Strategic Direction of Apple Essay

Pages: 7 (2355 words)  ·  Bibliography Sources: 6  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business


Michael Porter provides the foundation for analyzing how Apple is successfully reacting to the many turbulent areas of their business model. As can be seen from the analysis, Apple is primarily focused on making the price competition in adjacent markets work to their advantage by concentrating on time-to-market and quality management advantages from suppliers (Apple Investor Relations, 2012). Apple also realizes that the average smartphone early adopter customer will swap out their smartphone every 18 months or less, which opens up a significant revenue opportunity in upsells of new models (Apple Investor Relations, 2012). Apple is concentrating on their software development to drive high-margin, highly profitable products, averting price wars with low-end competitors. This strategy is central to their attaining a $623B market cap as of this month.

Figure 3: Apple Five Forces Analysis

Sources: (Apple Investor Relations, 2012) (Chang, Weng, 2012) (Hamlin, 1994) (Hubbard, 1992) (Murray, Goode, Muro, 2010) (Porter, 2008)

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TOPIC: Essay on Strategic Direction of Apple in Assignment

At the center of Apple product design and product lifecycle management strategies are a series of priorities that define current and future products. Apple seeks to capitalize on the highest-performance suppliers they have, as this drastically reduces the costs of verifying the quality level of new ones and also speed up time-to-delivery of custom components for prototypes (Apple Investor Relations, 2012). Supplier management and supply chain coordination is critical to the overall profitability of the company, as it has long focused on how to be demand-driven based on customer forecasts (Hubbard, 1992). Apple also concentrates on product strategies that are easily integrated into their existing ecosystems including iTunes. From the initial iPod, iPhone and iTouch, the iTunes ecosystem was specifically designed in to each of these products. As the iPad has grown in prominence, Apple has also created entire sections on the iTunes store just for applications for this device. As Apple generates 30% of all profits from the iTunes ecosystem, the product designs must take this system into account and create a user experience that promotes sales of digital content (Apple Investor Relations, 2012).

Figure 4: Apple Product and Services Ecosystem

Sources: (Apple Investor Relations, 2012) (Hsiao, Tsai, Shen, Yeh, 2011) (Larson, 1994) (Murray, Goode, Muro, 2010)

Assessing Apple's Strategic Direction

For Apple, the ecosystem they create around their products and solutions is more important than the actual product itself, as the company has shown a strong ability to create value from digital content. The future of Apple from a strategic direction standpoint needs to concentrate on creating alliances and partnerships across the spectrum of enterprise-class systems, solutions and system integrators. Figure 5, Mobility Partner Ecosystem, shows the specific map of partners and solution that Apple must take into account when planning their next generation products. The one area Apple continues to struggle in gaining traction within is the enterprise, or Fortune 1,000 market where only 18% of global revenues are generated (Apple Investor Relations, 2012). Apple needs to be thinking more strategically about ecosystems to sell into this much larger and highly profitable market.

Figure 5: Mobility Partner Ecosystem

Sources: (Apple Investor Relations, 2012 (Hsiao, Tsai, Shen, Yeh, 2011)

(Murray, Goode, Muro, 2010)

Strategic Options and Recommendations

Apple's core strengths in the integration of their supply chains, exceptional skills in translating exiting, innovative concepts into products, and the ability to manage suppliers to quality levels many of their competitors can't set a foundation fro exceptional growth going forward. What Apple must do however is think more strategically about the enterprise; they need to create ecosystems that are comparable in effectiveness and scale to iTunes and with the same level of acceptance and adoption. Apple needs to also consider hwo to transform its iPhone and iPad strategies to be more enterprise-driven from a security and operating system stability perspective as well (Apple Investor Relations, 2012).

In conjunction with these opportunities, Apple needs to think how best to penetrate the Asian market with entirely new products that capitalize on the inherent demands of consumers in these countries. As the typical Chinese worker in central China will spend nearly 30% of their take-home pay on an Internet access charge per month (Apple Investor Relations, 2012) Apple needs to consider how best to capitalize on these emerging trends in developing economies. Apple's focus on brand recognition and managed is among the best in the world, and it must be supplanted with unique, customer-experienced driven products to continually excel. Their potential is greatest however in the enterprise market, where additions to the iOS operating system can open up significantly greater opportunities than they have today.


Apple, Investor Relations (2012). Investor Relations. Retrieved August 23, 2012 from Apple Investor Relations and Filings with the SEC Web site:

Chang, W., & Weng, S. (2012). Revisiting customer value by forecasting E-service usage. The Journal of Computer Information Systems, 52(3), 41-49.

Fleischer, V. (2006). Brand new deal: The branding effect of corporate deal structures. Michigan Law Review, 104(7), 1581-1637.

Hamlin, C. (1994). Team building a global team at apple computer. Employment Relations Today, 21(1), 55-55.

Hsiao, C., Tsai, C., Shen, C., & Yeh, G. (2011). The effect of brand… [END OF PREVIEW] . . . READ MORE

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APA Style

Strategic Direction of Apple.  (2012, August 24).  Retrieved September 23, 2021, from

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Chicago Style

"Strategic Direction of Apple."  August 24, 2012.  Accessed September 23, 2021.