HI6006 Competitive Strategy: Apple Case Study Report

This report provides a comprehensive analysis of Apple's competitive strategy, examining its key elements and strategic decisions. The report begins with an executive summary and an introduction, followed by a brief overview of the Apple case. It then delves into the strategic issues faced by Apple, such as unstable strategies and competition from rivals. The core of the report focuses on the application of business strategies, including differentiation, diversification, customer focus, pricing, and manufacturing and supply chain strategies. The report highlights how Apple leverages innovation, particularly through design thinking, to differentiate its products and build a strong customer base. The report also discusses Apple's pricing strategies and its approach to manufacturing and supply chain management. The conclusion summarizes the key findings and emphasizes the importance of Apple's customer-centric approach and commitment to innovation in achieving its strategic goals. The report is supported by references to academic sources.

COMPETITIVE STRATEGY

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Executive Summary
Company does not become successful just by the resources and capabilities they have rather
they become successful because of the strategies they are using. It is seen that different
companies apply different strategies for facing the challenges confronting their business. In
this case study analysis it is found that Apple used Innovation as the base of their business
strategy. Due to this, differentiation and diversification has been in the core of the business
strategy. It shows that company has been able to improve its performance because they have
continuously focused on customer-centric approach. They have also been able to build a trust
in the minds of customers and the value that they have added in their product makes their
consumers purchase the product even after higher price. It also shows that Apple has never
compromised with quality and has been continuously improving it.

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Contents
1. Introduction...................................................................................................................................3
2. Brief summary of the case.............................................................................................................3
3. Strategic issues faced by Apple.....................................................................................................3
4. Application of the business strategy..............................................................................................4
4.1 Differentiation strategy................................................................................................................4
4.2 Diversification.............................................................................................................................5
4.3 Customer’s focus.........................................................................................................................5
4.4 Pricing strategy............................................................................................................................6
4.5 Manufacturing and supply strategy..............................................................................................6
4.6 Other strategies............................................................................................................................6
5. Conclusion.....................................................................................................................................7
6. References.....................................................................................................................................8

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1. Introduction
Businesses all around the world are facing strategic challenges and it has become essential for
the organisations to understand the problems and implement the best strategies for their
development. The nature of the challenges suggests the type of strategy that the company can
implement. Business strategies plays a greater role in the success of the organisation as it
ensure that company do not lag in the areas where they can be successful (Heracleous, 2013).
Business strategy helps a company to expand in the new areas at the same time it also ensures
success in the current areas of operations. Innovation is one the best business strategy that
any organisation could utilise. Many big companies all around the globe are facing huge
competition and for coming out of this they using innovation as a business strategy. This
report analyses the case study of Innovation at Apple.
2. Brief summary of the case
Apple is one of the leading firms that are renowned for its unique brands and products. Apple
has seen many bad times and is facing competition from the rivals that are from different
parts of the world. When Steve Jobs returned to Apple after being fired, the firm share was
only accounted US dollar and the future was uncertain. There are different types of issues that
were faced by the Apple. In such situation company needed a business strategy that can
ensure their long term growth. In this regards design thinking as a part of the innovation
strategy was highly successful. This mini case study suggests the role of the design thinking
and innovation as a part of their business strategy for coming out of the issues that company
was facing (Elmansy, 2016). The case study reflects the use of strategies by Steve Jobs that
helped them in rescuing Apple with his customer-driven strategy and vision for the firm.
Their approach to think differently gave a different place among their competitors and
allowed them to grow as per the changing need. In this case study it is shown that how apple
utilises its strategies such as Excellence in execution, platform strategy, iterative customer
involvement and beautiful products.
3. Strategic issues faced by Apple
Apple faced many kinds of strategic issues in their growth and struggled hard to achieve
success in the market especially in terms of their growth and financial performance. The
major problem that Apple faced was related to unstable strategy due to the change of the
teams at the upper levels of the organisation. Most of the stakeholders of the company for a

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long term remained unclear about the vision of the company and the competitive strategies
they have made. This becomes bigger once the IBM entered into the PC market. They were
also facing problems related to unclear vision about selling licences of OS which can put the
firm in competition with windows operating system. Large numbers of their products before
coming of Steve Jobs failed such as Newton PDA. Products were not unique in the market
(Khan, Alam and Alam, 2015). Another bigger problem that Apple was facing is that there
was large uncertainty and confusion among their consumers. Apple’s financial performance
was going down because of the increasing competition in the industry. There were many
competitors of the firm in emerges in different parts of the world.
4. Application of the business strategy
Steve jobs did many things before actually transforming the company and for dealing with all
the challenges they are facing. The first thing that company did was to fuel their innovation.
For this design thinking strategy was placed as their priority (Fogliasso and Williams, 2014).
Design thinking is generally considered to be as the solution-oriented strategy that is used for
achieving innovation while keeping consumers in the back of their minds. What Steve jobs
did was to place the consumers in the heart of all the growth strategies and development
process. By adopting innovation as a part of the innovation strategy what he did was to draw
from the designer’s toolkit to integrate the requirements of the people, the possibilities of
technology and the requirements for success in the business. Due to pacing innovation in the
core this company was able to bring the innovated product at much faster rate. This gave
them competitive advantage in the market as they were able to look at all the challenges faced
by their products and rectify it to bring in the market.
4.1 Differentiation strategy
Apple understood the importance of differentiating their products from that of their
competitors so as to achieve strategic benefits and also for making edge over the competitors.
Apple from the base started to change their products in a manner that it brings disruption in
the market. Apple concentrated on giving a benefit to the people which no other competitor’s
product in the market was capable of giving. For instance they understood that the software
that was designed by their competitors lacked in terms of security and privacy. Company
developed their operating systems that were capable of dealing with the challenges that
confronted the business of their rivals. By improving the design of their products what they
did is to reduce the complexity of their products. This helped them in improving the utility of

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the product by adding things that could be more useful for the customers (Hanks, 2018).
Differentiation strategy has helped the company in doing international expansions at much
faster rate in spite of the fact that they are not investing in the marketing strategies at the
levels their rivals are doing.
4.2 Diversification
Another major thing that Apple did was to diversify the range of products they are selling in
the market. This not only helped them in adding the numbers of customers in their customer’s
base but also helped them in thinking about the future of the company. This strategy added
huge amount of their money in their revenue base as consumers have large options to choose.
Every product of theirs was way too different the others. This gave them a market that was
big and was able to convert them into the tech giant. This made them one of the companies in
the industry that earned maximum profits. It was also seen for continuous many years they
have been leaders in the things that was brought in the market (Adjei, Noble and Noble,
2012). One of such famous product in the market was Apple’s IPod that was designed for a
totally new purpose. It tends to solve the problem of the people about carrying big radio.
Apple’s such radios was one of its kinds. Apple concentrated on excellence in execution and
developed products that had higher potential to gain success in the market.
4.3 Customer’s focus
Apple understood the importance of customer engagement in the success of the product. For
this what Steve Jobs did was to clearly define their vision and mission. This helped the
company to make stronger bond with their customers. Customer engagement is also
improved by taking the opinions of the customers and hence understanding the problems that
they are facing in their daily life. Apple generally makes some announcements about their
upcoming products. This helps them in creating a space for themselves where they get
reactions of the people and also understand the variables that can make their products
successful (Montgomerie and Roscoe, 2013). They started selling products through both
online and offline mediums. They also improved the materials and the way the products were
manufactured along with consumer driven culture. Their design was totally focused on the
way user will experience while they use their product. This made their products different
from their rivals who tended o build products just for making it different. They have been
focused towards simple design and the products that user-friendly. Most of the competitors of
Apple concentrate on features and product capabilities while Apple focuses on holistic user
experience.

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4.4 Pricing strategy
As a part of their business strategy they understood the importance of branding and it is due
to this branding they understood how they can succeed in the market. Their products were
obviously started to make the lives of the people better. At the same time they ensured that
their products cannot be easily copied by their rivals. This helped them in creating a pricing
strategy that was totally as per their choice. They opted for the premium pricing which made
them the company that makes luxury products that cannot be imitated by their rivals
(Elmansy, 2016). They understand that as long as people are able to get the products that can
make their life easier, the problems will not arise in increasing the price. However, the similar
contradiction occurred in the recent products of the company where the firm failed in meeting
the value that it can add in their new products but thee price rise from the last product is huge.
4.5 Manufacturing and supply strategy
Apple understands what they need to concentrate on and hence they have outsourced their
manufacturing to other countries. This company has manufacturing unit in the countries
where the production cost is less for instance China. With their strong supply chain they are
able to deliver their products in different parts of the world and also help them in maintaining
the balance between demand and supply (Pineda, 2017). At the same time Apple concentrates
on software as it the thing that can give them advantage over the rivals. Their software is far
much better than their rivals, more safe and secure. Their operating system has capabilities
that no other firm can match. Regular making innovations in this allow them to keep this gap
between their rivals and them higher.
4.6 Other strategies
In all of their business strategy what they clearly focused was the design and hence they
brought beautiful products and also ensured that they have a clear idea of what they are trying
to sell and to which kinds of customers. What Apple plans is not for today but to achieve
sustainability in the long terms this is the major reason why they are leading the industry
from past two decades. Most of their technologies are understood to be forerunners of the
technology of their rivals (Hüseyinoğlu, 2018). This attracts people as they know that even
after the high pricing it gives the maximum value for their products. This win over the
customer’s understanding made them the ruler in the technology industry.
As a part of their business strategy what Apple did was to concentrate on the quality they
deliver in their products and services. This is the major reason why most of their products

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was not a fail or have disappointed people. The idea of working towards the vision of the
company helped them in gaining strategic success over the rivals. They are continuously
making changes in the product design but at the same time ensured that quality is not
compromised in any of their products. They believe in long term establishments and hence
are keeping their people busy in new ideas especially the ones that are related to product
design (Cbiinsights, 2019).
One more thing on which Apple concentrates as a business strategy is to do process
innovations at regular basis. This helps them in keeping the pace of their growth. They are
developing processes in such a manner that all their employees may feel free to share their
ideas and work on it. There is freedom to every employee to think differently (Leswing,
2017). At the same time they are also making changes in the way they are presenting their
products in the market.
5. Conclusion
From the above report it can be concluded that Apple has been the leader in the technology
industry for two decades. Everything was not so good at the time when Steve Jobs came back
to Apple. They made innovation especially design thinking as their major business strategy to
succeed. This helped them in tackling the issues related to the financial performance.
Building strong vision helped them in dealing with the challenges related to consumers and
stakeholders. Diversification and differentiation has been the core strategy that has given
them success over the years.

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6. References
Adjei, M.T., Noble, C.H. and Noble, S.M., 2012. Enhancing relationships with customers
through online brand communities. MIT Sloan Management Review, 53(4), p.22.
Cbiinsights, 2019. Apple Strategy Teardown: Where the World’s Most Valuable Company Is
Focusing In Augmented Reality, Wearables, AI, Cars, And More. [Online] Available at:
https://www.cbinsights.com/research/report/apple-strategy/. [Accessed on 27th May 2019]
Elmansy, R. 2016. Design Thinking Case Study: Innovation at Apple. [Online] Available at:
https://www.designorate.com/design-thinking-case-study-innovation-at-apple/. [Accessed on
27th May 2019]
Fogliasso, C.E. and Williams, A., 2014. Analysis Of The Business, Societal And
Governmental Relationships Of Apple Inc. Leadership & Organizational Management
Journal, 2014(1).
Hanks, G. 2018. Apple Differentiation Strategy. [Online] Available at:
https://bizfluent.com/way-5815745-apple-differentiation-strategy.html. [Accessed on 27th
May 2019]
Heracleous, L., 2013. Quantum strategy at apple inc. Organizational Dynamics, 42(2), pp.92-
99.
Hüseyinoğlu, M. 2018. What is Apple’s strategy?. [Online] Available at:
https://medium.com/swlh/what-is-apples-strategy-8e9d822732f6. [Accessed on 27th May
2019]
Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and
Management, 3(6), pp.955-961.
Leswing, K. 2017. Apple added a revealing word to its official business strategy. [Online]
Available at: https://www.businessinsider.in/Apple-added-a-revealing-word-to-its-official-
business-strategy/articleshow/59902553.cms. [Accessed on 27th May 2019]

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Montgomerie, J. and 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). Taylor
& Francis.
Pineda, M.E. 2017. The business strategy of Apple: A concise analysis. [Online] Available at:
https://www.profolus.com/topics/business-strategy-of-apple-concise-analysis/. [Accessed on
27th May 2019]