Apple’s generic competitive strategies and intensive growth strategies relate to the company’s strategies in pricing, marketing, and other areas of the business. Michael E. Porter’s model for generic competitive strategies defines strategic options that the company can use to develop its competitive advantages in the consumer electronics and information technology and services industries. Apple’s generic competitive strategy determines competitive advantages over other companies that provide information technology, consumer electronics, and online services. On the other hand, Igor Ansoff’s Matrix of growth strategies presents ways for the technology business to intensively grow in current or new markets and industries. In this case, Apple’s intensive growth strategies support the ability to maintain a strong position in the global market. With a high rate of innovation and emphasis on excellence in product design, the enterprise succeeds with its premium selling prices. This successful positioning indicates Apple’s effectiveness in using its generic strategy for competitive advantage, and intensive strategies for business growth.
Apple’s generic competitive strategy aligns with the company’s intensive growth strategies, especially in maximizing the use of the organization’s competitive advantages. In particular, the intensive growth strategy of product development is key to fulfilling this generic competitive strategy and supporting the long-term growth and success of the company’s technological goods and services. This alignment between the generic competitive strategy and the intensive growth strategies provides support for fulfilling Apple’s mission statement and vision statement.
Apple’s Competitive Strategy (Porter’s Model)
Apple’s generic competitive strategy is differentiation. This generic strategy focuses on competitive advantages based on key features that differentiate the company and its products from competitors, including IT and consumer electronics companies, like Samsung, Google (Alphabet), Microsoft, and Sony. These competitive advantages also apply to Apple TV Plus, which competes with the video-streaming services of Netflix, Disney, Amazon, and Facebook (Meta). Through differentiation as its generic competitive strategy, Apple stands out in the market. For example, elegant design and user-friendliness of products, combined with high-end branding, effectively differentiate the technology business.
The generic competitive strategy of differentiation means that Apple always aims to set itself apart from competitors not by price but by competitive advantages based on product design that attracts customers. Such design includes seamless connectivity among devices and cutting-edge aesthetics. Even though this generic competitive strategy makes Apple different, the company still broadly reaches various segments of the market. The firm’s products are designed for everyone, thereby supporting a broad market reach. For example, the company targets individuals and business organizations through the Mac product line. In this way, the generic competitive strategy of differentiation supports the company in maintaining its competitive advantage, leadership, and position as a high-end and high-value technology business.
The generic competitive strategy of differentiation has significant implications on Apple’s strategic objectives. For example, to apply this competitive strategy, the company must continue emphasizing innovation through research and development. Apple must keep developing innovative products so that the business maintains its competitive advantages. Competitors eventually catch up with new technologies and new products, so the generic competitive strategy of differentiation compels the company to continuously innovate to keep itself always ahead of the competition. Thus, continuous innovation is one of Apple’s strategic objectives based on differentiation as the generic competitive strategy.
To maintain business growth, the company must keep growing its market reach, such as in the global consumer electronics market. In its generic strategy for competitive advantage, Apple does not focus on specific market segments. Instead, the company competes by selling various goods and services that suit the various segments of the consumer electronics and information technology services industries. Thus, another of Apple’s strategic objectives based on its generic competitive strategy is to penetrate markets to ensure a more expansive market reach. This expansion and business growth are achieved through intensive strategies for growth.
Apple’s Growth Strategies (Ansoff Matrix)
Product Development. Apple uses product development as its main intensive strategy for growth. Product development requires that the company develop attractive and profitable technology products to grow its market share and business performance. Apple implements this intensive growth strategy through innovation in its research and development processes. Through product development, the company uses innovation as a critical success factor and competitive advantage. For example, the business continues to innovate and enhance MacBooks and the iPhone, iPad, and Apple Watch. In this intensive growth strategy, the company grows because new products allow the business to generate more revenues, such as through the sale of new iPhone models. The company’s generic strategy agrees with this intensive growth strategy by focusing on technological innovation to increase competitive advantages and profits. Apple’s organizational structure (corporate structure) supports this growth strategy. The structure’s product-based divisions enable strategic management specific to product development. Also, Apple’s company culture (business culture) emphasizes innovation that supports product development.
Market Penetration. Apple Inc. uses market penetration as its second most significant intensive strategy for growth. Market penetration involves gaining a larger share of the current market by selling more of the company’s current products. For example, the company applies this growth strategy by selling more iPhones and iPads to its current markets in North America. Also, the company achieves more sales by adding more authorized sellers to boost its distribution network’s competitive advantages in its current markets. This approach penetrates markets where Apple has not yet achieved a significant position. Moreover, with market penetration as an intensive growth strategy, the company uses promotion through various websites and media outlets. Advertisements encourage more people to buy Apple products. This intensive growth strategy agrees with the company’s generic competitive strategy of differentiation by addressing the need to broadly capture the market through the sale of more technological products to more customers. The distribution strategy and promotional strategies and tactics in Apple’s marketing mix (4P) influence the effectiveness of the organization’s competitive advantages and this intensive growth strategy.
Market Development. Apple uses market development as a low-priority intensive strategy for growth. Using the company’s competitive advantages, market development involves selling existing products in new markets or market segments. For example, Apple Inc. applies this intensive growth strategy by authorizing new sellers in markets or market segments where the company does not have any presence yet. This growth strategy agrees with the generic competitive strategy of differentiation by expanding the company’s market reach, such as by introducing its current consumer electronics to new overseas markets or market segments. Differentiation as a generic strategy for competitive advantage also requires offering products to different market segments, which Apple satisfies via market development. Through its various product models of consumer electronics and other goods and services, the company fulfills this strategic requirement. The business strengths discussed in the SWOT analysis of Apple Inc. facilitate the implementation of market development as a growth strategy.
Strategic Analysis and Recommendations for Apple Inc.
Apple’s generic competitive strategy of differentiation adds competitive advantage by making the business stand out. Differentiation in product function and design supports the firm’s goal of leading the market through technological innovation. Innovation is at the heart of Apple’s business. However, to improve its application of this generic strategy for competitive advantage, the company must aggressively penetrate markets. This recommendation is especially applicable in developing countries where the corporation has limited market reach for its information technology goods and services.
Apple’s main intensive growth strategy is product development. Market penetration and market development have lower priority in this technology enterprise. These intensive growth strategies agree with and support Apple’s generic competitive strategy. The company is strong in product development through innovation. However, to improve performance, Apple needs to focus more on market penetration and market development. These two intensive growth strategies can improve the company’s resilience against aggressive competitors, like Samsung. Also, adjustments to Apple’s operations management can optimize the effectiveness of these growth strategies and the differentiation generic strategy for competitive advantage.
References
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