Financial Strategy at Apple
It is essential for any organization, regardless of how long it has been in operation or how new it is, to have a solid financial strategy that serves as the foundation for all future financial decisions. The primary business strategy at Apple is a financial one, notwithstanding what people may read in the business news about the company's product development, marketing, and innovation (Haslam et al., 2013).
Objective: Maximizing Profits
The main objective of Apple is to make as much money as possible from each and every transaction it does (Son, Lee & Kim, 2015). The company's financial strategy, which Apple has consistently followed, is to try to maximize its profits, since the return of Steve Jobs to the company.
Foundation of Business Model
Apple's foundational financial plan serves to inform all the other aspects of the company's business model. For instance, the company puts product development at the core of the business (Son, Lee & Kim, 2015). To maximize its margins, the company manufactures products that customers can find and buy nowhere else. This strategy entails one-part unique and difficult-to-emulate features, cutting-edge design, as well as several parts marketing (Haslam et al., 2013). Moreover, Apple uses always launching strategy (McCahery & Vermeulen, 2014). The launch strategy entails super-hyping its products for purposes of building the greatest army of first adopters possible.
Maximizing Margins and Early Adoption
In conclusion, the major financial strategy employed by Apple is maximizing margins, achieved through maximization of early adoption. This explains why the company is extremely secretive, since it is impossible to maximize early adopters when your items get old before they are launched. As a company committed to financial strategies, Apple does not just seek to sell its products and bank the shekels. Instead, it seeks to have the clients keep buying the products through their services and devices.
References
Haslam, C., Tsitsianis, N., Andersson, T., & Yin, Y. P. (2013, December). Apple’s financial success: The precariousness of power exercised in global value chains. In Accounting Forum (Vol. 37, No. 4, pp. 268-279). Elsevier.
McCahery, J. A., & Vermeulen, E. P. (2014). Understanding the board of directors after the financial crisis: some lessons for Europe. Journal of Law and Society, 41(1), 121-151.
Son, I., Lee, H., & Kim, J. (2015). Preannouncement and Release Effects on Apple’s Supply Chain. International Information Institute (Tokyo). Information, 18(6 (B)), 2627.
