Business-Level and Corporate-Level Strategies
All corporations need business- and corporate-level strategies to succeed and ensure maximum above-average returns. Apple Inc. was founded in 1976 by college dropouts Steve Jobs and Steve Wozniak, and a company started in a garage is now a multimillion-dollar company (Terrell, 1). In this paper, Apple’s business-level strategies will be analyzed. Which business-level process is most important to Apple’s success? The corporate-level methods of Apple will be determined, as well as one way that will contribute to Apple’s long-term success. Apple has many competitors, but Apple’s most significant competitor will be discussed. Apple’s strategies will be compared with the most crucial competitor at each level, market commonality, resource similarity, competitive behavior, and competitive dynamics/actions/responses. After the comparison, an evaluation will determine which company will most likely succeed in the long run. Lastly, the paper will explain two markets, the slow and fast cycles.
Business-level strategies help firms establish actions to provide customer value and gain a competitive advantage by utilizing specific core competencies (2). Core competencies are developed to meet the needs of customers (2). There are five types of business-level strategies: cost leadership, differentiation, focused cost leadership, focused differentiation, and integrated cost leadership/differentiation (Hitt, 3, p. 108). Cost leadership is when a corporation competes with competitors based on the lowest cost (Hitt, 3, p. 110). Customers never want to pay a fortune out of pocket for a product or a service that customers can get for a lower price at a different store or brand. Apple products are expensive; the older models of phones are expected to decrease in price once a newer model comes out, but even the price for the older phones is still out of customers’ budgets. The second strategy is the differentiation strategy which is when a firm provides products or services to customers that are different than other firms rather than going by the lowest price (Hitt, 3, p. 115). When firms want to ensure products are different from any other brand, the firm should focus on high-quality products, features, high customer service, fast product innovation, and how the product looks (2). Focused cost leadership competes in price and small market segments to provide goods and services (2). Examples of small pieces that a focus strategy can target include the following: a particular buyer group, different parts of a product line, and other geographic markets (Hitt, 3, p. 118). A focused differentiation strategy competes based on being different and small segments of a need to provide goods (2). Lastly, the integrated low-cost/differentiation strategy earns above-average returns (Hitt, 3, p. 120).
In Apple’s case, the differentiation strategy is the most important to the long-term success of Apple, which is a great choice. Apple products are different than competitors, which means Apple stands out. The differentiation strategy is an excellent choice for Apple because other phones, tablets, smartwatches, and computers are almost alike. For example, Dell and HP computers are alike. MacBooks can’t be compared to other computers because it carries different features. MacBook and a Dell computer have additional software installed, and on a Mac computer, customers can chat with other friends or family member who has Apple products via iMessaging. Apple’s product design has been the hallmark of its differentiation strategy since its origin (Hanks, 4). When Apple introduced its products, there were no similar consumer electronic devices (Hanks, 4). Apple’s core competencies are innovation, marketing, high-quality customer service, and solid financial performance (White, 5).
Innovation by Apple is done to give customers what they want. Marketing always helps to push the brand. Apple has commercials that contribute to the high profit they receive. Customer service is the key to ensuring customers come back. Apple provides exceptional customer service to their customers, whether in-store, online, or on the phone. Apple’s strong financial performance allows Apple to invest in research and development to provide better products to customers. Apple can compete in individual product markets because its effects are different from the rest. They also compete by targeting a specific age group ranging from 22 to 55, male or female (6).
A corporate-level strategy is a set of actions a firm will take to gain a competitive advantage by choosing and managing a group of different businesses competing in other product markets (Hitt, 3, p. 164). Corporate-level strategies include product differentiation, single-business diversification strategy, dominant-business diversification strategy, related constrained diversification strategy, link diversification strategy, and unrelated diversification strategy (Hitt,3, p. 165-168). The most critical corporate-level process for Apple is product differentiation. Apple products have almost the same design techniques, which can be used on different devices without changing the format (7). There are not many computer-based companies that have retail stores throughout the world. Apple is one of the few companies with stores outside the United States. As mentioned, Apple offers high-quality customer service to both potential and current customers. If an issue is wrong with a customer’s phone Apple will replace the phone within the one-year purchase (7). Apple’s current corporate strategy works. As many can see, the company has faced backlash, but they are still standing, and people are again buying their products. Apple changes multiple products through the internal process, classical corporate innovation, and merchandise innovation (8). For example, the iPod was one of the first Apple products. The inner creation process of the iPod ensured the consiPod inner creation process fit customers’ needs. Apple’s company, internal innovation for the iPod was to include iTunes and an App Store which made Apple’s iPod one of the first electronic devices to download music (8). Apple’s preciseness on innovation and simple but powerful design have all contributed to Apple’s brand and reputation, not only among people but also among companies (7).
Apple has many different competitors in different products Apple offers. Apple’s biggest competitor is Samsung, as they are the two most prominent brands in electronics. Samsung has more products to offer than Apple because Samsung has products such as TVs, surround sound systems, printers, and wearables that Apple does not have. Market commonality means the number of markets the firms and competitors are involved in and how important each firm is to the market (Hitt, 3, p. 138). Again, both Apple and Samsung are the leading brands in the technology markets. Resource similarity is when a firm’s tangible and intangible resources are comparable to their competitor (Hitt, 3, p. 138). The completion of Apple and Samsung is using research and development to improve products to satisfy customer needs. They both have unmatched intangible resources regarding their design in merchandise, and the technological factors are similar. Competitive behavior involves awareness, motivation, and ability (Hitt, 3, 1.139-140). Apple and Samsung know they compete with each other, so they both race to bring out the best products.
Apple’s actions and strategies reflect a similar approach to gaining a wide range of customers. As for Samsung, they are the number one largest patent holder in the United States as of 2018 (Manners, 9). New product capabilities have been decided as one of the strong bases of Samsung’s competitive advantage (Dudovskiy, 10). A competitive response is a firm’s strategic action to counter the effects of a competitor’s competitive action (Hitt, 3, p. 141). Apple’s brand is dominant, so when a customer buys one Apple product, the customer is almost convinced to buy another. All Apple products share the same software and applications, making them easy to use. Samsung products have a long life span, including many different product types (White, 11). Samsung became the leading technology company because of its applied marketing strategy (White, 11). Samsung has shined in the innovation department because they genuinely create customer needs (White, 11).
Both companies are intended to be successful in the long run, but for some reason, Samsung can’t seem to knock Apple off the grid. That said, Apple would be the company to succeed long term. Apple constantly improves internal sales and marketing capabilities because they have a straightforward management structure (Hirsch, 12). At the same time, Samsung depends on a sister company called Samsung SDS for many internal sales and marketing capabilities which causes many complications, resulting in falling behind Apple (Hirsch, 12).
There will always be competition in every market if there is more than one brand. There are two market cycles, slow and fast market cycles. Slow-market cycles are when a firm’s competitive advantage is protected from imitation for an extended period (Hitt, 3, 1.148). Fast-market cycles are the opposite because a firm’s fast-market cycles are when firms’ capabilities contribute to competitive advantages that are not protected from imitation (Hitt, 3, p. 149). Apple and Samsung should be protected from having their products copied by a different company. The choice of Apple would change in a slow-market cycle because the market would not look for anything new to come out, and customers would not need to buy Apple’s more unique products. Customers may stay with their current product or keep it because they are comfortable. In the fast-market cycle, the choice Apple would not change. As mentioned, Apple is very innovative in the electronics they offer. Apple and Samsung are direct competitors because they create products for the current day and age. To remain competitive in the fast market, it’s all about innovation. Both companies associate themselves with the fast-market cycle.
To conclude, Apple has specific strategies they keep up with to ensure the corporation is successful in the long run. In this paper, the business-level strategies were discussed, and one strategy Apple used that is the most significant is the differentiation strategy. Apple’s corporate-level strategy is product differentiation which includes innovation because to make products different; they must go through the innovation process. Apple’s biggest competitor is Samsung. Apple and Samsung are both the faces of technology. Although Samsung tries to beat Apple, they are unable to do so despite the number of products Samsung carries. Also included is a comparison of Apple versus Samsung’s strategies at each level, market commonality, resource similarity, competitive behavior, and competitive dynamics/actions/responses. The market cycles discussed were slow and fast, and how Apple differs in the two processes. Apple is a successful company that will continue to become successful if they follow its strategies. The founder who was Steve Jobs passed away, but that did not stop Apple from inventing new products; it was the next man.
That shows how powerful the company is and how smart they are when selecting employees to work for the company.
Ellen Terrell. 2008. Apple Computer, Inc. http://www.loc.gov/rr/business/businesshistory/April/apple.html
No Author, No Date. Business-Level Strategy https://www.albany.edu/faculty/es8949/bmgt481/lecture4.html
Michael Hitt. 2011. Strategic Management and Strategic Competitiveness. p. 108, 110, 115, 118, 120, 138-141, 165-168.
Gerald Hanks. 2018. Apple Differentiation Strategy. https://bizfluent.com/way-5815745-apple-differentiation-strategy.html
Walter White. No Date. Distinctive Competencies: Examples & Pros and Cons. http://inevitablesteps.com/business/distinctive-competencies/
No Author, 2018. Positioning of Apple | Apple Segmentation, Targeting, and Positioning. http://heartofcodes.com/positioning-of-apple/
No Author. No Date. Final Project on Apple. https://stonybrook.digication.com/final_project_on_apple/Corporate_Level_Strategy
No Author. 2018. APPLE’S CORPORATE-LEVEL STRATEGY. https://essaymondo.com/blog/71C/apples-corporate-level-strategy
David Manners. 2018. Samsung No.1 US patent holder. https://www.electronicsweekly.com/news/business/samsung-no-1-us-patent-holder-2018-04/
John Dudovskiy. 2017. Samsung Business Strategy and Competitive Advantage. https://research-methodology.net/samsung-business-strategy-competitive-advantage-effective-exploitation-market-readership/
Walter No Date. Samsung Marketing Strategy: The Master Brand. http://inevitablesteps.com/marketing/samsung-marketing-strategy/
Guy Hirsch. 2018. Why Samsung doesn’t beat Apple where it matters. https://techcrunch.com/2017/10/24/why-samsung-doesnt-beat-apple-where-it-matters/
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Week 8 Assignment – Business-Level and Corporate-Level Strategies
In this assignment, you will use the corporation you selected for Weeks 3 and 6 positions. You will examine business and corporate-level strategies and their impact on corporate success comparable to the competitive environment. This assignment requires using three or more quality resources, including your textbook. Use any or all of the following resources to research the chosen corporation:
- The corporation’s website.
- Public filings from the Securities and Exchange Commission’s Filings & Forms page.
- Strayer University’s online databases.
- The Nexis Uni database.
- Other credible sources, such as the corporation’s annual report, often provide insights that additional resources may not include.
- You are expected to use your textbook as a resource for this assignment.
- Read the Assignment Formatting and Tips [PDF] before starting the assignment. Refer back to this document as needed.
- Review the course guide’s scoring guide (rubric) before starting the assignment.
- Download and save the Business-Level and Corporate-Level Strategies Template [DOCX].
- Use the template to write a 4-6 page academic research paper in which you include the following:
Step 1: Assess one business-level strategy you believe is most appropriate for the corporation’s long-term success. Support your position with specific evidence. Step 2: Assess one corporate-level system you think most suits the corporation’s long-term success. Support your work with clear evidence. Step 3: Analyze the competitive environment to determine the corporation’s most significant competitor. Include a comparison of the business and corporate-level strategies for both corporations (your selected corporation and the competitor.)
- Based on your analysis, conclude which corporation (your selected corporation or its competitor) will most likely succeed in the long term. Support your determination with at least three pieces of evidence.
Step 4: Determine whether your corporation or its most significant competitor would differ in slow-cycle and fast-cycle markets. Support your position with specific evidence.
- Use three or more quality sources, including your textbook, to support your writing. Choose seeds that are credible, relevant, and appropriate. Cite each citation listed on your source page once within your assignment. (Note: Wikipedia and similar websites do not qualify as academic
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