Group 5: American Express and Apple

Hapitana, Jason Mabingnay, Chrissy Nicole

Romero, Kyla Mae Sanao, Krizia Nicole

Solidum, Cedie Sustal, Kimberly May

American Express

American Express is a global payments company that issues prepaid, credit, and charge cards to
consumers and businesses. It is one of the leading card issuers in the United States. It's known
for its top-notch customer service and some of the best rewards available. In addition to issuing
cards, American Express also processes transactions made with its card, including cards issued
by third parties.

Cost leadership strategy involves gaining a competitive advantage by lowering the cost. Cost
leadership is the main generic strategy that American Express Company uses in various
consumer markets.

How American Express Company uses a cost leadership strategy?

 The primary objective of using this strategy is to preserve the market leadership position
through efficient value chain management.
 This strategy allows American Express Company to expand the market share by targeting
the middle class, which makes the largest proportion of overall consumer market mix in
most of the countries. Middle class consumers generally place high importance to the
pricing factor and cost leadership is the best strategy to cater the needs of this consumer
segment.
 American Express Company focuses on affordability and easy accessibility of its produce
across the globe, which leads towards high brand awareness and high sales growth and
provides a strong competitive advantage basis.
 Other than charging low prices by lowering production cost and maximizing supply chain
efficiency, American Express Company frequently offers discounts and coupons to
 achieve sales targets and handle the competitive pressure by its closest rival. The
intended outcome of these discount and promotional campaigns is to increase brand
popularity and encourage consumption.

Apple Inc.

Apple Inc. is a multinational corporation that produces consumer electronics, personal

computers, mobile communication devices, computer software and peripherals, commercial
servers, and is also a digital distributor of media content. The company also owns a chain of
retail stores known as Apple Stores, which are available both offline and online. The founders of
Apple Inc., Steve Jobs, Steve Wozniak and Ronald Wayne created Apple Computer on 1st of
April 1976, and incorporated the company on 3rd January 1977 in Cupertino, California.

Apple Inc. Differentiation

1. Apple differentiates its products by pricing them higher than its competitors implying that
the products are better quality and incorporate the latest technology.
2. Apple tries to enhance market demand for its products by differentiating them by making
them unique and appealing to consumer.
3. Apple’s pricing strategy relies on product differentiation which focuses on making
products unique and attractive to its customer base.
4. Apple Inc. has initiated business-level strategies focusing on cost leadership and
differentiation, which have made the firm a dominant force in almost all its lines of
business, with products like Mac computers, iPhones, iPads, iTunes and App stores
taking a big market share.