Abstract
The competitive strategy of Apple Inc., as well as its analysis and organizational suggestions, are the main topics of this paper. The key topics covered include how Apple uses the Resource-Based View (RBV) theoretical framework to differentiate its products, create a seamless ecosystem of products and services, and integrate vertically. Apple’s competitive approach has many benefits, including solidifying its position as a technological leader, promoting brand loyalty, and raising consumer happiness. The difficulty of maintaining a product’s uniqueness over time, premium price tag, restricted compatibility, restricted interoperability with other hardware and software, and the need for high R&D and manufacturing capacity costs are drawbacks, too. The suggestions for Apple include spending money on R&D to create new technologies, increasing the number of goods available, and encouraging corporate partnerships and collaboration.
Introduction
A market leader in technology, Apple Inc. is well-known for its wide range of goods, which include Macintosh (Mac) computers, iPods, iPhones, and iPads. Apple has carved up a strong competitive position in the industry because to its widespread presence and many distribution channels. As a result, the paper’s main points are an analysis of Apple’s competitive strategy, suggestions for the business, and the competitive strategy’s assessment.
Competitive Strategy Utilized by Apple
The case study claims that Apple has made use of the theoretical framework known as RBV (Resource-Based View), which explains how Apple’s unique resources and capabilities may lead to competitive advantages. The RBV design is compatible with a number of Apple Inc.’s competitive tactics. Therefore, differentiation in products and services is one of the competitive advantages the Apple Company utilizes. Apple has a long history of producing things that are distinctive from those of its competitors. According to RBV, Apple’s distinctive assets and competencies are what drive this differentiation strategy (Kryscynski et al., 2021). For instance, the cutting-edge and user-friendly layouts created by Apple’s design team are known. In turn, this has allowed Apple to create unique products like the iPhone, which revolutionized the smartphone industry. The iPad offers a versatile multimedia experience in addition, while the iPhone combines several features including a mobile phone, iPod, and internet communications device.
Apple has created an integrated ecosystem of interconnected products and services. Customers of Apple’s iCloud service, for instance, may access their data using any Apple product. This integration provides Apple a competitive advantage since customers are more likely to stick with Apple products if they have already invested in the ecosystem. As a result, third-party retailers, as well as Apple’s physical and online shops, sell iPad accessories as well as accessories that are compatible with other iPad models. 58.3 million iPads were sold during FY2012.
Apple develops its products with consideration for services, software, and hardware, exhibiting a high level of vertical integration. RBV demonstrates, however, that due to this linkage, Apple is able to manufacture closely related items and exert greater control over the user experience (Lee & Yoo, 2019). For instance, the iOS operating system from the case study was developed exclusively for Apple devices and has a smooth user experience. In addition, the integration of iTunes, the App Store, and the iBook Store has given users access to a whole ecosystem of digital material. Apple enhances the complete customer experience by offering a selection of linked software, services, and accessories.
Evaluation of Apple’s Competitive Strategy
Advantages
The strong brand reputation that supports the notion that develops customer loyalty, which may result in advocacy and recurrent purchases, is one of the competitive tactics.
Apple has built a strong reputation as a pioneer in cutting-edge technology and user-friendly interfaces because to its aggressive competitive practices. The ability to charge more for a product allows firms to increase customer brand loyalty. Apple’s committed customer base is willing to spend more because they believe that the company’s products are of more outstanding quality and dependability than those of competitors.
The seamless environment offers it a competitive advantage, making it possible for Apple to offer additional services like the App Store, considerably boosting its revenue (Ellitan, 2020). This is because it is difficult for customers to switch to another brand. For instance, Apple’s focus on design and quality has led to a committed fan base of customers and increased client satisfaction levels via the integration of hardware, software, and services, resulting in a unique ecosystem that enhances user convenience.
By giving you greater user experience control via integration, you may boost client happiness. Integration may also save costs by eliminating the need to purchase components from other manufacturers.
Disadvantages
It could be difficult to maintain a product’s originality over time since competitors might eventually catch up or provide comparable items. Additionally, this method requires significant research and development costs, which might be high.
However, in countries with strong pricing regulations, Apple products may not be readily accessible because to their expensive price. The closed ecosystem policy of Apple would restrict interoperability with third-party hardware and software, which would restrict consumer freedom (Kahupi et al., 2021). It is expensive to build and integrate the software necessary to create a unified environment. Involvement in the ecosystem may also make it simpler for people to switch to Apple products.
Vertical integration calls for significant investments in R&D and manufacturing capabilities. In addition, there may be a greater risk of supply chain disruption given how heavily the company relies on its manufacturing capabilities.
Due to the high price, Apple’s products may be less accessible to budget-conscious customers, which might impact market share. Additionally, customers sometimes want assistance connecting Apple products with other systems and devices owing to Apple’s strict compatibility requirements.
Recommendations for the Apple
Apple should continue to emphasize innovation to preserve its competitive advantage and maintain its competitive position. The company should invest in R&D to create new products and technologies that meet evolving client wants. As a result, this will help Apple maintain its market dominance and defeat competitors.
Additionally, Apple should think about extending its product line to increase revenue streams and reduce its dependency on the iPhone. The company should look into new product lines and technical advancements in order to improve its market share (Legun & Burch, 2021). As an example, Apple recently made a foray into the wearable technology market with its popular products, the Apple Watch and AirPods.
To take use of its advantages and increase its market reach, Apple should continue to foster partnerships and collaboration with other companies (Lee & Yoo, 2019). For instance, the partnership between Netflix, YouTube, and Flickr has made it possible to wirelessly stream media to television, including audio, video, and podcast content from a Mac or Windows PC as well as content from iTunes via AppleCare, which offers customer assistance and support for Apple products.
Conclusion
RBV claims that Apple’s unique assets and skills support the company’s competitive advantages in integration, a seamless ecosystem, and product uniqueness. These strategies enhance user experience control, customer satisfaction, brand loyalty, and strong brand reputation. They do, however, also have disadvantages, including high up-front investment costs, persistent product uniqueness, premium pricing, limited interoperability, and dangers associated with vertical integration. Apple can also maintain its market dominance and long-term growth by prioritizing innovation, growing its product range, and embracing strategic alliances and collaborations.
References
Ellitan, L. (2020). Competing in the era of industrial revolution 4.0 and Society 5.0. Jurnal Maksipreneur: Manajemen, Koperasi, dan Entrepreneurship, 10(1), 1-12.
Kahupi, I., Hull, C. E., Okorie, O., & Millette, S. (2021). Building competitive advantage with sustainable products–A case study perspective of stakeholders. Journal of Cleaner Production, 289, 125699.
Kryscynski, D., Coff, R., & Campbell, B. (2021). Charting a path between firm‐specific incentives and human capital‐based competitive advantage. Strategic Management Journal, 42(2), 386–412.
Lee, K., & Yoo, J. (2019). How does open innovation lead to competitive advantage? A dynamic capability view perspective. PloS one, 14(11), e0223405.
Legun, K., & Burch, K. (2021). Robot-ready: How Apple producers are assembling in anticipation of new AI robotics. Journal of Rural Studies, 82, 380-390.
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