Cost Leadership Strategy of Apple

Apple, Inc. started out as a concept driver when they reached new market showing fast growth in the beginning. Then, they came up with new knowledge and competencies as concept learners. They were also pioneers in the industry showing fast innovation. They reached a mature life cycle with economies of scale when they had to widen their product lines. Apple, Inc. went through all the stages of technological change. However, in the fast growth stage they were not prepared for what lay ahead, so they had to come up with different strategies to have the competitive advantage. Every stage requires development of their employees and more financing resources (Mello, 2011).

This paper will discuss a company called Apple computers. It will further access the market forces and strategies used by apple.

Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.”

We chose to research Apple Incorporated, one of the most innovative companies of our generation. It is safe to say that nearly every one in the US and many foreign countries have used or at least heard of Apple products. We will be looking at the macroeconomic variables that impact Apple’s business as well as how the current developments in the industry have impacted Apple’s financials and we will also look at how Apple competes with other firms in the same industry.

I learned that Apple is a juggernaut when it comes to their technological products and marketing goals. Apple focuses on the needs of customer’s light years ahead of their competition and even before most consumers have realized they want Apple’s products. Through their innovative marketing involving social media, word of mouth, Apple Stores they have convinced consumers about the high value of their product even lending to the formation of a “Mac cult” for its diehard fans. The way ahead for Apple is not to lose sight of its brand loyalty and continue to service the customers and entice them with the brand’s prestige. Even with the death of Steve Jobs, I believe Apple forge ahead to differentiate itself from the markets they are in.

Apple has grown into one of the largest technology manufacturing companies and has become known for innovations in both technology and aesthetically pleasing products. Apple more well-known devices include the I-Phone which revolutionized the mobile phone industry, and the I-Mac Laptops and home computers which have been found huge success and are popular among a variety of age groups and demographics. In the mobile phone industry, Apple’s main competitors would be Google who is the creators of the Android operating system which is used by a majority of non-Apple phones. As for the computer industry, Apples main competitors consist of Microsoft who had created the Windows operating system which is used and pre-installed on a large portion of competitor computers, this includes companies like Lenovo, Dell, Hewlett-Packard, and Acer. With so much competition in this area and the ever evolving ability of technology as described by Moore’s Law, companies can lose their competitive edge if they become complacent and stop trying to innovate.

Apple Inc., designer of the ever-popular Mac, iPhone, iPad, and Apple Watch, continued successful is linked to the company’s utilization of strengths and opportunities, while minimizing threats and overcoming weaknesses. Apple Inc. is known by many as one of the most successful companies in the world today (Rawlinson, 2017). An analysis of Apple Inc., strengths, weaknesses, opportunities, and threats highlights areas of concern and showcases reasons for growth.

The cost leadership strategy seeks to improve profit margins by bringing down the costs of producing while enabling the organization to still charge market prices. They also focus on increasing the market shares through lower pricing, enabling the organization to continue to reach profits because of reduced costs. As with any organization the goal is to minimize cost directly to the organization providing the delivery of products or services. According to Barney (2007) low cost leadership strategy takes pride in initiating its costs advantage abilities to charge lower prices while reaping the rewards of higher profits.

The market is never static and the preferences of the customers keep changing. In this case the executives at Apple must always ensure that the needs of the clients are effectively addressed at all times. In the same way, the industry has become very competitive in the recent past and the organization has to find ways and means of staying ahead of its competitors. In this case, innovation plays a major role in ensuring that new products are constantly produced by the organization.

Cost leadership strategy is used by firms to surpass their competitors by reducing their cost from production of goods or services and is part of the business level strategy (Hills et al, 2007). There are four factors that influence a company’s ability to build and sustain a competitive advantage: efficiency, quality, innovation and responsiveness to customers. These factors allow a company to (1) differentiate its product offering to create greater perceived customer value and (2) lower its cost structure, which will then build a competitive

1. What are the chief elements of Apple’s overall competitive strategy? How well do the pieces fit together? Is the strategy evolving?

Apple Incorporated, formerly known as Apple Computers Incorporated, and more commonly known just as Apple, has lead the way in technology and innovation for consumer electronics with their slender storage capacities, vibrant displays, and incredible touch screen products. When they first started, their focus was more on personal computers for customers, but as the company has aged, so has their focus expanded towards this idea of consumer electronics as a whole. Seeing as they now offer popular devices including, but not limited to, computers (Mac Book), home theater (Apple TV), phones (iPhone), tablets (iPad), and media (iPod), it can clearly be

Even though Apple has encountered many setbacks, it continues to bring new and improve products to the market. Apple’s competitive strategy has been innovation. They have made an extraordinary effort developing, implementing, and executing its very unique strategy through innovation which has resulted in new product, and the enrichment of the existing ones. More specifically, Apple attempts to meet and supply the needs of a global market, by offering eager and enthusiastic consumers with innovated and high-quality products and services. Apple has employed a differentiation strategy linked to innovation with its three core products (computers, personal media player, mobile phones, tablets and other accessories). A key piece of their strategy involves meeting the needs of the converging digital electronics and computer markets. Apple has elected to implement its strategy by designing and developing proprietary operating systems and software technologies, thus allowing for strict protection of its intellectual rights.

A competitive strength assessment reveals that Apple’s success is unmatched. They have been able to maintain the leading industry position while developing and introducing new products. Stock price is continuously rising and products are always improving. The current products are improved with software updates and new products are improved by

Apple was established as an IT company dealing in exclusively in computers. However, competition in the technology sector forced the firm to focus on other consumer products. The diversification strategy has seen Apple’s sales grow tremendously in the last decade, earning the firm the No. 1 brand position at Forbes. The Apple brand is recognized on an international scale and enjoys a strong recognition thanks to its aggressiveness when it comes to creativity and innovation (Tar, 2013). It has a large number of loyal customers who would purchase the new products regardless of the market price, which guarantees profits from the new division.