Models for Strategic Planning - Essay Example

Strategic Planning and Apple, Inc. BY YOU YOUR SCHOOL INFO HERE HERE Strategic Planning and Apple, Inc. Apple Inc. is the largest technology company in the world, as justified by sales revenues compared to competition in this industry. Apple provides a diverse variety of products targeted at consumers and business leaders, including the much-heralded iPhone, the Mac personal computer, and a variety of Internet-capable devices. Apple positions itself among competition by focusing on branding as a differentiation tool.

The company’s brand personality is about imagination, lifestyle, passion, and hopes (Robinson, 2009). This consumer-centric model of business has given Apple a great deal of brand loyalty by important target markets as the company is able to develop meaningful and lasting interpersonal relationships with consumers (Goodson, 2011). The first strategic management model relevant to Apple, Inc. is Porter’s Five Forces model, a template by which an organization is able to understand the external market and the various threats that will impede or enhance future strategic success.

This model recognizes five distinct threats, including threat of new competitive entrants, the level of bargaining power of consumers and suppliers, the degree of competitive rivalry in an industry, and threat of substitutes (see Appendix A). Apple utilizes this strategic management model to understand whether switching costs for consumers are high or low, which can lead to revenue declines when consumers select competing products (Porter, 2012). This model of strategic management allows the organizational leadership to examine whether new competitors in this industry will potentially seize market share and also serves as a template to observe the competitive marketing strategies being undertaken by main competitors.

The Ansoff Matrix is a four-quadrant strategic management model that identifies opportunities for strategic market growth, including diversification, new market penetration, product development and market development (see Appendix A). This model is largely used to identify risks, allowing the business leaders to recognize where the organization is currently positioned and how it should expand to achieve the most effective revenue growth and competitive advantage. By understanding how to position the business for effective market growth, this model ensures proper allocation of financial and human capital resources in one quadrant area most likely to lead to profit gains.

Both the Ansoff Matrix and Porter’s Strategic Management model recognize the importance of understanding the external market and competition to achieve strategic results. Both identify competitive risks to the business which is critical for establishing an appropriate marketing branding strategy needed to differentiate in saturated markets. These models are quite different, as well, as Porter focuses on competitive factors while the Ansoff Matrix takes into consideration many more important environmental factors not necessarily related to consumers and partners in the value network.

In this environment where there are many competitors, such as Dell and Hewlett Packard, it is important to conduct routine analyses of branding strategies and promotions to determine how best to outperform competition strategically. Apple currently uses a premiumization strategy, positioning the business in the minds of consumers and B2B customers as a quality leader. When a company is able to position as an exclusive brand, it allows the business to charge premium prices (Chaudhuri & Holbrook, 2001).

These models illustrated the complex dynamics of competitive behavior in the technology industry and the many factors related to consumers, suppliers, marketing, and business development that can be impeded by externalized forces. Both models are appropriate for Apple as this business must consider the attitudes and values of consumer markets, adopt a consumer-centric relationship program, and also consider the potential risks of business expansion in certain areas or markets. ReferencesChaudhuri, A.

& Holbrook, M. (2001). The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The role of brand loyalty, Journal of Marketing, 65(2), pp. 81-93. Goodson, Scott. (2011). Is Brand Loyalty the Core to Apple’s Success?, Forbes Magazine. Retrieved December 11, 2012 from http://www.forbes.com/sites/marketshare/2011/11/27/is-brand-loyalty-the-core-to-apples-success-2/Porter, M. (2012). Porter’s Five Forces: A Model for Industry Analysis. Retrieved December 12, 2012 from http://www.quickmba.com/strategy/porter.

shtmlRobinson, P. (2009). Apple’s Marketing Strategy, Marketing Minds. Retrieved December 12, 2012 from http://www.marketingminds.com.au/branding/apple_branding_strategy.htmlAppendix A: Two Strategic Management Models for Apple, Inc.