Today, more than ever before, companies must continually develop strategic options to remain ahead of their competitors in the ever shrinking marketplace. Apple is no exception. Of great concern is the fact that Apple plays in the same league with other big boys such as IBM, Microsoft, HP, and Dell.
As such, its short-term and long-term survival in a market that is drifting towards saturation will principally depend on aggressive market research to inform its strategic options (Marcus 19). The year 2010 will mark a motivating stage of transition for Apple if it embarks on exploiting its strategic options to the fullest potential since the negative effects of the current global economic recession are slowing fading away.
Apple’s short-term and long-term strategic options must entail the development and harmonization of all innovative action-oriented responses to the many challenges that the company continues to face, either internally or externally (MDF 1).
A perfect starting point for Apple would be to undertake a comprehensive institutional assessment that keeps in focus the company’s core objectives and aspirations in order to identify and screen all available strategic options. The key drivers of any organization should always inform the direction of its strategic options, and for Apple, innovative technology seems to be at the core of its operations (Marcus 23).
Apple’s peripherals and entertainment market has a lot of potential for growth, especially with the realization that gadgets such as the iPod and the iPhone appeals to the young working class. This affluent market segment is known to spend highly on products that make their lives more interesting and manageable. This, certainly, is a window of opportunity for Apple.
Another strategic option available for Apple is to undertake a comprehensive diversification of its products according to geographical localities.
This, though classified as a long-term strategy, will enable the company to gain a foothold in new and emerging markets. For instance, studies have revealed that demand for technology products such as personal computers and laptops has more than doubled in developing continents such as Africa and Latin America, while markets are shrinking in developed continents (Marcus 46).
Although Apple is not traditionally known to shine in the sales of desktops and laptops, a strategic option to reverse the trend has been presented in the new and emerging markets for technology products.
Apple has over the years built a strong reputation, especially among the young generation, as a dependable digital entertainment portal through its internationally recognized iTunes. This notwithstanding, it has encountered problems with hackers, who want to download the music for free, thereby cutting back the company’s sales revenue.
Apple, however, stands to benefit considerably in the near and long-term future by undertaking to develop a closed community with music artists and music lovers which will not only enable the organization to compete more belligerently with other technology companies offering the same services, but also reduce hacker risks and related losses (Johnson et al 12).
Such a strategic option will inarguably permit Apple to take advantage of the trends, competition, opportunities and risks that exist in the external environment by creating more value, independence, and demand for its products in the marketplace. This will not only enhance the company’s competitive advantage, but also drastically enhance sales revenue.
Due to the increased uptake of internet, Apple has an excellent strategic option in that it can synchronize its products and sell them online rather than depending on traditional distribution channels. Most of Apple’s products such as the iPhone, iPads, and the iTunes are dependent on internet connectivity for them to function properly.
Apple will make a step in the right direction by comprehensively shifting focus to selling online since, not only will the company benefit immensely from a widened and seamless market for its products, but overhead costs related to physical presence will also be greatly reduced (Porter 77). Online marketing is also bound to increase Apple’s operational advantages judging by the nature of some of its products and services such as online storage and music downloads for its iTunes portal.
The above options in conjunction with comprehensive research and development of newer and more appealing technology products will definitely give Apple a competitive advantage in terms of cost advantages and overall product differentiation (Marcus 52).
In a world that consumers have extremely divergent views and perceptions, product differentiation will inarguably assist Apple to enter appealing products in its core market segments as well as experiment with other critical segments in the hope of breaking even in the not so distant future. Apple must, therefore, be driven by the perception that there exists a huge market potential for its products out there, especially for its peripheral and consumer products.
Johnson, G., Lee, S.J., Middleton, M., Ngai, N., & Palmeri, G. Apple Inc. 2008. Retrieved 13 April 2010
Marcus, A. Management Strategy: Achieving Sustained Competitive Advantage. McGraw-Hill/Irwin. 2009
MDF. Strategic Options. 2005. Retrieved 13 April 2010
Porter, M.E. Competitive Advantage: Creating and Sustaining Superior Performance, 2nd Ed. New York: The Free Press. 2006