How Apple Uses Differentiation Strategy to Gain Competitiveness

Apple is an American corporation that designs, manufactures and sells electronics, computer hardware and software, and personal computers. The company is well known for its innovative products such as Macintosh line computers, the iPod. iPhone and iPad hardware products (Christopher, 2010).  It is also concerned with innovative software such as Mac operating system, X operating systems, the iTunes media browser, IOS mobile operating system and many more other software. The company was started in 1976 by Ronald Wayne, Steve jobs and Steve Wozniak. Its first products differed from those provided by the competitors the TRS-80 and Commodore PET since they come with character cell based graphics and open architecture unlike the rivals’ products which used ordinary cassette tapes as storage devises. I have chosen this company to describe differentiation generic strategy because Apple Company began using this strategy from the beginning hence gaining competitive advantage in computers industry to date (Christopher, 2010).

According to Porter (1980), differentiating a business requires that, new and unique products with value are created for which customers will pay premium prices for. Apple Company has utilized this strategy since it was founded and has retained its competitive advantage in the computer and consumer electronics industry. Apple designs are user centric and bridges the gaps that that are unseen or unaddressed by the competitors. The Mac interface bridges the user interface gap in MS-Dos, iTunes made it easier to load music into mp3 hardware and lastly the iPhone used the connective power of Smartphone to bring about the gathering of new mobile applications (Alex, 2002).

The company limits the innovation of new product generations and focus on few sparkling innovations while re-using the already existing product design. This has helped the company to focus on few highly differentiated innovations that result in brilliant marketing wonders while controlling the resources, costs and maintaining stability. Apple’s Macintosh computers differ completely from the competing windows computers. Windows computers are made by different manufacturers making it hard for Microsoft to control the minimum baseline of the hardware. On the other hand, Apple controls the variety of both the hardware and software, this minimizes the end user technical issues because there is guarantee there is a common Macintosh hardware platform that create user experience. Apple enjoys the branding strategy whereby it is the only one responsible for the manufacture of Macintosh products. This monopoly ensures them to make quality products that compete differently with the competitor windows hardware and which are manufactured by many manufactures. Unique branding allows them to charge premium prices (Alex, 2002).

Profitability measures of apple with its competitors in 2009.

Bar chart showing the competitiveness of apple in the computer market

Conclusion

In summary, apple products are designed and produced to give the customer the value and quality. They are unique and serve specific customer needs that are not met by other companies in the industry. highly differentiated and unique hardware and software integration gadgets enables apple to charge premium prices for its products hence making higher profits and maintains its competitive position in the market (Alex, 2002)

 

References

  1. Alex, S (2002). Finally, a Chance for Apple to Flourish”, Business Week Online, 6(4), 57-60.
  2. Christopher, M (2010). Strategy, Differentiation & Alignment: 5 Examples from Apple. Fast Cycle Time, Relentless Growth. Harvard Business Review,2(3), 34-45.
  3. Porter, M.E (1980). Competitive strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press.

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