The Generic Strategies and the Segmentation Strategies of Apple - Research Paper Example

According to Porter (1998), a firm’s success in strategy depends on how it positions itself concerning its environment. It is, therefore, of fundamental concern that Apple company should respect its business operating environment. Apple Company should, therefore, focus on its cost and differentiation advantages as well as segmentation to avoid dwindling. Porter (1998) asserts that generic strategies are divided into three categories that include, cost leadership, differentiation, and focus. Due to its large size, Apple Company has formed a large conglomerate, which has enabled the company to edge out its competitors.

Thus, the large company has gained a competitive advantage as well as economies of scale over other similar companies in the same market. Apple Company can operate at a low cost and gain market leadership. Besides, the company can produce at a lower cost than other companies, even though the company’s products are expensive to afford and maintain. While utilizing cost leadership, the company can hire labor at a lower cost, and maintain, and train them at a lower cost to deliver the lowest possible cost of production (Browning, Russolillo, & Vascellaro, 2012). The company thus decreases the costs, which is an important element of the value chain. Furthermore, the company can use the brand and its marketing skills as a premium pricing policy to gain a competitive advantage (Burrows, & Satariano, 2012).

In another strategy, Apple Company uses differentiation as a marketing strategy for its products. Through differentiation, the company uses an alternative operating system, which aims at satisfying the needs of the customers through a sustainable competitive advantage (Browning, Russolillo, & Vascellaro, 2012). The strategy has correspondingly enabled the company to desensitize prices and focus on the value that generates a comparatively higher price and a better profit margin. For the company to benefit fully from differentiation, it needs to segment the market to target products at specific segments, therefore generating higher average prices (Pui-Wing, 2001).

 Apple Company has incurred an additional cost in differentiation to create a competitive advantage. However, the costs incurred by the company have been offset by the company’s ability to generate revenue from the sale of its products. To Apple’s advantage, its competitors have not copied the company’s differentiation strategy. Therefore, the company has remained to be diverse from others. Apple has therefore benefited from the incentive to innovate and improve continuously (Pui-Wing, 2004).

Apple Company can prevent itself from declining by employing a generic strategy known as a niche strategy or focus strategy. The company can adopt this strategy if it cannot afford a wide-scope cost leadership or a wide-scope differentiation strategy. This strategy is useful to the company if it decides to focus on a narrow scope of the defined segment of the market. By using this strategy, the company will be able to generate a competitive advantage specifically for the niche. Apple Company has focused on differentiation focus other than cost differentiation in the market to make a niche (Browning, Russolillo, & Vascellaro, 2012).

Apple Company is the world’s leading segmentation-implementing company. The segmentation strategy implemented by the company has led to the company acquiring an astonishing rise in sales, revenues, profits, and business rankings. According to recent research, the company has been able to amass more cash than the US government, makes more than two-thirds of the proceeds in the smart-phone business, makes more than 50% of the proceeds in the whole personal computer industry, and has gained a reputation as the number-one valued company in the United States (Burrows, & Satariano, 2012).

The company has implemented a vertical market implementation strategy that involves creating a product for each use case. Moreover, the company can sell the products at the right price for only the profitable market segment. Using this strategy, the company has also been able to identify the market segment that pays more, for the specific product that the company provides. Moreover, a nice and easy-to-use user experience as well as high-quality products that offer seamless integration characterizes the company’s products. More importantly, the company ignores prospective buyers who are not willing to pay their price (Burrows, & Satariano, 2012).

In conclusion, we can learn that the Apple Company's marketing strategies have encouraged the company to grow and scoop high profits from the two of the largest competitors combined. This is because the company has focused on product and market differentiation that it has used to achieve its success. The company has used this strategy to access leading scientific research on product development and to gain a highly skilled and trained productive development team. Moreover, through market segmentation, the company has developed a highly competent sales team as well as improved the company’s reputation for the development of high-quality products and innovation.