Apples Implementation of the Hybrid Strategy - Essay Example

Apple is a multinational company based in America that deals in the design and sale of computer software personal computers and a wide range of hand held gadgets. Apple Inc. draws its reputation from the hardware products branded as Macintosh, iPhone, iPad, and iCloud. The company began its operations in 1976 with the founder Steve Jobs (W.L. Hill, 270). Since then, the company has grown to gain global recognition to the daily consumers of electronics. The iconic design of the company has enabled it to maintain a distinct brand image. Despite the fact that Apple deals in a wider range of electronic products, the company has a unique way of treating every product line. Interestingly, the company treats each product as standalone unit of business. Apple is ranked the sixth amongst the mainstream computer manufacturers in US. This translates to a 3.5% of the market share compared to a 2.4% global market share that places the company ninth amongst the global list of computer makers. Prior to those years that Apple maintained a distinct position, the growth in technology and network has adversely shaken the predominance of Apple. As at the fourth quarter of the year 2012, Apple posted US$ 45million worth of net profit. This is an equivalent of US$0.13 per share. To prove the loss of dominance of the Apple brand, a similar quarter of the company revenue three years from 2012 indicates a US$ 0.19 per diluted share or a net profit of US$66 million. This paper discusses the impact of evolution in technology to the operations of Apple Company. Apple applies a corporate branding strategy that revolves around consumers maintaining an emotional experience with the products of the company. The success of Apple over the years is pegged on development of an emotional brand that obligates the company to adopt a distinct humanistic corporate culture. The company has unique verbal and visual vocabulary and strives to establish a lasting connection with its consumers. In the 1970s, Apple ignited the revolution of personal computers within the market. This engineered the production of the Apple II, before the reinvention of the personal computer in the 1980s with the introduction of the Macintosh. The driver behind the branding of Apple is the desire of the company to bring the best personal experience of computing amongst the most common users of computers: educators, students, creative professionals, and overall consumers of electronics. The company, therefore, relies on a corporate branding strategy through internet or software offerings and innovation of hardware. The core of the survival and growth of the Apple brand is invention and reinvention. The company adopts a strong talent retention program that enables emergent and updated software developers to yearn working at the company (W.L. Hill, 272). The standards of electronics produced by Apple Company reflect the genuine commitment of the company to maintain customer loyalty by enabling them to experience the brand by gradual provision of innovative products. While comparing the market shares of Apple to the giant market shareholder, Dell, the impact of technology on the performance of Apple is evident. Dell is the largest market shareholder with 26% in the US while HP, IBM, and Compaq all offer stiff competition to Apple. Despite this, the “Think Different” slogan guides the operations of Apple as it instigates a continuous spirit of innovation within the company. This spirit enables Apple to upgrade and develop its products inexhaustibly. To capture the consumers, Apple sells its products directly to the consumers through the phone, the internet and through Apple stores. The general environment in which Apple operates presents a market segmentation that identifies the nature of the industry in which the company operates. The political and legal segments do not influence the opportunities that the company enjoys within the market. However, the economic segment presents a situation that makes the commodity status of personal computers a competition determinant of the market share. The popularization of the personal computers is evident as the numbers of people using personal computers grew from 5.5 million to 65 million between the years 1982 and 1992. Many organizations are increasingly embracing the digital era as an essential to the growth of global businesses. Many governments and academic organizations have shown increased commitment to digitalization of their processes, hence contributing massively to the growth in demand for computers. In the 1990s, Apple lost its dominance to Dell. The technological segment indicates a rapid evolution of the technologies applied in computing. Apple continues to lead the pack in terms of producing the most recent technology, despite other companies’ efforts to modify the designs applied by Apple. Demographically, Apple has opened stores at strategic points within the markets that attract digital generations hence contributing to the increased visibility of Apple products. The emergence of new technology has enabled the industry to face the threat of new entrants (W.L. Hill, 275). Fierce competition exists with the increase in populations with adverse knowledge in computer programming. Many firms aim to penetrate the computer market, hence facilitating the emergence of computers that capture the market through the diverse pricing mechanisms. Apple levies high prices for their products, especially with the release of new line of innovations. On the other hand, many computer and electronic companies release new products but at relatively lower prices. Therefore, many consumers purchase such products due to the pricing system. Contrary to the earlier years when consumers had partial information about products, individual buyers today have full information about their desired products. Many consumers claim better services at lower prices. The bargaining power of consumers is relatively low due to the existence of substitutes. The establishment of an ecosystem similar to that of Apple has enabled Google to gain a competitive advantage over Apple. The Android system was found on many of the most successful global tablets and smart phones. In an industry that has commoditization as a norm, differentiation is the best way to attain a competitive advantage. The ability of Apple to operate its product line as a standalone business unit is the first step towards the success of Apple in differentiating its products. The company managed to outsource most of the assembly work, manufacturing, transportation planning, and logistics as a way to attain cost leadership. This strategy helps the company to have an integrated supply chain and a distinct distribution channel (W.L. Hill, 278). The differentiation strategy must aim to complement the company’s philosophy within each sector of both the support and primary activities. The “Think Different” philosophy should link the innovation of Apple with several technologies and new product offerings. This strategy will enable the company to take a lead in penetrating the electronic markets by introducing such specifications as build-to-order models and consumer focused services. The advertisement should be more aggressive to capture the Macworld Conference and Expo. Capitalization on the brand power is a means by which Apple can implement a successful differentiation strategy. The company enjoys customer loyalty through its consumer-focused services as well as their aggressive advertisement strategies. In addition to that, the company should maintain the established delicate alliance with other computing service companies such as Microsoft and Dell in order to enjoy an all win situation from the giant companies within the industry. Recommendations Apple should consider the continuous implementation of the hybrid strategy. This strategy is generated from integration of the differentiation strategy and the cost leadership strategy. The company should outsource its process and further promote economies of scale in order to decrease the costs as well as guide the development of the “Think Different” philosophy. The Human Resource Managers should direct more finances to the retention of talent to give a distinct position on the innovative culture of the company production processes. Through the “Switchers” campaign, Apple aims to emphasize their commitment to improve their customer-focused services and maintain their aggressive advertisements. The company should persist on funding this campaign in order to drive more users from Microsoft to Apple, and expand the market shares. Apple should strive to diversify its production beyond the competencies of the consumer electronic market. The company should build new competencies that enable it to fight for predominance through self-enhancement (W.L. Hill, 280). The company should introduce new market edges to cater for the low income earners, while maintaining the quality of products. Apple, furthermore, should establish a close relationship with educational and governmental organizations, which are the major contributors of the revenue source for the general PC market. The core markets of Apple, after all, are in schools which are characterized with low budgets and limited growth of the sector. In a bid to capture more users from Microsoft, Apple should enhance the compatibility of its hardware and software to fill the gaps associated to incompatibility of their products. In conclusion, Apple’s implementation of the hybrid strategy will give the company a competitive advantage in the industry. With the improvement of the compatibility of Apple’s hardware and software, the dominance of Apple will come into realization given the fact that many computer makers do not have a strong innovative culture as exhibited by Apple. Works Cited W.L. Hill, Charles. Case 20 Apple Inc. 1976-2013 (2013): C269- C283. Print. Read More