Apple Inc is a multinational technology company that was founded in 1976 as Apple Computer Company and incorporated in 1977 in California USA. It later re-branded to Apple Inc. to capture its expansion into the production of consumer electronics products (Linzmayer, 2004). Among its globally recognized brands which include Macintosh computers, iPhones, iPods, and iPads have received the greatest attention by consumers, the media, and the industrial players. Apple has a workforce of about 35,000 employees spread across the world. Its sales during the period ended September 2009 amounted to US $ 42.91 billion (O'Grady, 2008). Its advertising campaigns are quite unique and mainly focus on incorporating aesthetic value on its designs. As a result of its corporate strategy, they have curved out a unique reputation in the consumer electronic market especially in the US market (Corporate information, 2010). This has earned it an endorsement from the media industry where the Fortune magazine voted it as the most admired company in America in 2008 followed by a similar endorsement by the same magazine as the most admired in the world in 2009. In this paper, we are going to look at the types of growth strategies that are used by companies in order for them to grow. The Apple Company is going to be considered in this regard. Specifically, the growth objectives of this company are going to be considered as well as its growth strategy. There is also going to a suggestion of an appropriate growth strategy for this company that it needs to adopt in order for it to expand more.
Types of Growth strategies
There are various types of growth strategies that can be adopted by a company in order for it to achieve a competitive advantage and improve its profitability following its growth in size. These growth strategies include; merger, acquisition, joint venture and strategic alliance. In the merger growth strategy; this is a situation where two companies come to an agreement to go ahead and come together to become one new company. The two companies can either be of the same size or one may be larger than the other. The merger process is a voluntary one and it follows the consent of two companies. The name of the new company is often a combination of the names of the two companies.
Considering acquisition, this is a growth strategy whereby one company takes over the other and the one taking over becomes the sole proprietor. Sometimes takeover takes place when the target company is not willing to be purchased. However, with a better price being offered the shareholders are attracted by the acquiring company. Unlike in the case of mergers which are often friendly, the acquisitions may be either friendly or unfriendly.
The other growth strategy is the joint venture. The formation of a joint venture is carried out between two or more parties undertaking a specified activity together. The parties come to an agreement to create a new entity by contributing equity and they in turn engage in the sharing of the revenue, expenses and the control of the enterprise. The joint venture may be for a single specific project or it may be a continuing business relationship. Under the joint venture, unlike in mergers and acquisitions, the original or parent company continues to be there.
Considering strategic alliances as one of the growth strategies; this is a form of association which involves “a mutual sharing of resources or partnering to improve efficiency” (Ankit, 2009, para 15). Under this, the focus is on resource sharing and not on looking for change in control. “Equity investment in other’s company is not any focus” (Ankit, 2009, para 16).
Growth objectives and Strategies for apple Inc.
The main aim and objective of Apple Inc. is going to be to go on growing and succeeding in the development and selling of the most “cutting edge technological products” possible. The Apple Company has always been known to be innovative and it has been bringing high quality technological products to the market. In order to remain in business and also to continue being competitive on the market, this company should consider continuing expanding its operations.
Apple has mostly been preferring to grow internally (organic growth) and has not been seriously considering mergers or acquisitions. This company has been using this strategy in the course of its existence “averaging only about 1 acquisition per year during the past 25 years” (Cheney, 2010, para 1). Contrary to this, in the course of the last five years, other companies such as Microsoft acquired 45 companies, Cisco acquired 30 and Google acquired 40 companies. This may imply that the company is trying to grow internally by investing large amounts of money on research and development.
However, since its main growth objective is to go on growing and succeeding in the development and selling of the most “cutting edge technological products” possible, it needs to consider acquiring more companies. Apple operates in the global market and using acquisition as a growth strategy will enable it to increase its growth rate and capture a bigger market share. In addition, since the company will still be in full control of its operations, it will still be able to go on using innovation as a means of winning the competition without any form of interference from other companies. Acquisition will also enable the Apple Company to improve the value of its stock. More so, the company will also be able to acquire resources in order for it to stabilize its operations. By acquiring companies in the new foreign markets, the company will be able to carry out its operations with minimal operational costs, especially costs associated with promoting its products because it will not take long before its presence if felt in these new markets.
There are various types of growth strategies that are adopted by companies and these include; mergers, acquisitions, joint ventures, and strategic alliances. A company can adopt any of these strategies in order for it to realize its growth objectives. The Apple Company has not been very active in adopting any o these strategies. It has been using organic growth or growing internally. However, following its growth objective of serving a wider market with the most innovative products, there is need for it to use acquisition as its growth strategy. This will enable it to continue remaining competitive on market since it will be able to capture a larger market and will also be able to increase its growth rate among other benefits.
Ankit, J. et al. (2009). Growth strategies. Center for Retail management. Retrieved from, http://www.slideshare.net/suresh.singh/growth-strategies-presentation-805753
Cheney S. (2010). Apple’s incredible efficient growth. Business insider. Retrieved from, http://articles.businessinsider.com/2010-05-24/tech/30006948_1_apple-s-dna-innovative-products-organic-growth
Corporate information, (2010) Apple Inc, the Winthrop Corporation . Retrieved from, http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=037833100
Linzmayer, W. (2004) Apple confidential 2.0: the definitive history of the world's most colorful company. New York: No Starch Press.
O'Grady, J. D. (2008) Apple Inc: Corporations That Changed the World, London, Greenwood press.