Strategic Options

Apple's generic stratergy (porters' model)

Apple’s generic strategy is differentiation. Using this strategy, the company can differentiate itself from its competitors. One method Apple use to achieve this is by producing elegantly designed products that are user friendly, accompanied by high-end branding enables Apple to effectively differentiate itself. This strategy means that ‘Apple always aims to set itself apart from competitors, not by price but via competitive advantage’ (MEYER, 2019). Resulting in the company always innovating to adhere to this strategy. Therefore, adopting this strategy has its limitations and for Apple, it is the ability to continuously innovate, as competitors eventually catch up with newer technology that is more compelling.

Strategic growth

Ansoff Growth Matrix

Apple's Ansoff Growth Matrix consists of four sections: 'Market Penetration, Product Development, Market Development and Diversification' (Dudovskiy, 2021).

Market Penetration

Apple’s global operations are divided into 5 segments: America, Europe, Greater China, Japan, and the Rest of Asia Pacific. As it currently stands the company’s largest market is America generating 36.75% of the company’s revenue, the second-largest in Europe followed by Greater China. China used to be one of the company’s largest markets before the trade war. Using effective marketing and Apple’s efficient ecosystem, the company has been able to penetrate these regions. Regions such as Japan and the Rest of Asia Pacific, produce little revenue for the company.

Product Development

Apple consistently develops new products and services to sell to its existing markets, this falls in line with the company’s generic strategy of differentiation and the constant need to innovate. ‘In 2007 the company spent $0.78 billion on product research and development by 2020 this had increased to $18.75 billion’ (Dudovskiy, 2021). The vast amount of money spent enables the company to compete in an ever-growing market. Each new products fits precisely within Apple’s ecosystem and further strengthens the ecosystem.

Market Development

Market development is associated with finding new markets for existing products. Apple uses this as a low-priority intensive strategy for growth. The company focuses on emerging economies where Apple has little or no presence as attractive markets for long-term growth. This strategy follows the company’s generic strategy of broad differentiation, by broadening the companies market reach. Countries such as India have shown an increased demand for apple products, on ‘September 23rd, 2020, the company opened its first online store in India, which was overseen by Deirdre O’Brien, Apple’s senior vice president of Retail’ (Apple, 2020).

Diversification

Through innovation and product development, Apple has been able to diversify its product range. Including having their unique headphones called Airpods, which as specifically made to use with Apple products, enhancing the company’s ecosystem. 30th April 2021 Apple released the Apple AirTag, a smart tracker to compete with others offered by Tile and Samsung. Apple TV has also been growing, although it can be seen as a question mark under the companies BCG Matrix, with the release of Apple TV +, the companies own streaming service. They have been able to enter the video streaming industry, competing with Netflix, HBO Max, Hulu, Prime Video.

Recommendations

Apple's Global Retail Empire (Dunn,2017)

Apple’s main growth strategy is product development, the company has spent a lot of time and money growing using this strategy. It follows the company’s generic strategy of differentiation through innovation. Focusing on product development and diversification, Apple could create products to penetrate the mid-range and budget market for the smartphone industry. They could potentially create a subsidiary brand, to help preserve the company’s current brand image, and make it easily distinguishable for the consumers. For example, Xiaomi’s sub-brand is POCO. Through this, the company could improve overall performance, and focus on market penetration and market development. These two strategies can improve the company’s strength against its strong competitors such as Samsung. It would also enable Apple to enhance its presence in developing countries where it has limited market reach, such as Africa, India, and places within South America. The map shows the regions where the company has retail stores around the world.

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