Apple Inc. is one of the most premium brand names that one could think of. Apple has been valued as the most valuable brand across the globe i.e. valued around $151 billion. Apple Inc. has successfully grown by more than 6%; whereas, its share values has also ascended by 255% in last 5 years, which is accumulatively double than the overall return of Nasdaq. This incredible success and superior brand image of Apple Inc. is in fact the result of Apple’s distinctive and thoughtful strategic competitiveness. Also, above average returns, revenues and exceptional brand image of Apple clearly reflect that the company has successfully achieved competitive advantage, which means that it is currently relishing the true powers of its strategic competitiveness in comparison to its rivals like Samsung.
Apple Inc. has a competitive advantage over Samsung and other market players for a number of factors, which mainly include Apple’s software, hardware, premium pricing, high-level innovation, highly effective digital asset management through consumer data, brand appeal, highly integrated products, vertical integration, and retail strategy (Bejarin, 2015). These are the core factors that are contributing to Apple’s competitive advantage. Apparently, by following the fundamental business philosophy of Stave Jobs, Apple Inc. is committed to a number of core principles that are also referred as the 4-startegic pillars of Apple Inc. This mainly includes focusing and targeting high-end market, offering a limited number of products, prioritizing profits over market share, and creating a halo effect, which make people go famish for Apple’s product.
On the other hand, the company is not committed to offering products for low-end or medium income class, while also not having its focus on making bulk sales of ordinary products. Apple also has a premium price strategy, which makes people to get an image of having superior value for its higher prices (Maggee, 2016).
Both the Industrial Organization (I/O) Model and Resource-Based are the models of Above-Average Returns; however, there are some fundamental differences between the two. The Industrial Organization (I/O) Model differ from the Resource Based Models on the core perspective and spectrum of consideration as I/O model takes on the external perspective in order to explain the forces that lie outside the organization and represent the existing or potential dominant forces that could influence the strategic actions of a firm. On the contrary, the Resource-Based Model undertakes the internal outlook of the organization in order to determine and explain the distinctive set of organization’s internal capabilities, as well as, resources, and serves as a foundation for above-average returns earnings.
The basic assumptions of Industrial Organization (I/O) Model are;
The general external environment, industry, and the competitive business settings enforce constraints and pressures over the firms, and determine the most profitable strategies.
Business firms that are competing within the same industry regulate similar resources that are relevant to their strategic approach and therefore, they pursue same strategies.
Resources that are necessary to implement strategies are highly portable across the firms.
The basic assumptions of the Resource-Based Model are;
Every firm has a unique set of organizational capabilities and resources that offer the fundamental ground for its strategic activities and business returns.
Resources are not always portable or moveable across the firms for example skills and people.
I find both the model effective and essential at their own place, and for an effective strategy making, a firm needs a blend of both the model in order to rightly capitalize on its resources and capabilities while keeping its weaknesses and strengths in consideration and also timely exploiting the opportunities in the external environment when avoiding or mitigating the threats. Therefore, it is unjustified to rank one model better than other as both are equally significant for effective strategy making (Priem & Butler, 2012).
References
Bejarin, B. (2015). Why Apple Has a Strong Competitive Advantage. Retrieved From https://techpinions.com/apples-competitive-advantage/5 on January 12, 2017
Maggee, D. (2016) Competitive Advantage: Multiple Products That Integrate as One. Retrieved From http://www.ibtimes.com/apples-competitive-advantage-multiple-products-integrate-one-300605 on January 12, 2017
Priem, R. L., & Butler, J. E. (2012). Is the resource-based “view” a useful perspective for strategic management research? Academy of management review, 26(1), 22-40. Retrieved on January 12, 2017
