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Analysis of generic strategies used by Apple

Discuss about the Business Startegy of Apple Inc. 

Apple Inc. is a multinational technology based organization of American origin. The headquarter of the company is located in Cupertino, California which designs, sells and develops computer software and consumer electronics. The hardware based products of the company include, iPad tablet, iPhone, Mac personal computer and many more. The software based products of the company include, macOS, iOS, Safari web browser, iTunes, iLife and many more. The company was established by Steve Jobs and Steve Wozniak in the year 1976 for the purpose of selling personal computers (Apple. 2018). The company name was thereby incorporated as Apple Computer Inc. The sales of the products that were offered by the company had seen a huge momentum in the year 1977. The organization thereby went public in the year 1980. The revenues of the company further increased in the next few years and the innovative products of the company had been the major attraction for various customers (Apple. 2018).

The report will be based on the analysis of the generic strategies which have been suggested by Porter. The ways by which the generic strategies have affected the competitive position of the company will be a major part of the discussion. The culture of the organization and the formal structure of Apple Inc. will also be analysed in detail.

The generic strategies and the intensive growth based strategies of Apple are directly related to the growth of the company in the market. The most important factors that are a part of the generic strategies formed by Apple are, marketing, pricing and other major business areas. The generic strategies that have been implemented by Apple have made the company one of highest valued company in the world (Adner, Ruiz-Aliseda and Zemsky 2016). The generic strategy of Apple has thereby shown that it has played the role of the major determinant of the advantage that has been gained by the company in the industry. These strategies have provided the company with an edge over its major competitors in the market like, Samsung, Blackberry and LG. The company has always shown high rates of innovation and the major emphasis has been on the excellence. This has been able to provide the company an opportunity to create a different position in the market. The position that has been gained by Apple in the market has shown the effectiveness of the company and the strategies that have been implemented in the market (Alvesson and Sveningsson 2015).

Organizational culture of Apple


The generic strategy that has been implemented by Apple is the broad differentiation strategy that has been suggested by Porter. This strategy mainly focusses on the differentiation of the company and the products that are manufactured by the company. The differentiation strategy has thereby been able to provide a scope to the company to stand out in the mobile technology industry. The emphasis that has been provided by Apple on the elegant design of its products and the user-friendly features have also been able to affect the sales of the company in the market. The key features of the products that have provided Apple with a competitive edge in the market are, cutting edge design and aesthetics (Ashkenas et al. 2015). The products of the organization have been designed for a wide range of customers in the world. The generic strategy applied by Apple has been a major reason behind the huge growth of the company in the market. The different products of the firm are designed and targeted towards different customer base. For example, the MacBook of Apple is targeted towards the business organizations and individuals. The company has thereby been able to maintain the leadership in the high-end product market and the premium customers (Bayraktar et al. 2017). The objectives of Apple have also been affected by the broad differentiation strategy. For example, for the purpose of applying this strategy the company needs to continue its emphasis on the innovation based capabilities with the help of development and research based activities. Apple thereby needs to continue with the development of the innovative products to make the firm stand out in the competition in the market. The competitors can however catch up with the new product and provide tough competition to Apple (Bell, Dyck and Neubert 2017). However, the differentiation based strategy compels the company to create improve its offerings on a continuous basis. This helps in the process of continuous innovation of the products that are manufactured by Apple. The company thereby needs to ensure that the reach of the products is high and the customers are able to take advantage of the products that are offered by Apple. The company competes in all the different segments of the market with the major players in the industry (Bortolotti, Boscari and Danese 2015). Another strategic objective of Apple which is developed based on the differentiation strategy of Apple is to ensure the expansion of the market reach of the products that are manufactured by the company. The differentiation strategy of Apple has helped the company to stand out in the competition that is provided by the other business organizations. The improvement of performance of the company is based on the innovation based capabilities of the company. Innovation has always proved to be a major part of the successful operations of Apple’s business (Bustinza et al. 2015). The company thereby needs to improve the innovation in its products in order to further improve the application of the generic strategies. This can also help the company to increase its market reach the penetrate the various markets easily. The generic strategy based on the focus on a niche market is used by Apple in the market. The usage of the focus strategy by Apple is based on the differentiation of products that are manufactured by the company. The organization has been focussing its activities on a small customer segment. The premium customers are targeted by the high quality and high cost products of the company (D. Banker, Mashruwala and Tripathy 2014). The computers of the company are designed for the purpose of targeting a narrow segment of the market. The differentiation based strategy is used by Apple for creating the value of its products that are offered in the market. The company is thereby able to address the gaps that are left unaddressed by the other major players in the market. The organization has limited its innovation of the new generations of products for the purpose of focussing on the innovation based capabilities of the new products (Delmas and Pekovic 2015). The Macintosh computers of Apple are completely different from the computers that have been developed by the other organizations. The major competitor of Apple in the industry of personal computers is Windows. The company has been able to create a differentiation in the market in spite of the high levels of competition that has been provided by Windows. The unique interface that is provided by the phones and computers of Apple to the customers has been the major reason behind the position that has been created by the company. The differentiation and focus strategy that has been implemented by Apple has therefore been able to provide a competitive position to the company in the market (Earnhart and Leonard 2016).

The organizational culture of Apple has been the major reason behind its success in the technology industry. The culture of the company helps in the determination of the new policies, new strategies and the determination of the capabilities of implementing change in the different processes. The employees of Apple are developed and the further integrated effectively within the culture of the company. The culture of the company thereby facilitates rapid pace of innovation in the various organizational processes (Hahn, Lee and Lee 2015). The innovation based capabilities of the company are thereby visible in the various products like, iPad, iPhone, Apple Watch and many more. The company has been able to fine tune the culture in such a manner which is able to meet the dynamics of the effective business environment. The main features of the culture of Apple are based on the ways by which the leadership of the firm is supported by the key features that can fit the business (Huhtala et al. 2015). The features of the culture of Apple are as follows,

  • Top-notch excellence – The organizational culture of Apple has involved the policy which is mainly based on the selection of the best workers. The late CEO of the company Steve Jobs was mainly known in the market for the ways by which the employees were fired by him if they failed to meet the expectations. The tradition that had been formed by the ex-CEO and the founder of the company has been continuing under the leadership of the current CEO Tim Cook. The high levels of excellence have been the major factor related to the success of the company in the industry (Kaya 2015).
  • Creativity – The employees of Apple are mainly selected and recruited based on their knowledge skills and the creative capabilities. The organizational culture of Apple is mainly based on the importance that is provided to creativity. The employees of the organization are thereby involved in the development process and the design of the products as well. The major characteristic of the culture of Apple is thereby helpful for the firm to maintain a capacity which can develop the solutions to fulfil the business needs and the needs of the consumers (Körner et al. 2015).
  • Innovation – The employees of Apple are mainly selected on the basis of their innovative capabilities which have helped the company to create a different position in the industry. Apple has frequently received the position of the most appraised company in the world. The employees are thereby trained for the purpose of providing innovative ideas with the help of their individual performances. The organizational culture of Apple mainly helps in the success of the rapid innovation which is considered to be a major part of the business (Lin 2014).
  • Secrecy – Steve Jobs has thereby developed the company in such a manner which has high levels of secrecy in the various operations. The levels of secrecy have been a major part of the culture that has been implemented by Apple. The culture has thereby been able to support the innovation based capabilities that are possessed by the company in the industry. The employees of the company have also agreed to the culture of secrecy that has helped Apple to create a hype about the product in the market. The secrecy is mainly based on the policies, the employment based contracts and the rules of the company. This major aspect of the culture of Apple is helpful in the protection of the business from the negative effects that are caused by employee poaching (Linton and Kask 2017).
  • Moderate level of combativeness – The organizational culture of Apple has been mainly based on the moderate levels of combativeness. This feature is further based on the combative approach that Steve Jobs has related to leadership in the company. Steve Jobs was known in the industry commonly for the ways by which he has been able to challenge the employees so that he can ensure that the capabilities that are required for working in Apple are possessed by them (Mills 2017). The ex-CEO of Apple has been challenging the employees regarding the capabilities that are possessed by them with respect to the innovativeness and the levels of unique ideas that are provided by them. The culture of the company has been further changing to a less combative nature after the appointment of Tim Cook as the new CEO of Apple. The organizational culture has now become less combative and more sociable in nature (O’Reilly III et al. 2014).
  • Working under huge pressure – The employees of Apple have been provided with extensive amounts of training regarding the ways by which they are able to work under pressure. The skills and the ability of the employees in handling the work pressure at all the levels is important for them to work in the company in an efficient manner. Tim Cook, the current CEO of Apple has been able to set an example for the employees in terms of the loyalty and the long hours of working in the office. The CEO is known among the employees for sending emails at odd hours of the day (O'Neill, Beauvais and Scholl 2016).
  • Focussing on inclusion and diversity – Apple has attempted at integrating the factors like inclusion and diversity as the major cornerstone of the culture of the company. The company also has a post that is based on inclusion and diversity which has been held by Christie Smith. The employees who have been hired by the company within the years 2016 to 2017, mainly belong to the various underrepresented groups in the technology industry. The senior level of the management of Apple has however been criticised for the lack of the diverse employees (Salavou 2015).


The major advantages that are provided to Apple by the culture that is followed by the employees are based on the high levels of excellence along with innovation and creativity. The culture of Apple has been able to support the leadership of the company in the industry in which it operates. The major human resource based characteristics that are able to empower the company are based on the ways by which Apple can stand out in the competition and keep their operations much ahead of the competitors in the industry. The features of the culture of the organization are the most important for enabling success and ensuring the competitive advantage of the company in the market (Van der Voet 2014).

The disadvantages that are related to the organizational culture of Apple are based on the ways by which the culture of the company poses challenges to the moderate combativeness and the levels of secrecy. The atmosphere related to secrecy that is followed in the organization is based on the rapport among the workers of the company. The degree of combativeness that is used in the company further limits the morale of employees of the company. The issues thereby indicate that the organizational culture of Apple needs improvements in some of the areas so that the capabilities of the human resources can be strengthened in the process (Worley and Doolen 2015).

The organizational structure of Apple is a major contributor to the successful innovation based capabilities of the company. The structure of the company also helps in the creation of major opportunities that are related to the growth of Apple in the market. Many limits are also placed by the structure of the company on the ways by which the operations can be developed. The organizational structure of Apple is based on a traditional hierarchy based method. The success of the organization is mainly based on the leadership and innovation based capabilities (Xenikou 2017). The structure of Apple is thereby successful in providing support to the leadership and the work process of the employees as well. The organizational structure that was followed under the leadership of Steve Jobs had gone through some small changes after the appointment of Tim Cook as the new CEO of the company. These changes have been made by the new leader for the purpose of providing the highest levels of service to the customers and suit the needs of the market (Worley and Doolen 2015).

The organizational structure of Apple has helped the firm to innovate the products in a rapid pace. The development of the new products like the Apple Watch is mainly based on the support that is provided by the organizational culture. The major features that are related to the organizational structure of Apple are as follows,

  • Spoke-and-Wheel Hierarchy – The view that is provided by the organizational structure of Apple mainly suggests that it has been able to show considerable levels of hierarchy. The decisions that were made in the organization under the leadership of Steve Jobs had to pass through his office before the approval was provided. On the other hand, under the leadership of the current CEO of the company Tim Cook, the hierarchy in the company has seen slight changes (Lin 2014). The levels of collaboration among the managers and the employees have increased. The hardware and the software teams have also started working together in the different projects of the company. The vice presidents of the company have received more autonomy. The structure of the company has thereby become less stiff in nature as compared to the type of stiffness that was present under the leadership of Steve Jobs (Adner, Ruiz-Aliseda and Zemsky 2016).
  • Function-based Grouping – The upper level of the management of Apple has followed the organizational structure of function-based grouping. The senior vice presidents of the company who work under Tim Cook need to handle a specific function of the business. For example, the company has a Senior VP for marketing, a Senior VP for industrial design and a Senior VP for the retail based operations. The structure of the organization helps in addressing the various needs of the business in terms of the different functional areas (O'Neill, Beauvais and Scholl 2016).
  • Product-based Grouping – The lower levels of the organizational structure of Apple is mainly based on the process of product-based grouping. This element of the structure has been derived from the concept of divisional organization structure. Many other vice presidents work under the senior vice presidents of the company. This is a major aspect of the organizational structure which enables the company to address the various products or the product components (Delmas and Pekovic 2015).

The advantages that are provided by the organizational structure of Apple are based on the support that is provided by the strong control on the operations of the company. The hierarchy thereby empowers the top leaders of the company to control all the operations that are taking place in the organization on a regular basis. With the help of the hierarchy that is present in the organization the processes of product-based grouping and function-based grouping are implemented. Apple thereby ensures that the CEO and the senior VPs have total control over the operations that are going on within the company (Delmas and Pekovic 2015).

The disadvantages of the organizational culture of Apple are based on the low levels of flexibility in various processes. The hierarchy in the structure thereby prevents the lower levels to respond in a flexible manner to the demands in the market and the business needs as well. Tim Cook has been able to make some changes in the flexibility of the structure of Apple which has increased the collaboration among employees and teams in the organization. The structure of the organization however does not support rapid changes in the various processes (Alvesson and Sveningsson 2015).

Conclusion

The analysis has shown that Apple has been able to create a competitive position in the market with the help of the strategies that have been implemented in the various organizational processes. The generic strategies based on the broad differentiation of the products have been a major source of the competitive advantage of Apple in the market. The differentiation of the products of Apple form those provided by the other organizations have been the major source of competitive advantage for the company. The focus strategy on the other hand has provided opportunities to the company regarding the ways by which it is able to focus its promotional and marketing activities on a certain group of people in the market. The generic strategies of the company have been supported largely by the innovative culture of Apple. The company has been constantly innovating the products for the purpose of maintaining its competitive advantage in the market. This has further led to the inclusion of innovative and diverse employees in the company. The organizational structure of the company has also been related to the innovative culture and the differentiation strategy. The innovation levels have been boosted by the effective and strict leadership of the late CEO of Apple Steve Jobs. However, after the appointment of the new CEO Tim Cook the strictness levels have been reduced and the innovation based capabilities have remained the same with the collaboration between the employees. This has helped the company to increase its capabilities in the market. The report can be concluded by stating that Apple has been successful in maintaining a successful position in the market with the help of its innovative culture and structure which is supported by the generic strategies. The support provided by the culture of the company to the structure and the culture of Apple has been the major behinds the success of the company in the industry. The company has however faced some issues based on the strict culture which have been further resolved after the appointment of Tim Cook as the new CEO.

References

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Xenikou, A., 2017. Transformational leadership, transactional contingent reward, and organizational identification: The mediating effect of perceived innovation and goal culture orientations. Frontiers in psychology, 8

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