Apple Business Strategy Essay

One of the important strategies of Apple is to differentiate its brand from other competitors, by creating their own software and hardware, and building a razor-blade business model. From the early years of the Apple, they have been a company that wants to be unique, simple and one that differentiates itself from the market. “The Mac marked a breakthrough in ease of use, industrial design, and technical elegance”. The business platform for Apple has been to make their own hardware and software, not allow third party to use its software, and to standardize their infrastructure to ensure compatibility. For example, introducing the iPod to digitize music and importantly, having iTunes as a platform, in addition to introducing the iPhone and creating

For example, Android has multiple companies using its platform. Another important factor is Apple locks-in its customers because it provides its own technology platform like iTunes, App Store and iCloud services, which makes it harder for customers to switch to another company. Looking at the cost and benefit curve, you can see that at first developing a software is expensive. “Analysts estimated that OS X cost Apple roughly $1 billion to develop.” Although, in the short run there will be less profit, in the long run your cumulative benefits will pass the cumulative cost, which will allow greater profitability after paying off the cost. As competition grew, Apple had to find new ways to innovate their products and cut costs for more profitability. In order to do that Apple focused on adding Intel chips for faster processing speed and thinner laptops. In addition, it allowed Windows applications to run on Mac, which now offset a long-standing disadvantage to choosing Mac. Apple changed its distribution strategy by making it easy for consumers to directly use and experience Apple’s software by opening its retail stores, which accounted for 12% of Apple’s total

The reason why protecting its intellectual property is important is because Apple thrives on being different from the crowd. A key feature that sets apart Apple from other companies is its ability to differentiate from others. In order for them to keep being different, they have to protect their property. Protecting its product will make Apple have a natural monopoly because they will be different in the market and have their own software. In addition, Apple will sustain its profits in the future because of their app platform, which will keep adding value to Apple and by not allowing its software to third party. Another important lesson learned is they keep improving products, which allows them to keep introducing new iPhone/iPad for customer to create new demand. For example, not introducing all the best feature at once and changing few things while keeping the core concept on the product. At the same time, listening to customer complaints and reviews such as making the iPhone screen bigger. Also its ability to keep exploring new platform like Apple TV, Apple Watch and possibly an Apple car in the future. Apple has learned how to differentiate its product pricing, by using personalized pricing and offering