Evaluating Diversification Strategies

Introduction

Diversification strategy is a growth strategy whereby a company increases the number of products it manufactures as well as expanding the geographical coverage. This strategy is used to intensify competition in the global markets (Hitt, Ireland & Hoskisson, 2009). Diversifications as a business strategy has been discussed in this paper with a case study of Apple Inc. Strategic recommendations to be used by the company to improve the market position of the company have been provided.

Apple Inc and the diversification strategy

Apple Inc. is a company in the computer industry that has diversified its product line and has started operations in different countries. Apple manufactures computer software, computer hardware and electronics. The company started by manufacturing computers but later diversified into the production of electronics. The management of the company has embraced modern technologies to manufacture innovative products.

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Apple has been able to capture customer loyalty for its products in the global markets by manufacturing products which match the needs of the customers. To expand its global market operations, Apple has introduced retail stores and online stores to provide its products to the global customers. Apple operates in many countries and it has almost penetrated into all continents of the world. The iPod product which was introduced lately has brought a lot of competition in the music industry and customers prefer this product to others in the market (OGrady, 2009).

The management of Apple applies diversified management strategies to ensure that all the employees are innovative and productive. The president of the company, Steve Jobs has employed leadership strategies in the management of the company and this has brought about effectiveness in the production systems. Apple has employed diversification strategies in all areas of management to ensure it acquires a competitive position in the global market place (Lussier, 2008). The company uses the R&D department to develop innovative marketing and production strategies. Apple has a well developed structure which enables all the stakeholders to benefit from the activities of the company (OGrady, 2009).

Conclusion

Apple has been successful in its diversification strategy by introducing a variety of products in the market. The company has also ventured into different markets in the global scene. Apple has also used diversified strategies to manage its resources. Therefore, Apple Inc. can be said to be a successful company in diversifying its products, markets and management strategies.

Recommendations for diversification

To: Apple Inc.

From: The Author

Date: December 2, 2010

Re: Recommendations for diversification

This memo provides a list of recommendations to Apple Inc as a way of improving the diversification strategy of the company. After carrying out careful analysis of the diversification strategy adopted by the company, it has been evident that the company still requires improving some operational areas.

First, the management should ensure all the products manufactured reflect the cultural aspects of the consumers in global markets. This will be achieved by liaising with all stakeholders to learn the specific cultural aspects of the customers.

Secondly, the management should consider improving the products to avoid poor customer perception. The company has been facing problems with some of the products offered in the market and this is creating a negative image. Thirdly, the management should make strategic partnerships with other companies so that it can penetrate other markets. Lastly, the management of the company should do more research about changes in consumer demand to ensure they manufacture products which match the prevailing market demand.