that Apple
has sufficient worth and it can operate its business smoothly.
Name of company value Reason of acquisitions
Camel Audio Audio As firm was well known for its
sound libraries so this merger
was the reason for improving
sound quality of smartphones
of Apple.
LinX Advanced camera technologies For improving the camera
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quality of the phones and Ipad
it has acquires this small firm
so that it can use its
technologies.
Coherent Navigation Mapping software As it can attract more
consumers so it has GPS
navigator system so it was the
good deal for the organization.
VocallQ Speech technology As acquisition could enhance
sales of the Apple so it merges
with this and it has replaced
the old mapping with the latest
technology of Google map.
IBM Data storage, Big data and
analytical values
As IBM was repurchasing its
stocks so it was the good deal
for Apple by this way it could
be able to enhance its market
share.
The strategic purpose of acquisition was to enhance market share of both companies. Advanced
technologies, big data, cloud computing were the values which were added. Yes it makes sense.
After merger it has enhanced the position of Apple. It was the good deal as it has made the
technical position of the Apple sound so it became able to provide advanced smartphones to
consumers (BCG Matrix, 2016).
PART 3
Apple is working well currently it has leading position in the market. Its strategic group
position is high. Apple can use KPI model by this way it will be able to analyses its performance
over the years and can plan to improve its revenues and profit. It will help to strength its position
in the corporate market and it will be able to gain competitive advantage.
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Apple uses innovation methods to expand its business. Its creative and innovative
technologies attract more consumers towards the brand. Currently it is using the growing market,
as its consumers are loyal towards the brand and are very satisfied (Qiang, 2014). That is why it
has great opportunities to expand its business worldwide. As present position of Apple is very
strong, for grow well in future also Apple needs to make effective strategies which can help in its
expansion.
GENERIC STRATEGIES BCG STRATEGIES ANSOFF
LCB LCF DB DF B H HAR DIV PD MD PEN DIV OR
G
LIV LIC ACQ
Total 83 97 95 94 105 84 97 83 104 84 87 107 79 82 94 105
TRA
TEG
IES
S1 ✗ ✗ ✗ ✗
S2 ✗ ✗ ✗ ✗
S3 ✗ ✗ ✗ ✗
S4 ✗ ✗ ✗ ✗
S1 1LCB+1B+1DIV+1ACQ
S2 1DB+1HAR+1PD+1LIV
S3 1LCB+1H+1MD+1OR
S4 1LCF+1DIV+1PEN+1LIC
Ansoff matrix model will be the best suitable for the Apple for future growth of the
company. As current position of the cited firm is sound so by following this model it will be able
to expand well. Model includes four strategies market development, diversification, market
penetration and product development. As Apple is the leading brand so it should concentrate on
market penetration as by developing new marketing strategies, cited firm will be able to gain
attention of end users to great extent (Vignali, 2015). It will help to enhance sales of the product
effectively. It can formulate the strategy of loyalty scheme, special offers to promote brand well.
As it is well known brand so by promoting products well company will be able to expand its
business to great extent. Market development is another great strategy for Apple as people are
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