Companies all over the world employ countless strategies in other to own competitive advantage over their rivals. Each company's tactical approach requires custom-designed actions to match its circumstances and environment where it runs.
It is therefore evident that managers of companies have marginally different ideas concerning how the future market tendency and condition would be. These automatically translate to the fact that the strategies deployed by professionals to mitigate a market challenge change from one organization to the other and in one industry to the other.
How best a business aligns its strategy with these challenges depends upon how corporate and business management understands the market dynamics, and the type of technique to deploy.
In a competitive industry, the best strategy to deploy should be directed towards how to maneuver rivals, and at the same time lure customers to patronize the firm's products and/or services. The strategy must target at creating brand image in the mind of the users of the merchandise, thereby leading to customers to be delighted every time they enter into contact, or even notice of the merchandise.
In other occasions, firm's strategy may be based upon market share. That is whether it has a bigger market share or smaller market talk about, or whether it's the market leader or the market follower. All this factors establishes the formulation of an good business strategy.
According to Michael Porter, a firm's power in growing strategy falls eventually into one of the three headings. These are low cost professional strategy, differentiation strategy and emphasis strategy.
He however, Arthur A. T. Jnr. et al. Crafting and executing strategy, the quest for competive advantage notion and circumstances, ( 2005) expanded the three universal ways of five common strategies and discussed as shown in body 1 below:
For the goal of this discussion I would deliberate on the five common strategies as propounded by Michael Porter, as widened by Arthur A. T. Jnr. et al.
Figure I, below shows the five common strategies.
Called from Arthur A. T Jnr. (2005).
Overall low cost provider strategy
Broad differentiation strategy
Low -Cost Strategy
A low priced provider strategy attractive to a broad spectral range of customers by being the overall low cost provider of something or service.
A wide differentiation strategy seeking to differentiate the company's product/service offering from rivals in a way that will charm to a broad spectrum of purchasers.
A best cost provider strategy giving the clients more value with their money by adding good-to-excellent product attributes better value than rivals.
A target (or market niche) strategy predicated on low cost - focusing on a narrow buyer segment and offering unique product better value than opponents.
A concentration (or market specific niche market) strategy bus on differentiation - concentrating on a thin market portion and offering unique product with custom-made attributes that meet up with the taste and requirement of clients than that of rivals.
Apple, since its inception in the computer industry gained a whole lot of advantages which eventually became its hall mark and which nothing of the players in the industry like Dell and IBM could march up with.
These main competences makes Apple computer systems stand unique even among the list of giants in the industry. This has suffered Apple even through the stressful industry change over the time. Apple has had the opportunity to strategies and is now matching up with the issues on the market. Because of this Apple has chalked a lot of strength and unique main competence.
The center competence which Apple chalked for itself includes:
Creativity: Apple's agile and innovativeness way of expanding computers and software differentiates it from the other players. This has mad Apple stand high among competitors in the industry.
Apple was noticed to be at the fore entry of revolution technology by integrating music, images and animation. This has brought Apple to the forefront of industrial revolution.
Apple has an initial mover benefits by developing the Macintosh operating-system. This has compelled Microsoft to obtain the sign up of the Macintosh operating-system with Microsoft.
Apple had Konoclastic (ground-breaking) design which no other opponents was able to emulate.
Despite these strength and features of Apple, Dell, IBM and Microsoft became a threat to Apple. Dell on finding the weakness of Apple decided to capitalize on it. This Dell did by travelling down costs through its direct selling method of computer users.
The difficulty Apple got was the management quality in terms of the principle Executive Official, when John Sculley was at the herm of affairs. John Sculley had taken bad unilateral decisions which affected the wealth of Apple.
The business practically went on its kneels and then be salvaged by the timely exit of John Sculley, and the re-entry of Steve Jobs as the interim Chief Executive Officer (CEO).
Michael porter's generic strategies are generic strategies which could be deployed by any organization in other to be competitive. Generally, stable exist by crafting differing strategies to outweigh their challengers.
For that subject any firm that decides never to think strategically and deploy ways of outwit competitors will fail. The organization may even become more vulnerable when it manages in a competitive environment like in the case of Apple Personal computers.
Analyzing Michael Porters common strategies with regards to the competitive strategies utilized by Apple.
Low Cost Professional Strategy: Apple on learning the computer market determined specific needs and designed personalized to meet such needs. This they do by designing IMac computer and iBook computer for basic computer customers. The costs of the model of computers is relatively low.
Broad Differentiation Strategy. This strategy has to do with differentiating the business's product/servicing from rivals. Apple differentiated its product by centering and producing on two market section, the consumer and the professional market. Apple designed personal computers for beginners which does not necessary have way too many intricate functions.
Best cost providers. This strategy is crafted to provide customers by adding good-to-excellent product attributes. A typical example is the incorporation of ipod digital music player, iTune websit for the deal and download of music in the computer systems provided users of Apple Computer systems Affordability.
Focus strategy located in differentiation: Apple has differentiated it products concentrating on the professionals and producing personal computers personalized to meet exact needs experts. Computers designed for professionals have sophisticated functions that meet their today's requirements.
Focus strategy based on cost. This strategy is concentrating o thin market segment by giving low cost products to the section. Apple has achieved this through the development of iBook pcs to serve the customer section.
Apples' competitive strategies are in tune with the common strategies of Michael Porter. The strategies deployed by Apple are very good strategies except that they had some managerial problems initially, however Apple must deploy market penetration strategy in other to develop its market show.
(2) Discuss the idea of strategic alliance by fighting companies as a means for strategic development. By forming tactical alliance with IBM and Microsoft, what competitive risk face Apple.
Strategy Alliance is a business relationship established by several companies to cooperate out of mutual need to talk about risk in obtaining a common objective. Strategy alliances are looked for in an effort to support weakness and increase competitive talents companies. Cateora P. R. et. al. (2002).
Companies that establish strategy alliances are exposed to tremendous benefits that when funnel could change the fortunes of these business. When companies are engaged in tactical alliance one partner's strength offset the weakness of the other, in that way positioning the business in the market to compete against other opponents.
The plus side to Strategic Alliance is the, the allying companies may have unique main competences that when brought jointly would obviously introduce a new sizing into the operation of the business.
The numerous advantages and benefits companies accrue form proper alliance includes:
Opportunities for fast enlargement into new market.
Access to new skills and technology.
More efficient creation and marketing costs.
Risks writing when there is a lot uncertainty and instability in a particular market.
Enhance product development.
Access to additional resources of capital.
High productivity and maximization of revenue.
Enhance competitiveness in domestic/global market.
Synergy and competitive edge.
Strategy alliance which really is a synergistic relationship established to achieve a common goal in which both parties benefit can maintain the proper execution of; jv, licensing, or franchising.
Joint Opportunity is a legal entity created between two or more parties to attempt an economic activity along and sharing the chance in development. The parties consent to develop for a finite time, a new entity and new assets by contributing collateral. They both exercise control over the organization and consequently talk about revenue, bills and belongings.
Licensing: This is giving a international company the technology or development right to produce the company's products in the international country. By licensing the technology or the creation rights to overseas based companies, the firm doesn't have to bear the costs and dangers of entering foreign markets on its own, yet with the ability to generate income from royalties.
The only drawback of licensing is the risk of providing valuable technical know-how to overseas companies and in doing so losing some extent of control over its use.
Franchising gets the same advantages as Licensing, but franchising bears the majority of the potential risks and costs of building international locations. Here the franchisor must expend the learning resource to recruit, train, support and screen the franchisees.
Strength of Strategy Alliance
When firms come together to form alliance, they tend to be more powerful than when they are independent. They pull their expertise jointly, develop new technology, and generally in most case new products are developed.
Strategic Alliance mixes two center competences, (in most cases a mixture of more than two unique main competences) to help the business rejuvenate the procedure of the business, thereby bringing about total change, as well as create a very strong competitive edge on the market.
Strategic Alliance again can be used to pursue radical strategy such as a defense strategy. In such a scenario, it could term as a deliberate strategy to deter other potential new entrants from getting into the market.
However, it isn't all alliances that succeed. Most alliances are unsuccessful rather than achieve their goal. Failure of alliance can be attributed to a lot of factors. Some of these factors includes:
Mistrust between allying businesses as business operations progresses.
Incompatibility of allying partners.
Difference in distribution of profits.
Potential cost of anatomy in the individual firm.
Despite the aforementioned challenges in forming Alliances, it is worth mentioning that Alliances are healthy endeavor that companies must holiday resort to when they confronted with severe competition from opponents, or even when the plan to enter the international market with ease.
Forming strategy alliance with IBM and Microsoft means harnessing its primary competences with IBM and Microsoft to attain competitive border in the computer industry. By this, and Apple having a good and enviable center competence but lacks marketing technique, would have the capability to sell its products, and disperse them to attain computers user straight around the globe.
Even though Apple has good and progressive products out to the users, ways to get them out there to the end customer was their problem. As final result Apple struggles to capture a bigger market share even though it has good products.
However, Apple has unique competences that provide it a competitive gain over competitors. These competences such as, creative reconstruction, iconoclastic design which nothing of the rivals was able to emulate, and therefore was viewed as being at he fore front of trend technology.
The prospects of Apple Computer are extremely good, and would only need to rejuvenate its online marketing strategy to be able to penetrate the market and possibly extend its market share.
By allying with IBM and Microsoft, Apple loss all its durability and primary competencies to its lovers. The uniqueness of apple that sometimes appears by its dedicated customers would be eroded.
Apple therefore stands to loose by allying with these industry giants. What Apple must do is to engage in intense market to achieve aggressive growth.
(3) What exactly are the strategic competencies and sources of Apple that when sustained could serve as a competitive advantage over its competitor. Please discuss.
Corporate management of organizations are met with complex, complicated and ongoing challenging macro environmental issues throughout the lifestyle of the business enterprise. These challenges stretch out from cost-effective through fierce competition.
For a business to make it through these environmental problems, it is essential that corporate management ensures the introduction of strategic competence over the facets of the business. They need to therefore device prudent strategies in other to mitigate these challenges.
In the process of controlling this issues, and continuously fixing the problems as time passes generates some competences. This brings about better understanding and competence necessary for improving working methods and enhancing specific and organizational effectiveness.
Strategic competence is the ability to acquire knowledge, experience, information, develop and archive them, and be able as intellectual capital and become able recall and use same for the long term survival of the business.
These processes don't need to be managed by a particular section of the business. They can be achieved because of this of the continuous execution of jobs the company goals and purpose that happen to be being influenced by the company mission and eye-sight.
From piece, tactical management can be define as. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
With reference to the organizational of chart Apple Computer, Apple has able and skilled human tool capacity that always aided in chalking the successes over the time.
The high caliber human resource at the Corporate degree of Apple computer includes, Senior Vice Leader Avadis Tevanian Jnr. Ph. D. (main software Technology official and Bertrand Serlet, Ph. D. - Mature Vice President (software Anatomist).
It imperative to remember that, for a company or organization to get Ph. D. holders at the organization level of a proper business like Apple Computer is not a mean an achievement. What makes it strategically important is their specialization that happen to be in software Technology and Executive.
The other capable commercial staffs are Bertrand Sina Tamaddon - Senior Vice President, Computer Application and Jonathan Rubinstein - Senior Vice President - iPod Division just to pointed out just a few.
The history and credentials of these top management staff of Apple (based on the organization graph) speaks of why Apple has proactive strategies in designs, and had been in a position to design computer products that no firm on the market could emulate. No wonder Apple was determined to be at the forefront of the digital processing age.
Apple may involve some authority in terms of market authority, but flunk of some competences. The shortfall enabled other rivals like Dell and Hawlett- Parkard to overtake it. The problem of Apple computer has been its incapability to drive down costs through direct sales approach, rather than producing the personal computers as and when the marketplace demand.
Unlike Dell which was able to practice the Just-In-Time and at exactly the same time engage in direct sales of computer to computer users, Apple relied entirely on the original retail system to getting the computers to the finish user.
However, Apple with its unique characteristics has a great deal of competitive advantages above the other opponents.
The strategy competences of Apple that managed to get to be observed among the Computer giants include:
Fore leading or revolution technology.
However Apple using its unique characteristics has a whole lot of completive benefits over the other competitors on the industry.
These competitive benefits of Apple even though has barely a market talk about of about 5 per cent, year end up being the most profitable computer company in the industry regardless of the dampened economy and it is small size in accordance with the computer. . . . . . . . . . . .
As a result Apple has gain proper competence that when sustained could provide as a competitive advantage over its rivals.
Apple's development of consumer products like the ipod touch, . . . . . . . . . . . . . , which was very hard to emulate places. Apple at a tactical lever and differentiating it invention from competition.
Whilst competition were thinking about how to combat. . . . . . . That harm their computer systems, Apple has recently looked after the management of various in the Mauntos operating-system.
Apples history of immolations and its motor of thinking differently has allowed it gain key benefit for keeping its customer with same time enticing new ones.
The hall mark of Apple is its from the very start even in this mist of stiff competition. These tactical competence of Apple are so unique and
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