Question

For the publicly traded U.S. company Apple (AAPL), recommend strategies (based in macroeconomic principles, theories, models, and tools) the company could adopt to successfully maximize long-term profits. Include a long-term outlook for the company.

Answer 1

For Apple to remain ahead and maximise his profits, it should be able to use its core competencies to be both a cost and differentiation leader in this increasingly cost sensitive world.

Apple should also focus on new strategies to block any new entry to the market and hamper current rivals who are up to speed on every innovation. Apple’s innovative and differentiated strategy has turned the company into an industry leader, though it did not stop competitors from coming up with similar products that offer similar value added services at a lower cost. Apple’s differentiation strategy might have kept its loyal customers insensitive to premium prices, it will not however be a sustainable and long lived strategy if it is outperformed at any point in time by a competitor.

Companies in this sector need to not only adapt to their environment to become the leader, they must change the external environment to their advantage and so should be done by Apple.