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Strategic alliances of Apple

 

An organization may have strategic alliance with other organization to achieve a set of common objectives but they are independent organizations. (W.L.Hill, 2004, p. 138) This form of strategic alliances will be made to meet their needs and it is not in the form of merger or acquisition. The key idea behind this to share inputs of the business like products and services offered, business models used, production methods, using the intermediaries, using manufacturing facilities, funding the new projects, sharing expertise or intellectual property.

Merger and Acquisitions

Organizations may go for merger or acquisition to improve their business process and to achieve their business needs. Two or more organization combines its business activities to achieve their common goal may be called as Merger. Acquisition may takes place if a company takes over the business of others to meet its future targets. (W.L.Hill, 2004, pp. 201-202) Another reason behind the merger and acquisition is reduce the competition level in the market.

Corporate global strategy

The reason behind the entries of firms globally is to increase their profitability, lowering costs, differentiates products, diversifies the risk and economies of scale. The entry will reap more benefits but it is tough  to do so. (Wheelen, 2007, p. 48) Thus the firms may go for either strategic alliance or merger or acquisition of firms which will make them to enter the market easily.

Benefits of the strategic alliance in the context of Corporate Global strategy

  1. It will help the firms to increase the value of the product in the minds of customers

  2. Firms can easily access markets to offer their products and services

  3. By sharing expertise knowledge, they can have comprehensive expertise knowledge in their operations

  4. They can share the technological capabilities, so it is strengthened.

  5. The firm can become financially strong and can concentrate on new things (Wheelen, 2007, p. 189)

Benefits of the Merger and acquisition in context of Corporate Global strategy

  1. Merger and acquisition will help the organization to increase its shareholder value.

  2. Companies can enjoy tax gains

  3. It is easy to recover from the business problems, a more competitive and cost efficient company can be generated

  4. Merging two companies will increase the market share, increase the production count and can achieve economies of scale.

  5. Through merger and acquisition, a firm can easily enter the market

  6. Firms can enjoy administrative benefits

  7. Cost decreases, Sales increases and profitability increased. (Suresh, 2009)

Strategic alliances and Mergers & Acquisitions of Apple Inc

  1. Apple and Disney is having strategic alliance to improve the performance of Disney store – Experience and to reduce the losses of itunes stores and Disney stores

  2. Apple and HP is having alliance to deliver a HP branded digital music player based on apple’s ipod

  3. Apple and Microsoft allied to make Office for Mac and to bundle apple with Internet explorers in their new machines

  4. Apple acquired 24 companies from 2000 onwards, some of the firms are  Netseletor, Astarte-DVD Authoring Software, bluebuzz, Poly9, C3 Technologies …

Maximizing Shareholders value through Strategic options – Strategic alliance and Merger and Acquisitions
Strategic alliance
Gaining capabilities

Apple can share its knowledge, technology and expertise with the allied organization to market its products worldwide. It will create an opportunity to attain its targets and maximizes the shareholder value.

Easier access to target markets

It is tough to attract a new market and also it is costly. When apple is going for strategic alliances, they can smoothen the channels of reaching products to the consumers and can enjoy regional, legal and operating benefits.

Diversifying the risk

Designing a product common for global customers will not always hit the market. Apple also in the list, whose products also faced trouble in the market. Through strategic alliance it can diversify the risk especially financial risk.

Political issues

Political factor is a major issue for a company like Apple, should know the regulations and norms imposed by the Government. When comparing to Joint venture, Strategic alliance is the best strategy to minimize the political risks for Apple Inc.

Achieving synergy and competitive advantage

Competitive advantage is the very big advantage of Strategic alliances and core competencies will be spread through allied companies easily. It will help to achieve synergy and to have competitive advantage.

Merger and Acquisition

Apple can enjoy huge benefits through right merger and acquisition

Synergy

Through merger and acquisition, Apple can have enhanced performance and cost efficiency. Profits of the concern increases by a company’s advantageous factor diversifies others weaknesses.

Cost efficiency

Merger increases the purchasing power, reduces the number of employees, increased volume in production will help Apple to cut its cost further.

Competitive edge

Sharing knowledge, expertise, resources helps to manage competitive edge by reducing the risks associated with the business

Strengthen the business network

Apple can strengthen its business network and it will help it to sell more.

Market power

The market share of Apple will increase and the mergers and take-overs will make it market super power.

Economies of Scale

Demand for the Apple products will increase through merger and acquisitions and it will provide sales opportunities to it. Thus the number of units to be produced will increase, which minimizes the cost and can achieve economies of scale

 

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