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MGMT 424 – Midterm Paper

Midterm Paper

Company Background

Apple Inc. is a multinational technology company that designs, develops and sells computer hardware, consumer electronic and online services. The corporation was founded in April 1976 as Apple Computer Inc. and was renamed as Apple Inc. in January 2007. Its headquarters called Apple Campus is located in Cupertino, California, U.S.A. Apple Inc. operates in production and sales of software, computer, consumer electronics, and digital distribution. The hardware products of the company comprise of iPad tablet computers, iPhone Smartphones, iPod portable media players, Mac personal computers, and Apple Watch Smartwatches. Similarly, its online services include the iTune store, iCloud, the iOS App Store and Mac App Store. Its consumer software comprises iTunes media player, iLife, and iWork creativity, the Safari Web browser, the OSX and iOS operating systems and productivity suites. Apple is the world’s largest information technologies company by the revenue as well as the world’s largest retailer.

Comparison of the Negotiation Strategies

Apple Inc. relies on different forms of negotiation strategies useful in promoting the overall strategic and financial performance of the organization. The corporation has been employing the best negotiation methods, which were established by Steve Jobs. The company has maintained a high bargaining power by refusing to compromise on the quality of the products it offers on the markets. The strategic power of the corporation and its ability to deliver quality products has been a major bargaining factor (Hitt, Ireland, & Hoskisson, 2012). Apple Inc. relies on the win-win negotiation strategy. Through such approach, the firm is able to capture additional products and markets from the existing companies. For instance, the corporation managed to purchase some strong IT platforms from IBM. Thus, the win-win negotiation strategy is highly useful in gaining additional success for Apple Inc. In contrast, the firm also uses the compromise negotiation approach whereby it accommodates other companies towards forming a large strategic alliance. The corporation has a high power of developing the products that are complete for the customers. Therefore, at a basic level, the company includes bundle cost, which is relatively low when compared to pricing each item separately. It increases negotiating power over other suppliers.

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Additionally, the company has focused on offering one main model of a product that is regularly updated. For instance, the corporation chose to manufacture just one model of iPhone with an array of different functions rather than several models as, for instance, Nokia does with its product lines. Similarly, Steve Jobs established this strategy back in 1997, upon returning to Apple, where he abolished two thirds of development projects based on not having the ability to deliver groundbreaking products.

Regarding the designing of the product features, Apple has focused on designing simple products in terms of design and features. The product designs are both streamlined and limited in number with few features that are actually of value for the buyers (Kapferer, 2012). In deciding which features are best for buyers and on what to focus, Apple chooses to align it with its customers’ usage patterns, increasing value for the clients, and decreasing the cost of production by adopting simplicity in designing and rationalizing the features at the same time. The company refuses to compromise on the creation of good features making its products competitive.

Value Creation

Apple has a unique business model and value system. The company does not fall short of designing and developing great products. The Apple leadership is focused on building a product that they would like to use and enjoy its value themselves as other customers do. The company does this by having the right designers in place. Most importantly, the corporation is cutting costs everywhere along its value chain, and, at the same time, aligning the element with its strategy. Apple is known for focusing on few areas and avoiding trying everything to escape unnecessary costs.

Furthermore, Apple Inc. is also keen to provide its customers with an exceptional experience. The company knows that its clients make their business and as a result, provides them with a rewarding experience. It concentrates on adding value by designing products with more features than the existing ones at any point. Apple is recognized for its ability to deliver quality services to people who always keep coming to it for the same products. This leads to the increased customer loyalty and product portfolio (Hitt et al., 2012). Annually, Apple Inc. has been able to develop new products and services, which are critical in attracting prospective buyers and retaining the existing clients. Therefore, the company has the strongest brand power that makes it stay ahead of competition.

Strategic Alliance

Apple has been collaborating with different firms to achieve certain objectives such as strengthened innovation power, brand power and newer powerful brands. In the past, the corporation has partnered with Motorola, Sony, Philips and AT & T. The company partnered with these various businesses to tap new technologies that would empower its brand. For instance, Apple allied with IBM and Motorola in the AIM alliance with the goal of creating a new computing platform. This project aimed at using IBM’s and Motorola’s hardware in couple with Apple’s software to create a strong and powerful interaction platform. Recently, the company partnered with Clearwell in order to design and develop Clearwell’s E-Discovery platform for the Apple’s iPad.

The corporation can use its strategies to create alliances with other firms and, as a result, increase its known brand loyalty over the world. By collaborating with other innovative technology companies, Apple has been able to expand its brand to other countries across the world. As a result, the corporation became capable to gain greater market share that led to creation of strong platforms which it could not have made using only its own products. Apple’s innovative ability also attracts other companies and as such creates higher negotiation ability. The corporation only collaborates with the businesses that have the similar product lines or will create newer but limited products of its own features. Therefore, Apple can easily venture in the global markets if it utilizes its negotiation strategies.

Through the win-win negotiation strategy, Apple is able to go global by acquiring new firms and companies in the foreign markets. This approach focuses on acquiring wholly owned subsidiaries in different countries. This helps in ensuring that the company expands its brand to new markets including the emerging ones such as Brazil and South Africa. Thus, the win-win negotiation strategy can be critical in expanding the operations of the brand. In terms of the compromise negotiation method, Apple Inc. is able to integrate and collaborate with other companies to expand its brand to different economies across the world (Kapferer, 2012). The strategic alliances with different firms are useful in expanding the multinational brand to different markets across the world. Finally, the win-win negotiation approach is highly useful in gaining additional success for Apple Inc. It is compared to the compromise negotiation strategy whereby it accommodates other firms towards forming a large strategic alliance. Both approaches are useful in the globalization of the corporation’s products on the new markets.