Apple’s Corporate Strategy
Apple’s corporate strategy is to continuously expand their product base. Apple started off in the computer industry, but it is obvious that Apple has expanded itself successfully out of that specific industry. Apple now offers a variety of different products that include home computers, personal computers, phones and music devices.
Apple utilizes economies of scope to increase efficiency by using many of the same resources for their many products. Apple’s ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design is placed at the core of its corporate strategy.
A way that Apple incorporates its strategy is by using product differentiation. There is a list of different innovations introduced by Apple. One innovation Apple created is the iPad, the first device that could store thousands of songs that you could shuffle through. Another one of their unique innovations was the development of the Macintosh. The Macintosh is the first computer to use a graphical user interface. Apple’s ability to produce their innovative design helps create a huge competitive advantage and is why it is placed in the core of its strategy.
First mover advantage is another element of Apple competitive advantage. An example of this is the IPhone, which was the first great touchscreen phone combined with single-click app purchases. It has to be stated that Apple competitive advantage may be challenging to be sustained for long-term perspective. Specifically, the management may fail in terms of ensuring the addition of innovative features and capabilities in new versions of its products, thus compromising its competitive advantage.
Companies based on linked diversification have little coherence to their overall corporate strategy, while companies using constrained diversification tend to be more focused. Constrained diversification allows companies to maximize the effect of their resources because they are shared. Apple uses constrained diversification. Apple is a personal computer company and their businesses utilize their competencies in developing hardware and software.
All of their innovations which include the Macintosh, iPad, iPhone, iPod and AppleTV are all computers, which allow Apple to share resources between businesses. The Macintosh, iPad, iPhone, and AppleTV all run on the same operating system, the OS X. This creates economies of scope, which create cost savings for the company because their resources are shared across multiple businesses. Rather than just have related businesses, though, each business is a focused platform with no extraneous products or product types.
The analysis shows Apple’s corporate strategy, which is expanding its activities into product lines that are similar to those it currently offers. Apple can create positive results by using a diversifying strategy. By introducing new products, exploring new regions or targeting new groups of customers, you can expand your customer base. This can lead to increase its profits, cash flow, and borrowing power.
Apple is the largest IT company in the world by revenue and total assets and the second-largest mobile phone manufacturer. As of September 2018, the Apple had approximately 132,000 full-time equivalent employees (Annual Report, 2018). The net sales of the world’s largest IT company by revenue increased 16% or USD36.4 billion during 2018 compared to 2017. (Dudovskiy, 2019). Whether you measure growth in terms of the number of employees, profits or sales, a diversified strategy can help you get there.