Apple.Inc

Question 1:

Which of Porter’s four competitive strategies does Apple engage in? Explain.

Scope | Broad | Cost Leadership | Differentiation |

| Narrow | Cost Focus | Differentiation Focus |

| | Cost | Differentiation |

| | Source of Competitive Advantage |

Figure 1.0: Porter’s four competitive strategies

Porter’s four competitive strategies does Apple engage in are cost-leadership strategy, differentiation strategy, cost-focus strategy and focused- differentiation strategy. Explanation is as below.

1. Cost-leadership Strategy

Apple used to identify customers’ specific needs and designed to meet their needs. The cost strategy here can be clearly shown when Apple design iMac computer and iBook computer for the basic computer buyers. Those computers’ price is lower compare to the iMac Pro.

Besides that, Apple use information systems to lower the operational cost in order to lower product prices or gain extra profits. This will directly let the traditional competitors and new market entrants difficult to match the prices.

Moreover, efficient customer response systems provide a company and its suppliers with an integrated view of customers. These systems provide instantaneous information to the company and its suppliers. Every staff member can have access to the information in the system to help reduce costs and prices well below that of the competition. Processes such as supply replenishment are automated between companies and suppliers. When products reach a certain re-order point, the system automatically sends a message to the supplier who can quickly send out new stock. These systems help companies achieve low-cost leadership in their industry.

2. Differentiation Strategy

Apple differentiated its product by focusing and producing on two market segment, the consumer and the professional market. Apple designed computers for beginners which does not necessary have too many complex functions and another design for...