Tuesday, August 7, 2018

Apple's Successful Strategies

Apple’s titanic success is a good case-study for Business students. 

In my learned opinion, Apple have built a sustainable competitive advantage by focusing on three key business strategies as elaborated below: 

Apple focus on providing the best user experience and own it completely. 

Apple design and develop own operating systems, hardware, application software, and services. Then, they integrate them seamlessly to build easy-to-use products. In other words, they subscribe to a vertical integration model. 

Know that it’s not just focusing on the hardware or software – it’s about building an ecosystem. What Apple have is a rich cross-platform experience that allows Apple users to keep their myriad devices in sync and up-to-date. 

Besides, the added benefit of charging premium. 

Moreover, Apple are not dependent on anybody for technical breakthroughs. Apple innovate at their own pace. 

Image credit: RNP Research Pvt. Ltd., India 

Apple focus on creating platforms for content and apps distribution on Apple devices. 

Consumers access them and pay to the content owners and application developers for the paid content and apps. Apple take a fee from both parties because they own and maintain the said platforms that connect consumers with them. 

There is a multiplier effect. As Apple customer base grows and more consumers access the platforms with their devices, the platform becomes more attractive to the application developers and the content owners. Similarly, a centralized access to the content and the certified apps attract more consumers towards the platform. 

The devices and platforms help Apple lock-in the consumer into the ecosystem. First, Apple achieve hardware lock-in with the devices. Then, the software lock-in with operating system software, application software, and third-party software and apps. Then, iCloud helps Apple achieve the data lock-in. 

Is it any wonder Apple are so successful? 

Image credit: RNP Research Pvt. Ltd., India

Apple focus on expanding their network of company-owned retail stores – and this ensures a high-quality buying experience for their products. 

Their stores are designed to simplify and enhance the presentation and marketing of the Apple products. 

Image credit: RNP Research Pvt. Ltd., India 

I also happen to believe Apple are an unusual company. More entrepreneurial than corporate. 

In fact, Ben Bajarin who wrote “Why Competing with Apple Is So Difficult” for Time magazine shared the same opinion  that very few companies, if any at all, are well equipped as businesses to compete head on with Apple as very few have the same kind of entrepreneurial culture as Apple (July 01, 2011). 

As far as I’m concerned, there’s no magic formula really – it’s simply good marketing!

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