7/13/2017
Apple’s Generic Strategy & Intensive Growth Strategies - Panmore Institute
Panmore Institute
BUSINESS,, MANAGEMENT BUSINESS
Apple’s Generic Strategy & Intensive Growth Strategies UPDATED JAN 29, 2017 | PAULINE MEYER
Apple’s generic strategy and intensive growth strategies directly relate to the company’s strategies in pricing, marketing, and other areas of the business. As one of the most valuable companies in the world, Apple shows that its generic strategy is a major major determinant of advantage against against other rms like LG, Samsung, and BlackBerry. An Apple Watch. Watch. Apple’s generic strategy (Porter’s (Porter’s model) and Also, Apple’s intensive strategies for intensive growth strategies are aligned to support the company’s leadership in various markets worldwide. (Photo: growth support the rm’s ability ability to Public Domain) maintain its strong strong position in the global market. With a high rate of innovation and emphasis on excellence in product design, Apple succeeds even with its relatively high selling prices. This successful position indicates Apple’s effectiveness in using its generic strategy and intensive growth strategies.
7/13/2017
Apple’s Generic Strategy & Intensive Growth Strategies - Panmore Institute
Apple’s generic strategy, based on Porter’s model, aligns with the company’s intensive growth strategies. In particular, the intensive growth strategy of product development is key to fullling this generic strategy and supporting Apple’s success.
Apple’s Generic Strategy (Porter’s Model) & Objectives Apple’s generic strategy is broad differentiation. This generic strategy focuses on key features that differentiate the company and its products from competitors. Through the broad differentiation generic strategy, Apple stands out in the market. For example, emphasis on elegant design combined user-friendliness and high-end branding effectively differentiate the company. The broad differentiation generic strategy means that Apple always aims to set itself apart from competitors not by price but by other key features benecial to customers. These key features include seamless connectivity among devices and cutting-edge aesthetics in design. Even though this generic strategy makes Apple stand out, the company still broadly reaches various segments of the market. The rm’s products are designed for everyone, thereby supporting a broad market reach. For example, Apple reaches to individuals and business organizations through the MacBook product line. In this way, the generic strategy of broad differentiation supports the company in maintaining its leadership and position as a high-end and high-value business.
7/13/2017
Apple’s Generic Strategy & Intensive Growth Strategies - Panmore Institute
The broad differentiation generic strategy has signicant implications on Apple’s strategic objectives. For example, to effectively apply this generic strategy, the company must continue emphasizing innovation through research and development. Apple must continually develop innovative products so that the rm always stands out against competitors. Competitors eventually catch up with new products, so the broad differentiation generic strategy compels Apple to always innovate to keep itself always ahead of competitors. Thus, continuous innovation is one of Apple’s strategic objectives based on the broad differentiation generic strategy. In addition, the company must ensure that it keeps expanding its market reach. In this generic strategy, Apple does not focus on any specic market segment. The rm competes in all market segments with other players in the industry. Thus, Apple’s other strategic objective based on this generic strategy is to expand to ensure broad market reach. Such expansion and business growth are achieved through intensive strategies for growth.
Apple’s Intensive Strategies (Intensive Growth Strategies) Product Development . Apple uses product development as its main intensive strategy
for growth. Product development requires that the company must offer attractive products to grow its market share and performance. Apple implements this intensive growth strategy through innovation in its research and development processes. The company’s mission statement and vision statement specify product development. Through this intensive growth strategy, Apple views innovation as a critical success factor. For example, the company continues to innovate through products like iPhone, iPad, and Apple Watch. In this intensive growth strategy, the rm also develops new products for the mobile market. Apple grows because new products and models allow the rm to generate more revenues. This intensive growth strategy agrees with the company’s generic strategy by focusing on unique Apple products that can increase
7/13/2017
Apple’s Generic Strategy & Intensive Growth Strategies - Panmore Institute
Market Penetration. Apple uses market penetration as its second most signicant
intensive strategy for growth. Market penetration involves gaining a larger market share by selling more of the company’s current products. For example, Apple applies this intensive strategy by selling more iPhones and iPads to its current target markets. In particular, the rm achieves more sales by adding more authorized sellers in its current markets. This approach is important in penetrating markets where Apple has not yet achieved a signicant position. Also, under the market penetration intensive growth strategy, Apple uses promotion through various websites and media outlets. For example, advertisements encourage more people to buy Apple products. This intensive growth strategy agrees with Apple’s broad differentiation generic strategy because it addresses the need to broadly capture the market. By selling more current products to more customers in current markets, this intensive strategy enables Apple to reach customers in all market segments. Market Development . Apple uses market development as the least signicant of its
intensive strategies for growth. Market development involves creating new markets for new products or entering entirely new markets. This intensive growth strategy is similar to market penetration, but market development focuses on establishing presence in new markets. Apple applies this intensive growth strategy by autho rizing new sellers in markets where the company does not have any presence yet. Thus, this intensive strategy applies mainly in developing markets. Also, Apple implements the market development intensive growth strategy through novel products. For example, the company innovates to offer goods like Apple Watch, which is an entirely new product line for the rm. Through Apple Watch, the company develops its reach in the smartwatch market. This intensive growth strategy agrees with Apple’s generic strategy of broad differentiation by expanding the company’s market reach. Such generic strategy requires that unique products should be offered to different market segments, which the company reaches through market development.
Strategic Analysis and Recommendation for Apple Apple’s generic strategy of broad differentiation helps the company stand out. Differentiation in function and design supports the rm’s goal of leading the market through innovative products. Innovation is at the heart of Apple’s business. However, to improve its application of this generic strategy, the company must aggressively penetrate markets, especially developing countries where Apple’s market reach is still limited. Apple’s main intensive growth strategy is product development. Market penetration and market development are second and third in priority, respectively. These intensive
7/13/2017
Apple’s Generic Strategy & Intensive Growth Strategies - Panmore Institute
growth strategies agree with and support Apple’s generic strategy. The rm is strong in product development through innovation. However, to improve performance, the company should emphasize more on market penetration and market development. Emphasis on these two intensive growth strategies can improve Apple’s resilience against aggressive competitors like Samsung.
References
Akan, O., Allen, R. S., Helms, M. M., & Spralls III, S. A. (2006). Critical tactics for implementing Porter’s generic strategies. Journal of Business Strategy ,27 (1), 43-53. Allen, R. S., & Helms, M. M. (2006). Linking strategic practices and organizational performance to Porter’s generic strategies. Business Process Management Journal, 12(4), 433-454. Apple Inc. Form 10-K, 2014. Apple Info. Bajarin, T. (2014, July 14). Understanding Apple’s ‘Continuity’ Strategy. Time. Kosner, A. W. (2015, February 16). Can Apple’s Expanded Strategy Push It To $1 Trillion Market Cap? Forbes. Parnell, J. A. (2006). Generic strategies after two decades: a reconceptualization of competitive strategy. Management decision , 44(8), 1139-1154. Pretorius, M. (2008). When Porter’s generic strategies are not enough: complementary strategies for turnaround situations. Journal of Business Strategy , 29(6), 19-28. Tres Team (2015, June 12). How Apple Is Bolstering Its Advertising Strategy With iOS 9. Forbes. TAGS: APPLE INC., GENERIC STRATEGY (PORTER'S MODEL) & INTENSIVE GROWTH STRATEGIES, STRATEGY COPYRIGHT NOTICE:
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