Competitive strategies developed by Apple Inc are deemed to be relied on the requirement to deal with the external environment forces as such forces can affect its shares and revenues (Al-Arafati, 2016). The competitive forces along with the underlying dynamics within the Smartphone industry that might threaten Apple Inc are explained below:
Among the identified vital critical forces, major focus is deemed to be considered on two forces that includes competitive rivalry and bargaining power of buyers as there are observed to have strong impact on Apple Inc. Considering the analysis of five forces, it has been analyzed that the company must develop effective competitive strategies based on competitive rivalry and bargaining power of buyers (Kim & Mauborgne, 2014). Such evaluation supports the company’s current position of regular innovation. Apple Inc is evidenced to effectively deal with these two major forces within the external environment. This can facilitate the company in strengthening its strategic position among competitors that can further attract consumers to Apple products. Competitive rivalry can pose a threat to the company’s performance as certain well established rivals such as Google and Samsung can draw attention of Apple Inc’s consumers (Moutinho & Phillips, 2018). For instance, Google has implemented such strategy through offering products line Nexus Smart phones. Samsung android smart phones were highly accepted by consumers. Therefore, large companies have potential to directly compete with Apple Inc and pose a threat to its business sustainability. Bargaining power of buyers is high as it is easy for the buyers to shift brands that make them powerful in compelling Apple Inc to maintain high consumer satisfaction. For instance, consumers prefer smart phones from Samsung and Redmi as they are attaining identical features at affordable prices (Porter, 1975).
Evaluation of potential new entry or competition based on effective substitutes can be explained through evaluation of Apple Inc’s blue ocean strategy. Blue ocean strategy framework is employed by Apple Inc in order to explain the strategy canvas and four actions framework (Purkayastha & Sharma, 2016). This can further explain value innovation that focuses on the elements of service or product offering on which companies in the industry compete.
From analyzing the four actions framework and strategy canvas of Apple Inc it is gathered that the company generated future growth and profits by not exposing the existing demand but by reconstructing industry boundary. This is for generating new market space and unlocking talent demand (Rawson, Duncan & Jones, 2013). Blue ocean strategy analysis of the company indicated that certain disruptive innovations such as iTunes, iPod, iPhone and iCloud has not just attracted consumer attention but has also made them an essential part of individuals’ lives. Profitability and revenue growth of the company can be attributed to its blue ocean strategy. This is for the reason that brand has regularly redefined industry boundaries, generated uncontested market space and its products always centered on delighting its consumers (Rawson, Duncan & Jones, 2013). Products developed by Apple Inc decreases issues, increases functionalities along with generating need for consumers that makes them use the company’s products over long duration.
The four actions framework for Apple Inc can be explained in case of iPod based on consumer experience. The company focuses on eliminating the issue of difficulty in text messaging through use of keyboard and developing mouse. The company has keyboard configuration screens that have advanced options such as touch screen (Rothaermel, 2016). Apple Inc focused on eliminating its product malfunction that was recognized in the chip that facilitates in managing operation status of its devices. Such design deficiency was easily repaired in its future models of iPhone through replacing its operations chip.
Apple Inc has also focused on reducing the difficulty of its consumers in carrying different products such as MP3, PDA and phone for addressing their different needs. The consumers also face with the difficulty of user interface-make touch screen (Rothaermel, 2014). Considering such issues, Apple Inc has launched iPhone 3G in reducing such concerns that has facilitated the brand in attaining competitive advantages.
iPhone developed by Apple Inc has focused on raising the competitive advantages through advancing its product features of improved navigation and user interface, application games along with wireless internet use strategy (Kim & Mauborgne, 2014). The brand developed Macs that is best personal mobile phones in the world with all in one features with app store and iPhone features. In raining the competitive benefits for its consumers, Apple Inc have combines the features of their different products like iPod photo view and music playback within the iPhone.
To attain competitive advantages, Apple Inc has considered developing devices that facilitates its consumers in downloading music directly along with having simple interface with sleek design (Kim & Mauborgne, 2014). IPhones from Apple Inc has been re-developed that has data storage, internet along with computer dissemination abilities along with features of PDA that is compact and has quick access.
Based on the blue ocean strategy frameworks explained in the above section Apple Inc is deemed to focus on a particular new entry or substitute threats that can impact the sustainable position of the company drastically. It is gathered that the company might deal with threat of new entrants and substitutes on the area of its Smartphone innovation from Microsoft and Sony as they come up with surprisingly better technology and product (Fitzpatrick, Nguyen & Cayan, 2015). For attaining competitive advantages, Apple Inc must focus on “Create” factor of its four actions framework through its continuous focus on research and development. Product innovation aspects poses a threat for Apple Inc as its competitors like Blackberry, Samsung, Google and Microsoft comes with similar smart phones offered by Apple Inc at a low price and with modified features. Even though phone of Apple Inc has a design of utilizing a lot of features in just one gadget, its business rivals are still capable to combine the vital features of phone in adorable prices to increase their sales. For instance, Galaxy Note 7 attained competitive advantages over iPhone 7 because of its OLED sharp display technology and LTE capable smart watch ticker in lower prices posing threat to sales of iPhone.
Strategic implications of the competitive forces identified above will be focused on in explaining the threats and opportunities to the Apple Inc’s position through developing an effective strategy. Apple Inc must focus on employing its strategic ability and efficiency in designing and developing in own hardware and application software in order to attain exceptional and different competitive advantages (Fitzpatrick, Nguyen & Cayan, 2015). Strategies must be developed by Apple Inc in consideration to the identified competitive forces such as bargaining power of buyers and competitive rivalry. To attain a competitive edge of its identified major competitors, Apple Inc must generate new categories of its products through focusing its unique capability of designing Apple products with its ordinal design manufactures that drives innovation. Such unique and non-imitable capability of using its own software to design products and cross-branding through developing Apple Watch or Nike Plus can facilitate the company in attaining competitive edge.
Through dealing with the threat of buyers bargaining power, Apple Inc must focus on recent consumer preferences. To decease switching to different brands all the demands of the consumers must be addressed by Apple Inc gadgets. Certain innovations based on recent consumer demands might include tablet with USB port (Purkayastha & Sharma, 2016). Addressing product based issues through maintaining operating stability, enhancing hardware quality along with increasing availability of applications and software programs are necessary. This can facilitate Apple Inc to maintain its sustainable market reputation. Another strategy for dealing with switching costs is through making its devices compatible with just software developed by them. For instance, Apple software and media can only work on Apple devices. The company can make available a number of purchasing plans for its iPhones.
References
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