Apples Business and Corporate

AppleStrategies
Business and
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
Broad
(i.e., industry Broad Low cost
wide) Broad Differentiation
leadership
Strategic Target

Focused Cost Focused

Leadership Differentiation
Narrow
(I.e. specific
segment only)
Low Cost Differentiation

Strategic Advantage
KEY DRIVERS OF DIFFERENTIATION
ADVANTAGES FOR APPLE
Key Drivers
• The iBRAND
• Sleek Stylish Designs
• Continuous radical
innovations e.g.- ITunes
online store
• More convenient access
• Superior Quality
• Excellent customer service
and technical support
Purpose
To drive up customer’s
willingness to pay and
generate demand
sufficient to
(1) Recoup added costs
and
(2) Generate enough
profits to make
strategy worthwhile
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 Servers I book
mac
FF

C Focus On Education
O eMac
N
V
E
R
G
E Lifestyle Strategy Adding Value
N
G
E
N
C
E

iMac
 STRATEGY DIAMOND
ARENAS
Worldwide presence with
ARENAS U.S. being the No.1 Market.
STAGING AND Hardware, Software,
Consumer Electronics and
PACING Digital Distribution
Focused Differentiation

STAGING & Economic logic

VEHICLES
PACING VEHICLES
Highly Internalized R&D &
Major Acquisitions in
Software Industry.
ECONOMIC LOGIC
High Margins on the DIFFERENTIATORS
Products &Economies of DIFFERENTIATORS
Scope High end Superior Quality and
Stylish Products, Worldwide Brand
Recognition and Leader in
Innovation.
 BUSINESS LIFE CYCLE

iPOD
Market iMac
&
DEMAND

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 YES, Mobile & Music
Market still growing
Fit with current
Can it be with Tablet PCs and
industry
implemented ? Apple TV in
conditions ?
anticipation.
DIFFERENTIATION

YES, Significant Internal YES, Nothing Till Date Has

Development with Cost Matched Its PRODUCTS and
Containment Measures Aligned to the
Strategic Sustainable ? Services Whether iPod,
Required for iMacs & iBooks. iPhone, iTunes & now the
Position ?
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 Apple’s 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

Apple’s Synergies
Apple TV

iPod mac

Apple
Care synergy iPhone

Retail
Software
Software
iTunes
Content
 HIGH LOW

HIGH STAR PROBLEM CHILD

•iPhone •iMAC
INDUSTRY •iPods
ATTRACTVENESS
(GROWTH RATE)

LOW CASH COW DOG

•iTunes

Relative Market Share

 The End

Thank you for your time and patience !!