Essay on Business Strategies: Achieving Profits Through Diversified Ownership

Paper Type:  Essay
Pages:  7
Wordcount:  1823 Words
Date:  2023-04-08


The main aim of every business organization or corporation is to generate profits that can enable its shareholders to get returns on their investments in the company (Hitt, Ireland, & Hoskisson, 1). Because of the importance attached to profits, most companies prefer to own numerous business units in other industry areas to meet this objective. The route taken to fulfill by such goals can collectively be referred to as a business strategy and is unique to every corporation. According to Hitt, Ireland, & Hoskisson, a business strategy refers to the combination of all decisions and actions that businesses undertake to accomplish institutional goals and ensure they edge out others and secure a competitive advantage or position in the market(1). The strategy is not only the backbone of the company but also the road map to success. Any faults in this strategy can sell the company out to the competitors meaning it can be outcompeted by its peers. Business and corporate levels strategies are the major techniques used by most successful corporations including Apple Inc, which represents one of the most successful corporations in the world. Apple has built its brand over the years and can arguably be considered one of the premium brands in the technology industry. The company designs, develops and sells its electronic products to customers globally. This paper presents an analysis of Apple's business environment showing the business and corporate-level strategies that have made the corporation so successful over the years.

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Business-Level Strategies

The business-level strategy emphasizes how a business can attain clients and satisfy their needs by offering goods and services that can not only meet the customers' needs but also increase the company's profits. A successful business strategy must position a company at an advantage in relation to its competitors (Hitt, Ireland, & Hoskisson, 1). It should also focus on keeping the business organization up to date with the industry market trends and also keep the company abreast with the current technological changes There should be a reason why Apple products are some of the highly sought after products by customers worldwide. One of the most effective business-level strategies used by apple is the price differentiation that is based on innovation and manufacturing the best and efficient products that customers would like to have. Price differentiation is a technique that involves adding unique features to a company's products or services and then charging the prices competitively (Hitt, Ireland, & Hoskisson, 1).

Apple products, including the iPhone or iPad, are not only expensive but efficient to use because of the innovation and technological tweaks that are added to them. The company not only designs and creates new efficient products but also adds particular unique features to its products so that customers can like them more than other alternatives in the market. Not every customer can afford apple products. The company has been able to successfully align their business strategy and competitive marketing technique with product development (Usman, Mohammd & Shabbir, 3). It has done this better than its competitors creating a great competitive advantage for the company. Because this technique has brought a lot of success for apple, it can be considered the best strategy for the long term because apple invests heavily in innovation. Apple's strategy also, is that it focuses its market to customers who are willing to spend more on devices or products that offer excellent user experience. Customers who fancy technological exploration, music enthusiasts as well as those who operate in the media and design industry prefer to use Apple products because of their excellent performances, speed, and efficiency (Hitt, Ireland, & Hoskisson, 1). The company has found out what its customer targets need and have invested heavily in creating products that satisfy their needs(Usman, Mohammd & Shabbir, 3). For instance, Apple products not only fanciful but also come with simple designs that are user-friendly and offer much more. People want products that can take quality pictures, edit, and create music with innovation as the basis of every program. Apple has talented designers and programmers who are able to do just this. The company constantly improves its existing products by adding new features which make existing customers not to consider other alternatives in the market. This technique means Apple will always stay ahead of its peers when they use this strategy.

Corporate-Level Strategies

Corporate level strategy examines the success of a company from a higher level. This strategy emphasizes on getting a combination of business units that will enable the corporation to succeed as a whole (Hitt, Ireland, & Hoskisson, 1). This style of operation is different from the business-level style in that it considers the company's success as a whole by using a mix of all business units. Improving efficiency is one of Apple's core objectives that, in turn, translate to customer preference that leads to more products being bought. This aspect makes it easy for the company to make not only its share of profits but also maintain its status above the rest.

Apple Inc uses numerous corporate strategies, including diversification and internationalization of its products (Usman, Mohammd & Shabbir, 3). In consideration, here is the internationalization of the company's products to other markets, which has resulted in the brand being known, preferred, and bought by clients worldwide (Hitt, Ireland, & Hoskisson, 1). Currently, most apple stores have been established in the United States, the UK, Brazil, France, Singapore, Germany, Australia, the Americas and China among others. The company has stretched its production lines to all other European countries. While the internalization strategy is complicated because of the variations in countries' economies of scale, it has become helpful for the company to push the dominance of its products, and also have customers believe in their reliability. Important to note is the fact that Apple has greatly invested in China because of its developed economy and high population with a huge base of clientele(Usman, Mohammd & Shabbir, 3). Another strategic aspect behind basing Apple's production base in China is the fact that the country has low labor costs, has a potential market, a high rate of access to raw materials, and has a favorable economic environment because of the country's stable economy. Going global can be considered one of the great decisions Apple made because it has made for the long term benefit because it has enabled the corporation to produce standardized products targeting the global market because the manufacturing and engineering are centralized and closely controlled. With this manner of operation, Apple has outwitted the vast majority of its competitors in the industry(Usman, Mohammd & Shabbir, 3). It is easy to identify the company's products since the only thing customized is the power source, which is so due to the variations in voltage preferences in the countries in which Apple operates. This corporate strategy therefore, is a good choice for Apple because customer satisfaction and trust are built with reliable customer service and availability of stores from which their products can be serviced. Internationalization makes this possible so that customers hardly ever seek for alternatives.

Competitive Environment

Apple faces stiff and constant competition from rivals within the same industry of operation. According to Hitt, Ireland, & Hoskisson, the competitive environment is good for the market because it not only pushes corporations to innovate but also ensures that customers get to enjoy quality products with new features (1). One notable competitor of Apple is Samsung, a giant multinational that shares the industry with Apple Inc. (Park et al., 2). Notably, as Apple continues to release new versions of the iPhone or iPad, Samsung has also continued to release their equivalents of the Samsung Galaxy smartphone and the Samsung tab. Both Samsung and Apple occupy spaces in the top ten highly valued corporations globally. According to Park et al., the Samsung Galaxy has taken a considerable market share that the iPhone enjoys but affordable prices (1). Their competition exists in almost all fronts, but their strategies vary, and this underlines the reason why one of the two companies is more successful than the other (Usman, Mohammd & Shabbir, 3). However, as they wrestle out each other, the future could be different depending on which company will innovate than the other or be more strategic than its counterpart.

In addition to cost leadership, Samsung has also applied product differentiation as a form of business-level strategy. Samsung's pricing strategy has given it a cutting edge in competition with Apple and other brands within the same industry. Its products are more pocket-friendly as compared to Apple products (Park et al., 2). The company's corporate-level strategy resembles that of apple as it also lays emphasis on product design and performance. But because the shipments of Samsung products have increased considerably since they combine cost leadership and product differentiation, Samsung's strategy is winning. It can, therefore, be considered as a better strategy for the long term. The competition between these two corporations will surely last, and it remains to be seen which one will come out on top and with which strategy.

Market Cycles

A market cycle refers to the long term price fluctuations or patterns in the stock markets. This term is used by technical analysts who analyze the price trends in the market and observe their patterns up or down in repetitive cycles. The reason why prices fluctuate is because large institutional investors want to trade successfully and make maximum returns. A slow market cycle means that a corporation's competitive advantage is protected from imitation by competitors for long periods of time. However, if the peers imitate, it is still very costly, meaning competitive advantages can only be sustainable in slow market cycles. On the other hand, a fast-cycle market refers to markets whereby a company's competitive advantages are not protected from imitation, and if imitation happens, it occurs quickly and less costly meaning, in such markets, competitive advantages are not sustainable (Hitt, Ireland, & Hoskisson, 1).

The competitive environments of both Apple and Samsung have become a fast-paced market where the price patterns of electronic products constantly fluctuate after each corporation has made some improvements. The manner in which tech companies copy certain aspects of mobile programs has become rampant. However, in as much as Samsung combines cost leadership and product differentiation to keep up its competitive advantage, this strategy can be imitated because the industry has become fast-paced and unsustainable unless they come up with something that cannot be copied, and if it can, it should cost them (Usman, Mohammd & Shabbir, 3). This is the point at which Apple beats Samsung because, in as much as Apple uses innovation and product performance as business-level strategies in their environments, the internetwork operation system (iOS) cannot be copied by competitors, and even if they do, it can be greatly costly. For this reason, even though the mobile electronics industry has become fast-paced and imitation is rampant, Apple will still come up on top of Samsung because of the iOS. Other features might be imitated but their product quality dimension can on...

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