Apples Business and Corporate Apple Business and Strategies

Corporate Strategies

Done By- Kushboo Sharma , Puneet Verma & Nadika Dharmawardena

Defining Business Level Strategies

The business strategy proposes how a specific business model can gain competitive advantage over its competitors in the industry.

Business level strategy for Apple: Who What & How

The How : Finding a Position that works for Apple

Strategic Target Broad (i.e., industry wide)

Broad Low cost leadership

Broad Differentiation

Narrow (I.e. specific segment only)

Focused Cost Leadership

Focused Differentiation

Low Cost Strategic Advantage

Differentiation

KEY DRIVERS OF DIFFERENTIATION ADVANTAGES FOR APPLE

Key Drivers Purpose To drive up customers willingness to pay and generate demand sufficient to (1) Recoup added costs and (2) Generate enough profits to make strategy worthwhile

The iBRAND Sleek Stylish Designs Continuous radical

innovations e.g.- ITunes online store

More convenient access Superior Quality Excellent customer service

and technical support

Threats of differentiation & Apple coping mechanisms

Too much differentiation
Stephan Wilfred of Daimler Chrysler speaking of Mercedes-Benz S-Class car: functions nobody needed and nobody knew how to use . Apple copy cost innovations from competitors such as Dell by reducing inventory, partially outsourcing manufacturing and boosting direct sales channels

Value chain analysis of Apple Inc.

S 1.Greener apple. 2.Selective Hiring Processes. 3.R&D , Patent Filing. 4.Positive Supplier Relations. 5.Automated Receiving Systems. 6.OEMs Economies of Scale Internal Design. 7. Direct shipping /Apple Stores 8.Secretive unveiling. 9.Quick responses to bugs warranty free consultation. 1-4 (Support Activities) 5-9 (Primary Activities) D

Value Creation
Apple I,II,III Mac Power mac FF Servers I book

C O N V E R G E N G E N C E

Focus On Education eMac

Lifestyle Strategy

Adding Value

iMac

STRATEGY DIAMOND
ARENAS
ARENAS

STAGING AND PACING

Focused Differentiation

Worldwide presence with U.S. being the No.1 Market. Hardware, Software, Consumer Electronics and Digital Distribution

STAGING & PACING

Economic logic

VEHICLES

VEHICLES
Highly Internalized R&D & Major Acquisitions in Software Industry.

ECONOMIC LOGIC
High Margins on the Products &Economies of Scope DIFFERENTIATORS

DIFFERENTIATORS
High end Superior Quality and Stylish Products, Worldwide Brand Recognition and Leader in Innovation.

BUSINESS LIFE CYCLE

iPOD Market

DEMAND

iMac & iBook

iPhone Market

iTunes Market

iPAD Market

EMBRYONIC

GROWTH

MATURE

DECLINE

TIME

Testing the Quality of Apples Strategy

Yes, Outsourcing the basics production and Leadership under Quality Management

Exploiting the Resources ?

YES, Highly Qualified Staff and Huge Financial Resources

Can it be implemented ?

Fit with current industry conditions ?

YES, Mobile & Music Market still growing with Tablet PCs and Apple TV in anticipation.

DIFFERENTIATION

YES, Significant Internal Development with Cost Containment Measures Required for iMacs & iBooks.

Aligned to the Strategic Position ?

Sustainable ?

YES, Nothing Till Date Has Matched Its PRODUCTS and Services Whether iPod, iPhone, iTunes & now the iPad?

Corporate Level Strategy

deals with identifying businesses in which company should invest its resources and opportunities for expanding or

contracting.

actions taken by the firm to gain a competitive advantage by selecting and managing a group of different businesses

competing in several industries and product markets.

Three important aspects : value creation for shareholders , configuration and coordination .

Introduction of iPhone is a piece of Apples Corporate Level

Strategy to create value through diversification.

Diversification
It is a process of adding new businesses to the company that are distinct from its established businesses and operations.

Music player business with iPod

Online music business with iTunes

Smart phones business with iPhone

Types of Diversification
Business Diversification Horizontal Expansion Vertical Integration Forward or backward expansion Geographic Scope Geographic / global expansion .

Synergy
It is a condition under which different entities cooperate advantageously for a final outcome . It simply means that the whole is greater than the sum of its parts . Economies of Scope and Cross Selling

Savings from Synergy > Cost of a Corporation

Rate of Profit > Cost of Capital

Apples Synergies
Apple TV iPod mac

Apple Care

synergy

iPhone

Software iTunes Content

Retail Software

HIGH HIGH STAR iPhone iPods

LOW PROBLEM CHILD

iMAC

INDUSTRY ATTRACTVENESS (GROWTH RATE) LOW

CASH COW

DOG

iTunes

Relative Market Share

The End

Thank you for your time and patience !!