7/13/2017 Apples Generic Strategy & Intensive Growth Strategies - Panmore Institute

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BUSINESS, MANAGEMENT

Apples Generic Strategy & Intensive

Growth Strategies
UPDATEDJAN 29, 2017 | PAULINE MEYER

Apples generic strategy and intensive

growth strategies directly relate to the
companys strategies in pricing,
marketing, and other areas of the
business. As one of the most valuable
companies in the world, Apple shows that
its generic strategy is a major
determinant of advantage against other
rms like LG, Samsung, and BlackBerry.
An Apple Watch. Apples generic strategy (Porters model) and
intensive growth strategies are aligned to support the Also, Apples intensive strategies for
growth support the rms ability to
companys leadership in various markets worldwide. (Photo:
Public Domain)
maintain its strong position in the global
market. With a high rate of innovation
and emphasis on excellence in product design, Apple succeeds even with its relatively
high selling prices. This successful position indicates Apples effectiveness in using its
generic strategy and intensive growth strategies.

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Apples generic strategy, based on Porters model, aligns with the companys intensive growth
strategies. In particular, the intensive growth strategy of product development is key to ful lling
this generic strategy and supporting Apples success.

Apples Generic Strategy (Porters Model) & Objectives

Apples generic strategy is broad differentiation. This generic strategy focuses on key
features that differentiate the company and its products from competitors. Through the
broad differentiation generic strategy, Apple stands out in the market. For example,
emphasis on elegant design combined user-friendliness and high-end branding
effectively differentiate the company. The broad differentiation generic strategy means
that Apple always aims to set itself apart from competitors not by price but by other key
features bene cial to customers. These key features include seamless connectivity
among devices and cutting-edge aesthetics in design. Even though this generic strategy
makes Apple stand out, the company still broadly reaches various segments of the
market. The rms products are designed for everyone, thereby supporting a broad
market reach. For example, Apple reaches to individuals and business organizations
through the MacBook product line. In this way, the generic strategy of broad
differentiation supports the company in maintaining its leadership and position as a
high-end and high-value business.

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7/13/2017 Apples Generic Strategy & Intensive Growth Strategies - Panmore Institute

The broad differentiation generic strategy has signi cant implications on Apples
strategic objectives. For example, to effectively apply this generic strategy, the company
must continue emphasizing innovation through research and development. Apple must
continually develop innovative products so that the rm always stands out against
competitors. Competitors eventually catch up with new products, so the broad
differentiation generic strategy compels Apple to always innovate to keep itself always
ahead of competitors. Thus, continuous innovation is one of Apples strategic objectives
based on the broad differentiation generic strategy. In addition, the company must
ensure that it keeps expanding its market reach. In this generic strategy, Apple does not
focus on any speci c market segment. The rm competes in all market segments with
other players in the industry. Thus, Apples other strategic objective based on this
generic strategy is to expand to ensure broad market reach. Such expansion and
business growth are achieved through intensive strategies for growth.

Apples Intensive Strategies (Intensive Growth

Strategies)
Product Development. Apple uses product development as its main intensive strategy
for growth. Product development requires that the company must offer attractive
products to grow its market share and performance. Apple implements this intensive
growth strategy through innovation in its research and development processes. The
companys mission statement and vision statement specify product development.
Through this intensive growth strategy, Apple views innovation as a critical success
factor. For example, the company continues to innovate through products like iPhone,
iPad, and Apple Watch. In this intensive growth strategy, the rm also develops new
products for the mobile market. Apple grows because new products and models allow
the rm to generate more revenues. This intensive growth strategy agrees with the
companys generic strategy by focusing on unique Apple products that can increase
pro ts.
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Market Penetration. Apple uses market penetration as its second most signi cant
intensive strategy for growth. Market penetration involves gaining a larger market share
by selling more of the companys current products. For example, Apple applies this
intensive strategy by selling more iPhones and iPads to its current target markets. In
particular, the rm achieves more sales by adding more authorized sellers in its current
markets. This approach is important in penetrating markets where Apple has not yet
achieved a signi cant position. Also, under the market penetration intensive growth
strategy, Apple uses promotion through various websites and media outlets. For
example, advertisements encourage more people to buy Apple products. This intensive
growth strategy agrees with Apples broad differentiation generic strategy because it
addresses the need to broadly capture the market. By selling more current products to
more customers in current markets, this intensive strategy enables Apple to reach
customers in all market segments.

Market Development. Apple uses market development as the least signi cant of its
intensive strategies for growth. Market development involves creating new markets for
new products or entering entirely new markets. This intensive growth strategy is similar
to market penetration, but market development focuses on establishing presence in new
markets. Apple applies this intensive growth strategy by authorizing new sellers in
markets where the company does not have any presence yet. Thus, this intensive
strategy applies mainly in developing markets. Also, Apple implements the market
development intensive growth strategy through novel products. For example, the
company innovates to offer goods like Apple Watch, which is an entirely new product
line for the rm. Through Apple Watch, the company develops its reach in the
smartwatch market. This intensive growth strategy agrees with Apples generic strategy
of broad differentiation by expanding the companys market reach. Such generic
strategy requires that unique products should be offered to different market segments,
which the company reaches through market development.

Strategic Analysis and Recommendation for Apple

Apples generic strategy of broad differentiation helps the company stand out.
Differentiation in function and design supports the rms goal of leading the market
through innovative products. Innovation is at the heart of Apples business. However, to
improve its application of this generic strategy, the company must aggressively
penetrate markets, especially developing countries where Apples market reach is still
limited.

Apples main intensive growth strategy is product development. Market penetration and
market development are second and third in priority, respectively. These intensive

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growth strategies agree with and support Apples generic strategy. The rm is strong in
product development through innovation. However, to improve performance, the
company should emphasize more on market penetration and market development.
Emphasis on these two intensive growth strategies can improve Apples resilience
against aggressive competitors like Samsung.

References

Akan, O., Allen, R. S., Helms, M. M., & Spralls III, S. A. (2006). Critical tactics for
implementing Porters generic strategies.Journal of Business Strategy,27(1), 43-53.
Allen, R. S., & Helms, M. M. (2006). Linking strategic practices and organizational
performance to Porters generic strategies.Business Process Management
Journal,12(4), 433-454.
Apple Inc. Form 10-K, 2014.
Apple Info.
Bajarin, T. (2014, July 14). Understanding Apples Continuity Strategy. Time.
Kosner, A. W. (2015, February 16). Can Apples Expanded Strategy Push It To $1
Trillion Market Cap? Forbes.
Parnell, J. A. (2006). Generic strategies after two decades: a reconceptualization of
competitive strategy.Management decision,44(8), 1139-1154.
Pretorius, M. (2008). When Porters generic strategies are not enough:
complementary strategies for turnaround situations.Journal of Business
Strategy,29(6), 19-28.
Tre s Team (2015, June 12). How Apple Is Bolstering Its Advertising Strategy With
iOS 9. Forbes.

TAGS:
APPLE INC.,GENERIC STRATEGY (PORTER'S MODEL) & INTENSIVE GROWTH STRATEGIES,STRATEGY

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