Apple’s Financial Strategy

Any company, regardless of how old it is or how long it has been in operation, must have a solid financial strategy that serves as the foundation for all of its financial decisions. No matter what people read about Apple in the business news regarding product development, marketing, and innovation, the company’s primary business strategy is a financial one (Haslam et al., 2013). The main objective of Apple is to make the most money possible from each and every sale company makes (Son, Lee & Kim, 2015). In this sense, seeking to maximize its margins is the company’s financial strategy, an approach that Apple has persistently pursued since the return of Steve Jobs to the company.

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.

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.