Apple Inc. is a classic company that employs an effective offensive strategy to outdo its competitors in the market that it operates. I chose to discuss Apple's offensive strategy because the company has been able to combine various offensive strategies to establish itself as a global leader in the smartphone industry. The company has been leapfrogging competitors by being the first to market products with next-generation technology. Apple's launch of the iPhone was a classic example of disruptive technology in the mobile phone industry ( Xie & Liang, 2013) . The introduction of the iPhone ended the dominance of Nokia in the mobile phone market and Nokia has since struggled to keep up with other smartphone makers in the market ( Xie & Liang, 2013) . Apple’s disruptive technology in the smartphone industry was defined by the increased storage capacity of devices, higher computer processor power, and fast internet connectivity.
Companies that leapfrog competitors by being the first to market products with the next-generation technology should also understand that long-term success does not depend on a single disruptive technology such as the invention of the iPhone as the first smartphone. Apple understands that long-term success relies on constant refining of the iPhone to continue thriving on its disruptive smartphone innovation ( Xie & Liang, 2013) . Thus, when other competitors started entering the smartphone industry to compete with Apple's iPhone, the company used another offensive strategy of pursuing continuous product innovation to draw sales and market share away from the less innovative products. As a result, Apple has been introducing new versions of the iPhone, such as iPhone 6, iPhone 7, and iPhone 8, and so on, thereby raising consumer expectations of the company.
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While Apple strives to remain competitive in the market by using an effective offensive strategy to ward off competitors from eating into the company's market share, it remains to be seen if the company can withstand the disruptions brought about by the current COVID-19 pandemic. The worst effect of the pandemic on the company is that the COVID-19 disruptions have badly impacted Apple’s supply chain. For instance, closed shops in China as well as iPhone’s production constraints forced the company to scrap its March quarter revenue guidance (Shih, 2020). The disruptions in the global supply chain would adversely affect Apple's offensive strategy of continuously refining its existing product to gain a first-mover advantage (Gamble, 2021). The fact that production has been affected in China implies that Apple’s introduction of more refined products would be slowed.
The current crisis might have challenged Apple to rethink its strategy of overreliance on foreign suppliers of its critical production components. Perhaps Apple might start thinking of engaging in vertical integration strategies by starting to produce some of the main components of its products that are currently being outsourced from China (Gamble, 2020). Vertical integration has both benefits and disadvantages. The short-term benefit is that it will allow the company to overcome the production shortage brought about by the closure of companies in China. However, the approach would require a heavy investment in production plants locally, which would be an expensive business to undertake.
Finally, Apple’s post-COVID-19 future seems healthy. The suppliers would restart producing at full capacity once the economy returns to normalcy. According to Gamble (2020), outsourcing makes strategic sense when specialists abroad can perform an activity cheaply and better. Apple’s revenue growth over the previous years is due to the low-cost of production and the availability of expert engineers in China. Therefore, the company is expected to continue outsourcing once the current pandemic is over. The fact that most of the main competitors are also not immune to the current pandemic is good news to Apple and the company should invest in strategic ideas of retaining its market share once the business is back to normal.
References
Gamble, J., Peteraf, M., & Thompson, A. (2021). Essentials of Strategic Management , 7 th Edition. NY, NY: McGraw-Hill. Chapter 6.
Shih, W. (2020, Sept.-Oct.) “Global Supply Chains in a Post-Pandemic World.” Harvard Business Review . https://hbr.org/2020/09/global-supply-chains-in-a-post-pandemic-world
Xie, W., & Liang, H. (2013, July). A case study: Innovation strategy assessment of the leading smartphone companies. In 2013 Suzhou-Silicon Valley-Beijing International Innovation Conference (pp. 121-126). IEEE. doi.org/10.1109/siic.2013.6624178
