Commenting on reports that Apple has become the world's first 1 trillion dollar company, Loizos Heracleous, Professor of Strategy and Organisation, Warwick Business School, said:

"Apple’s 1 trillion valuation did not happen by accident. It is a result of a solid strategy, consistently executed over the years, that achieves high levels of quality and innovation, while simultaneously excelling in efficiency. In this way it balances objectives that many consider incompatible. Apple’s winning strategy is analysed here: https://warwick.ac.uk/newsandevents/features/quantum-strategy/

"Like any strategy, it encompasses tough choices and entails risks. In Apple’s case, about two thirds of revenues are derived from the iphone, and its market penetration in emerging economies has moved slower than ideal.

"However, Apple’s healthy ecosystem - the interconnected products, music streaming, apps and other services; means that the iPhone is not just a product but a platform that enhances Apple’s market access and market power (e.g. in terms of pricing) in a variety of sectors.

"Apple is pursuing a host of ongoing innovation projects that will likey produce the company’s next radical innovation. In the meantime, its business model is robust and innovations in various parts of the ecosystem are able to sustain profitable growth.

"People have been predicting Apple’s demise for many years, but Apple’s performance has only been growing stronger since Steve Jobs’ untimely demise. Its strategy sheds light on why this is the case."

3 August 2018

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