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Apple Computer Corporate and Business Strategy
in pursuing this differentiation strategy. The scope, functionality, and ease of integration of these complements affect the “utility” consumers will gain from an Apple PC. Apple adopted a competitive strategy that vertically integrates these complementary products that include the iPod, digital cameras, PDA’s, and wireless devices.
In an effort to gain market share, Apple is pursuing several growth strategies. Obvious to this pursuit is international market expansion into the explosive Asian and European markets. Domestically, Apple is focusing on three variables concerning its growth strategy. Firstly, it must convert nonusers before they choose a competitor. Secondly, they need to enter new markets such as server based and mainframe computers. Thirdly, they are trying to win their competitors’ customer base through aggressive advertising and promotion. Apple can also attain domestic growth though convincing users to use their products on more occasions as in entertainment, research, and communication. Apple can likewise convince customers to use more of each product on each occasion and use their products in new ways. Who would have thought that a computer can be used to watch movies, play songs, talk over the internet using voice over IP technology, and much more?
Apple’s long range objectives are to obviously regain market share leadership and return the company to profitability and maximize shareholder return. Can Apple do so by continuing a differentiating strategy? Yes. To do so, every aspect of the way Apple conducts business and relates to its customers must be involved and driven by strategy. These goals are indeed attainable and the company actually made significant headway once it committed and aligned the entire organization to the differentiation strategy.
I would argue that the introduction of the iMac, with its sleek design, innovative features such as “Fire Wire” ports, “Blue Tooth” technology for peripherals, and its Herculean advertising budget, wasn’t Jobs at his best, but differentiation at its best. During this time, PCs were standardized, lacked unique form and features, and their open and interoperable system allowed for performance deviations.
It is also important to note that adopting a differentiation strategy by no means insinuates that a company is not concerned with cost. Although differentiation adds costs by way of higher quality inputs, skilled labor, higher advertising, and increased vertical integration, these costs need to be continually assessed an evaluated so that they can be improved. Apple made significant progress in this arena. They streamlined operations to the point where they now have the highest inventory turnover in the industry. This feat has significant implications. Dell’s core competency is in their direct model that leverages JIT inventory. They pioneered this method and had a first mover advantage for quite some time, yet Apple has been able to surpass their arch rival in terms of inventory turnover. In 1999 and 2000, Apple’s [next page]