Strategic Management Report: Apple Inc.'s Competitive Advantage

This report provides a comprehensive strategic analysis of Apple Inc., examining its competitive landscape, internal resources, and strategic choices. It begins with an introduction to strategic management and applies various strategic models, including the BCG matrix and Porter's Five Forces, to understand Apple's positioning and competitive drivers. The report delves into Apple's competitive advantages, such as innovative products, pricing strategies, and a strong supply chain, while also analyzing the company's internal strengths and weaknesses using VRIO analysis. Furthermore, it explores potential industry scenarios and discusses how Apple can sustain its competitive position through strategic resource implementation. The analysis covers key aspects like industry competition, bargaining power, and the threat of substitutes, concluding with an evaluation of Apple's overall strategic approach and recommendations for future success.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK-1............................................................................................................................................4
Understanding of the types of strategy in relation to the schools of strategy and strategic
concepts.......................................................................................................................................4
TASK-2............................................................................................................................................6
Use of the relevant models and concepts, exploring competitive drivers and the impact on the
competitive position of the company. ........................................................................................6
A critical discussion of the company's competitive advantage among its direct competitors....7
Apple's direct competitors are google, samsung, amazon, HP. Apple has various competitive
advantage over its competitors....................................................................................................7
TASK-3............................................................................................................................................8
Use of relevant internal analysis tools to draw appropriate conclusions....................................8
TASK 4..........................................................................................................................................10
Exploration of strategic and models to sustain the competitive position:.................................10
TASK-5..........................................................................................................................................12
Resource implementations of the selected strategy..................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
The term strategic management is concerned with the development of strategic vision,
setting objectives, formulating, implementing and introducing corrective measure of deviation. It
is a process of continuous planning, monitoring, analysis as well as assessment of activities that
are necessary to meet organisation objectives (Barney, 2012). The organisation which is taken in
this report is Apple Inc. It is an American multinational technology company headquartered in
Cupertino, California. Apple is a prominent hardware and software company best known for its
series of personal computers, iPod, iPhone etc. and innovative marketing of its product. It was
founded by Steve jobs Ronald Wayne and Steve Wozniak on 1st April 1976 with a changing
vision that suits the royal status or personalities of individual's. It has been owned the world's
best valuable brand from the six consecutive years. With its innovative marketing and branding
strategies, it is able to build emotional connection with its customers. In this report, various
types of strategies as well as relevant models and concepts are discussed. Main objective of this
is to draw appropriate conclusion and exploring competitive drivers. Further, it will going to
analyse the competitive position and models to demonstrate relationship among key divisions
such as Human Resource, Operations, Finance, Marketing ,Technology etc.
TASK-1
Understanding of the types of strategy in relation to the schools of strategy and strategic concepts
There are many strategies that are been adapted by Apple from the school of strategy and
strategic concept. These strategic tools helps in measuring the future directions of the respective
organisation and various methods which can help in achieving success for Apple Inc. There are
various schools of thoughts of strategy formulation such as The design school, Positioning
school, Cultural school, cognitive school and many more. These are mentioned below:
The Positioning School- This school of thought focuses on positioning the product of the
company at the top in the market. Hence, Apple analyse various elements to put its products at
top of the market by analysing the competition in market (Bryce, 2017). Hence, respective
company practice BCG matrix method to position their product.
BCG matrix is a chart which is consist of four different factors i.e Question mark, rising
star, Cash Cow and dogs.

 Question Mark- The Apple TV falls under this category as the respective organisation is
not making much of the profit from this product range. In order to overcome these issues
and earn more revenue from this product range, Apple needs to focus on solving
ecosystem problems (Greco, Cricelli and Grimaldi, 2013).
 Rising Star- The iPhone and iPad of Apple are the rising star of the company as they
make a huge amount of profit from these products. These are so successful that the
growth of their potential is still not measured.
 Cash Cow- The Mac Books of Apple comes under Cash cow category. This is because of
the changing trends of shifting customers to portable and mobile phones.
 Dogs- The hard drive iPods of Apple are in the dogs category of BCG matrix of Apple.
This is because of the high competition in the market as many companies are making
similar products at low cost. Due to this, the sales of the respective product has dropped.
The Design School- This theory of strategy formation states that the main focus of the
organisation is on developing unique ideas. In order to analyse it, the respective company
analyses its strength, weakness, opportunity and threats. The strength of Apple is innovation,
brand value, etc. However, the weakness is High price, Limited distribution network,etc.
Similarly, the opportunities are expansion of distribution channel, new product line (Hahn,
2013). The threats of Apple are Imitation, fierce Competition, etc. As Apple Inc. is known for its
innovation and unique ideas, the respective organisation has successfully delivered many
products which has completely changed the whole technical market over the past 5 year. Some of
the examples are iPhones, iMac, iTunes, and many more. These products has helped the
respective company to grab a huge market.

TASK-2
Use of the relevant models and concepts, exploring competitive drivers and the impact on the
competitive position of the company
The competitive position of the company is derived from various factors such as industry
competitors, bargaining power of suppliers & buyers and threat of substitues. Hence, these
factors can be analysed from Porters five forces model.
Porters five forces model for apple
 Industry Competition-This force determines the number of competitors and their ability
to threaten the company (Hair and et. al., 2012). The level of competition for the apple is
relatively high. Competitors of apple are Google, Samsung, Amazon. All of these
companies invest significant capital on research and development. Competitive forces
within the industry is so high because of the low switching cost as it doesn't require huge
investment by the consumer to ditch apple's iPad for amazon kindle.
 Bargaining Power of Buyers- This force determines the ability that customers have to
drive prices down. It determines how many buyers company has and how it would cost a
company to switch to another. In apple's case bargaining power of customers is strong,
because of its low switching cost, it makes the buyer easily change the brands. But on the
other hand individual buyer purchase is low as compared to apple's total revenue . This
condition makes customer weak at individual level.
 Bargaining power of suppliers-This force focus on how suppliers can drive up the
prices of goods by creating unique products and how much it would cost a company to
switch from one supplier to another. Bargaining power of suppliers is relatively weak
force. There are potential suppliers for apple components. This condition makes
individual suppliers weak in creating their demand on firms like apple. The switching
cost for apple to exchange one supplier to other is low and not a obstacle.
 Threat of substitute products-Competitors products pose great threat to the company
own products. In apple's case threat of substitutes is low. Apple's substitutes are easily
available in the market. For example customers can use digital cameras instead of
iPhones to take pictures. However these substitutes have low performance because of the
limited features. Thus substitution has a weak force in impacting apple's business.

 Threat of new entrants- Company's business is also affected by entry of new firms in
the market. Establishing a company to compete against the firm like apple require huge
investment . Its very costly to develop a strong brand against apple (Hill, Jones and
Schilling, 2014). Google has tried to compete against apple by manufacturing product
like nexus smartphone. But failed. Thus the threat to new entrants against apple is weak.
A critical discussion of the company's competitive advantage among its direct competitors
Apple's direct competitors are google, samsung, amazon, HP. Apple has various competitive
advantage over its competitors. These advantages can be understand by below mentioned
points:
 Innovative products- Apple has established valuable reputation for innovating new
products in the market place. Company's competitive advantage is its ability to develop
innovative products which have the same operating system, software and applications
which enables the company to introduce new products with minimum risk and time,
pushing the company ahead of competitors (Hill, 2017). It strengthens customer loyalty
and creates barrier to competition.
 Pricing strategy-Apple sets premium prices for its products .The company offers high
quality products to customers with its unique features and uses its high prices to increase
the perception of added value in the product and maintain profitability in the company.
This high pricing strategy allows apple to set benchmark for its competitors.
 Strong supply chain-There is a large scale of suppliers, Business partners which provide
apple with a strong competitive advantage. Apple controls manufacturing, follow strict
software standards and operates its own stores. This gives apple a control over the
process of product development an advantage over its competitors.
The probable industry scenarios facing the company within its existing market domains.
Apple Inc. is regarded as competitive player in the telecom industry as compared to HP,
google. Its market is characterised by frequent product innovations and rapid technology
advancement (Hitt, Ireland and Hoskisson, 2012). Apple pricing strategy is premium compared
to other competitors. Apple always increase the price of the products with the innovation of new
features in order to add value to those features. Even with the increase in price of every product,
apple is gaining more and more share in the market. Apple's competitors who sell mobile devices

on other operating system have cut prices to gain larger share in market. These have greatly
affected the financial condition and operating results are widely affected by these. Competitive
factors to the company include its product features, relative price and performance which are the
most dominating features of Apple in the market.
Apple is focusing on expanding its opportunities in mobile applications and in personal
computers. Apple digital content services have faced a lot of competition from those companies
who are promoting their own digital music (Hitt and Duane Ireland, 2017). Apple's future
financial condition and operating results depends on its capability to develop new innovative
products in each of the area where it competes. As discussed above apple's competitive
advantage makes it an individual player in the market with less competition. Apples owns
manufacturing process, its full control over the product development makes its competitive. Thus
all this competitive features in apple makes it different and unique from its competitors.
TASK-3
Use of relevant internal analysis tools to draw appropriate conclusions
Apple Inc. stands among the competitors for the quality of product and technological
advancement it has offered to the market. Hence, the strategical drift of the respective company
is almost equal to the changing environment of the market demand.
Apple Inc. is a multinational technology company which deals in selling computer
software, electronic and online services. The vision and mission statement of the respective
organisation propel the employees to initiate and support innovation in order to achieve
competitive advantage. Hence, the vision statement and the mission statement of Apple are
mentioned below:
Vision Statement- The respective organisation believes in focusing on innovation in
order to provide quality products. Additionally, Apple Inc. states that their focus is on advancing
the products that have been introduced by them in the market and concentrate on the market
which can help in making more profit.
Mission Statement- Apple is focused on delivering the best personal computers in the
whole world along with OSX, iLife, iWork, etc. Just like leading the music world with its
innovation like iPods and iTunes, the company is dedicated to change the whole mobile industry
with its revolutionary products like iPhone, App store, etc.

VRIO Analysis of Apple
It is a tool which helps in analysing the company's resources and its competitive
advantage. Along with this, this tool also helps in analysing the internal factors of Apple (Killen
and et. al., 2012). It is consist of 4 factors which are valuable, rare, Inimitable and organised.
Valuable- This element studies the price range of the resources and its availability in the market.
For example, its availability to purchase (Keupp, Palmié and Gassmann, 2012). Hence, the
resources like brand, supply chain management, top executive and product distribution are very
much valuable of Apple Inc.
Rare- This factor of VRIO analysis helps in understanding the rareness of the resources. Hence,
the Brand, supply chain management and Top executives are rare. However, the international
product distribution is not rare as there are many other companies which are having international
product distribution channels.
Inimitable- This element undertakes the study about how difficult it is to copy the product or
the services of Apple Inc. Hence, the brand, supply chain are the elements which cannot be
copied by any other competitor in the market. However, the international product distribution is
carried out by many other competitors in the market such as Del, Samsung, etc.
Organised- This factor help in understanding how well the organisation can use its existing
arrangements and advantages (Lasserre, 2017). Thus, it would not be wrong to say that Apple
Inc. is a well established company which have successfully used all the organisation
arrangements in order to expand and grow in the market.
Business Model Canvas of Apple iPod:-
Partners-
IBM, Cisco, SAP,
GE and Deloitte
Activities-
Hardware Design
Software Design
Marketing
Value
Proposition-
Seamless Music-
Experience on
demand.
Customer
relations-
Switching cost.
Customer
Segment-
Luxury Spot
Mass Market.
Resources-
Employees,
Machinery,
Product and
Services
Channel-
iTunes Store,
Apple Stores.

Cost- Employees, Manufacturing, Marketing and Sales Revenue Stream- iPod Hardware,
iTunes Stores, Commissions.
TASK 4
Exploration of strategic and models to sustain the competitive position:
Apple Inc. has implemented Bowman's Strategic Clock to analysis the competitive
position in comparison to offerings offered by other competitors. Hence, competing through
low prices and become more popular to gain competitive advantages (Meyer, Neck and Meeks,
2017). The main objective of this model is to place a product in an attractive manner that create
a most competitive position in market. The following point demonstrate relationship between
consumer value and prices are as follows:
Low price and low added value: In this model, the product is not differentiated and
the customer perceives very low value of product despite of its low prices. It leads to decline
customer satisfaction and loyalty. Apple Inc. usually does not choose to compete in this
category of low price. They are segmenting their product to high class people who are
concerned with status symbol and add value to their lifestyle etc. The services and features
offered by its product are of greater quality. Thus, it help to win customer loyalty and retention
and also attract more customer's towards it.
Low Price: It is a pricing method where an organisation sets competitively low prices
in order to enhance demand among the customer. Under this strategy the profit margin are low
but sales volume are high respectively. The prices offered by Apple Inc. is relatively higher.
Because of the high quality and features offered in their product, the company has been ruling
the premium smart phone segment with highly optimised software and facilities. Hence, they are
know for using best software technology with high productivity features and quality.
Hybrid: This strategy is adopted by those companies who are offering their product at
low prices. But the services and product offer to customer are higher perceived value in nature,
rather than its low cost. Apple Inc. are offering both product and services at high cost as well as
adding value in lifestyle of customer. It constantly come up with various new innovation with
powerful assistive features so as to improve client relationship and boost the productivity and
remain competitive in the market (Michael, Storey and Thomas, 2017).

Differentiation: In differentiation, companies develop such product and services which
offer unique attributes that provides value to customer. Apple Inc. design and develops its
product in such a manner that differentiated from its competitors to have competitive edge in
market scenario. They are building strong relationship with their customer by providing high
quality products. It also attempts to increase the market share for its product differentiation, with
unique features to attract more customer.
Focused differentiation: In this strategy, companies offer their product with high
perceived values against high prices. Apple Inc. focuses on differentiation to customer by
providing services based on perceived value only (Molina-Azorin, 2012). They are offering
premium quality smart phones with great features in it. Hence, the respective company is adding
value in lifestyle, personalities, status symbol etc. of the customer as well as operating in highly
targeted markets and gaining high profitability.
Increased price and standard product: In this model, sometimes the company takes
chance and simply increase the prices without any increment in the value of its product. Apple
Inc. are balancing its prices with the value of its product. This strategy is not applicable for long
term position in the market as price strategy of Apple will soon be discovered in competitive
market. They are benefited in both aspect such as remain competitive in the market and able to
build strong relationship with their customer. With this they are able to earn high profit by
providing best quality services as well as coming up with new innovation as per the customer's
demand.
Monopoly pricing: It is a pricing strategy, followed by seller to maximise his/her
profits under the assumption that he need not to worry about its competitors. Apple Inc. are
known for its monopolistic competition in the market. Its competitors are relatively less in
comparison with other competitors. It is a brand in itself, having great features and quantifies
that suit a personality of an individual. Some of its product like iMac, PC, and mac book are
consider as monopolistic competitors in market.
Loss of Market share: If a company is operating at low value of product and services,
then it will definitely lose its market share. It significantly impacts on the performance of
company. Market share are essentially important for an organisation as it help to maintain the
sales as well profitability of the company. Apple Inc. is one of the long-term drivers in share
market (Morden, 2016). They have an ability to deliver innovative products with user friendly

interfaces. Its product such as iPhone, iPad and Mac sales are increasing rapidly in market . They
are operating at large volumes with high productivity services and building strong relationship
with brand loyalty to their customer's.
TASK-5
Resource implementations of the selected strategy
Every business organization wants to expand and improve their overall activities to attain
higher success at market place. By this company can easily enhance the chances of attain set
goals and objectives in stipulate time frame. For attaining the same, Apple Inc follows strategic
implementation process which allow business organization to formulate sets of actions and
decisions as well (Priem, Li and Carr, 2012). This will directly contribute in establishing positive
brand image of the company at wider market place. As this type of implementation process
includes some stages which can be understood by following points:
 Define strategy framework: It is one of the important step to evaluate the actual purpose
of implementing as well as using strategy within the business organization. This will help
company to improve their productivity level by serving best quality products. In this
context, it is important for workers and company to put their best efforts to attain their set
goals in appropriate time frame. The main purpose of Apple Inc behind implementing
strategies is to capture lager market share from its rivals at market place.
 Build plan: Under this step, Apple Inc make an appropriate plan to effectively implement
the strategy within the business activities. By this company can easily evaluate the
alternative way to use best strategy at the time of expanding their business in wider
market. Along with this, manager of the company gather relevant information and data
towards the set goals and objectives before implementing the strategy. After this they also
communicate with their workers about the vision to make their entire activities more
effective.
 Allocation of resources: Under this step, it is important duty of manager to effectively
allocate proper and adequate resources such as fund, workers and many more. All these
are important for company to implement strategy within their business activities. By this
Apple Inc can easily attain their target by implementing appropriate strategy.

 Leading and controlling the overall performance of activities: It is last step of strategic
implementation in which manager of the company analyse as well as lead all the
activities of implementation process. By this, Apple Inc can easily measure that its entire
activities are effectively execute or not. With the assistance of this, company improve the
chances of attaining success in market place and at the same time also attain set goals and
objectives.
Furthermore, all these steps plays an important role in business organization because in which
all the key areas like HR, operations, Finance, Marketing, Technology and many more consist
their role (Hill, Jones and Schilling, 2014). With the assistance of this, Apple Inc can easily
improve their performance and also capture future opportunities as well. In context, all these key
areas can be understood by following points:
 Human resource: Employees are most important assets for every company to execute all
the activities of the company in systematic manner. In context of strategy
implementation, workers of Apple Inc are capable and skilled who are able to effectively
implement the strategy with the purpose of enhancing the productivity level at market
place. For attaining the same, employees are effectively analysing the advantage of
implementing Porter five force model in order to capture market share from its rivals and
also establish their positive brand image at market place. This is the reason that, company
can easily implement and execute appropriate strategies for enhancing their brand image.
 Finance: This area also plays an important role in determining the effective way to
implement the strategy with the aim of attaining success at market place. Under this, it is
important responsibility of finance department to allocate proper fund at the time of
implementing strategy within this business organization. With help of this, Apple Inc can
easily analyse the competition and competitive advantage in market place. Along with
this, finance department also analyse the requirement of fund to effectively analyse the
market situation as per the competitor’s performance. This will support company to
established their competitive position at market place and at the same time also capture
larger market share from its rivals.
 Operations: It is also an effective and important area which help business organization at
the time of implementing strategy within their activities to make overall performance of
the company more effective and competitive as well. In this, operation department