Apple Company - Corporate Level Strategy

Apple Company - Corporate Level Strategy

Introduction

Apple has made a number of alliances with several companies in its corporate history. Interestingly, the list also includes long term rivals such as IBM and Intel. The company has only applied non-equity based business level cooperative strategies, in both of the ventures discussed. The cooperative linkages were made based on strategic objectives, which posed certain risks apart from the expected benefits. This paper analyses the type of strategies used and the effects of each strategy on each of these alliances.

Discussion

A cooperative linkage is basically an alliance formed by two or more companies that work together for achieving a common objective. Apple, Inc. has formed a few cooperative linkages in its history, out of which two are the most prominent: its alliance with IBM and Motorola in 1992 (also known as the AIM alliance), and its cooperative alliance with Intel in 2006 (Downling, Kerris, & Beerman, 2005).

The AIM (Apple-IBM-Motorola) alliance was created on October 2, 1992. The purpose of the alliance was to give a competitive response to Wintel (Windows and Intel collaboration; refers to personal computers that are running MS Windows and are also equipped with Intel x86 processors). Wintel was to receive a challenge from Apple's alliance with Motorola and IBM; the group was planning to come up with a next generation operating system and an innovative design. The alliance resulted in the formation of the Performance Optimization With Enhanced RISC-Performance Computing (PPC or Power PC) Central Processing Unit. These CPU's were used in processors with high performance. Apple later used this product in its Macintosh systems as well.

The company's alliance with Intel happened in 2006. News to the press by (Downling, Kerris, & Beerman, 2005) revealed that the company will be producing Macintosh computers which would be equipped with Intel® microprocessors. Apple has always been a staunch proponent of industrial innovation, and Intel has been the largest chipmaker in the world. The alliance was clearly a strategic one; it benefitted IBM by increasing its customer base, while it enabled Apple to compete with rivals like Hewlett-Packard and Dell, due to the high-performing Intel chip (Edwards, 2006).

Apple-IBM-Motorola (AIM) Alliance

Apple's alliance with IBM and Motorola was a business level cooperative strategy in response to the competition posed by the Wintel alliance of Microsoft Windows and Intel. It can therefore be called a competition response strategy. A competition response strategy is a reactive strategy in which the firm employs a tactical strategy in order to defend its market position in the face of the challenge and risk posed by its rival (Hitt, Ireland, & Hoskisson, 2010). However, it can also be termed as a horizontal complementary strategic alliance due to the fact that IBM and Apple have combined their own resources for developing a better computing experience. The focus of the alliance was towards collaborative product development. The companies later split up and became rivals again.

Advantages of the alliance

The companies had certain advantages because of the co-branding:

The cost of launching ...