¶ … Strategy
Michael Porter described four types of generic strategies, a matrix with cost leadership and differentiation on one axis, and broad market/niche along the other. The underlying logic is that companies either must undercut their competitors (cost leadership) or they must differentiate themselves in a way that is meaningful to the consumer, that would compel the consumer to pay a premium for their goods/services. (QuickMBA, 2010). The broad market differentiation strategy is a common one. The broad differentiation strategy implies that the service or good "offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition." (QuickMBA, 2010). While many differentiated companies are in niche markets, some companies target the broad market with this strategy, and ultimately are the market leaders. Companies like Nike, Apple, and even McDonalds when viewed within the context of the fast food industry are all firms that utilize this strategy. This report will focus on Apple, as that company is not only a dominant player in its market, but directly sells its differentiation in its marketing communications. Furthermore, Apple has a genuine differentiation strategy -- its products are legitimately differentiated while many companies differentiate mainly on brand image.
Apple's Strategy
Apple is a consumer electronics company that utilizes the Apple brand across several different product lines. Apple has always sought differentiation for its products. In the 1980s and 1990s this differentiation was specifically vis-a-via Microsoft/Windows, the dominant platform in personal computing. Apple was a niche product at the time. With the launch of the iPod, however, Apple began a strategic shift to the mainstream. While it has always remained a niche product in the personal computing business, Apple is mainstream...
Porter's Generic Strategy Porter's Generic Strategies relate to the strategies that different airline companies follow in order to be profitable; e.g., to keep their position as a low-cost, no-frills airline, or a more costly airline with plenty of comforts, or a small company with specific routes that others may not have. Porter's three generic strategies are "cost leadership," "differentiation," and "focus" (IFM). Cost leadership relates to when a company sets out to
Five Forces Analysis Porter's Five Forces model analysis business opportunity "Start business provide music movies online internet" Porter's Five Forces model: A new business for downloadable music and movies online Porter's Five Forces model: A new business for downloadable music and movies online According to the management theorist Michael Porter, "the model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different
Blue Nile Porter's five forces analysis focuses on the factors that influence a firm's ability to earn a profit: the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes, the threat of new entrants and the intensity of rivalry within the industry. The online jewelry business, and Blue Nile in particular, has only a moderately favorable business environment. The company is relatively small in the jewelry business
Generic Strategies Porter's generic strategies began life as a matrix grid featuring low cost and differentiation strategies, which could either be mass market or niche in nature (QuickMBA, 2010). A fifth strategy, hybrid, has been hypothesized by some, noting that there are instances where a firm could be argued to practice some combination of differentiation and low cost. The Swatch Watch has a differentiated strategy. While not a high end watch, it
Apple has a very strong brand name that is helping it to build share for the iPhone, but the product is expensive. It is believed that there is considerable room for a competitor to target the student market with a lower-priced but also feature-rich device. The mainstream player in this market is the humble cell phone. Popular phones such as the Motorola Razr have camera functions, and new phones are
Smuckers is inexperienced with the global coffee trade. For Smuckers, the Folgers acquisition has increased its risk significantly, while the benefits are incidental and synergistic. In short, the gains from the acquisition may not have been worth the risk. The degree of diversification is low, which means that there is little improvement in the company's product-line risk position to counter the increase in risk faced as a result of
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