IPhone 7 Business Performance And Strategies

Company research

Discuss about the IPhone 7 Business Performance and Strategies.

Company Profile  

Apple Inc is the US Multinational company which develops designs and sell consumer electronics, software and different online services. The headquarter lies in Cupertino, California. The hardware products include Iphone, Mac Personal computer, Ipad, The IPod, Apple Smart Watch. The consumer software comprise of MacOS & IoS operating system.  Apple Inc. was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976.  The company incorporated in the year 1977 and saw a significant momentum and revenue growth. They went public in 1980 and saw an instant financial success. In January 2007, Steve Jobs renamed Apple Computer, Inc. to Apple Inc. in order to reflect its focus in the direction of consumer electronics and proclaimed the Iphone.  The company saw a significant accolades and noteworthy financial achievement after the launch of Iphone series. Apple is the largest information technology company by the revenue and the second largest mobile phone company after Samsung. The company employs 116,000 Full time employees as on October 2016 and maintains approximately 498 Retail stores in 22 countries. The global annual revenue amounted $ 215 billion for the 2016 fiscal year. The brand enjoys a high level of brand loyalty and frequently ranked as the world’s most precious brand. Iphone is a line of smart phones designed and marketed by the company. The first generation was launched in June 2007.  Apple has released ten generations Iphone models. The original Iphone was portrayed as “innovative” and a “game-changer” for the mobile phone industry. The success of phones has been credited with ample of efforts to make it one of the world’s most exclusive publicly traded companies.

Product Introduction

The Iphone 7 and Iphone 7 Plus were designed, developed, and marketed by Apple Inc. The Smartphone was announced on September 7, 2016, at the Bill Graham Civic Auditorium in San Francisco by Apple CEO Tim Cook. It was released on September 16, 2016.  The company released it in many countries globally throughout September and October 2016. On the whole, the devise is similar to the Iphone 6S. There are new specifications in the Smartphone that are: new colour options, a new capacitive, static home button, and no 3.5 mm headphone jack and water and dust resistance. The internal hardware is also been upgraded including into a heterogeneous quad-core system-on-chip. This has enhanced the overall graphics performance of the new phone. The rear-facing camera is upgraded to 12 megapixels.

Product Introduction

Business Performance Measures

A growing business requires close and careful inspection in order to ensure an effective investment. This can be attained by putting performance measurement system on track. The progress of business depends upon managing the information in the best possible way. The starting point of business depends upon the development of business. The starting point for system is to target the business in a strategic way. The guide set out to improve the business by targeting the objectives. It also helps in highlighting the key business areas in order to manage the business (Graham, 2008). To attain an effective growth, it is important to evaluate product performance. Globally there was an increase in the overall sale of the handset. Australian market witnessed a sluggish market in previous year. This led to a slight fall in the sale of the Iphone 7.  Below mentioned are the statistics published by Telsyte’s Australian gives an insight into the sale of smart phones in the year 2014 & 2015. There is a slight fall by 1 percent.

(Source: Smith, 2016)

The product has the fresh A10 Combination chip product that creates an edge. It is a fresh layout with four core process: high performance cores, and two low -power centres by using battery throughout regular activities. The first Technique used by the company is the target market strategy. This strategy let company divide the customers into a definite segment, and convene the requirements of diverse customers (Berthon, et al 2012). This has allowed in enhancing the core competition in the area. Iphone has a strategy to target the right consumer groups. Their current target audiences include young people between the ages of 20 and 35. This section belongs to college graduated and the middle-upper income level.  This section has ability and craving to buy a mobile product at a high price. Apple has understood the consumer behavior and objects its capabilities according to the market need. The success of the company independently depend upon the advertising capacities and an effective marketing campaigns strategies in order to support the selling. The business performance of the Iphone 7 can independently be judged on marketing tool that has created a line of loyal customers (Dou, et al 2010).

Overall performance of the company: Apple’s Iphone business saw a growth of 2% year over year, with revenue up 3%. The latter data implicates that the company’s average selling price is growing.

Company Performance

In Australia, Apple’s Iphone was the most popular brand of Smartphone sold in Australia with an estimated 1.7 million units sold in H2 2016.

It is a strategic management tool used to understand the performance of the company. Iphone 7 has a huge market share when compared to its competitor. The balanced scorecard significantly allow in developing an effective understanding. This is to understand the performance on various different parameters like: Finance, customer, internal operation and learning and growth (Kim and Ko, 2012).

Parameters	Strategic Priorities	Objectives
Financial	Financial Strength	·         It is one of the most consistent winners in the past 10 years. From investors point of view the product is known to be extremely reliable.
customer	1.customer Satisfaction      2.Win-Win dealer Relations	·         It achieves impressive achieving impressive customer satisfaction scores every year.       ·           Apple allows software developers to create apps (Hughes, 2012).
Internal	1.Building customer value 2.Operational Excellence	·         The purpose of the brand is to add value to the brand by a superior experience. The brand has a chain of loyal customers who are pushing the brand to make innovative changes.  The operational excellence is based on the amount of efforts made by the company. The internal factors are based on accomplishing high standard goals (Rosenbloom, 2012).
learning and Growth	1. Motivational and prepared employee 2. learning and development	·         Apple is a pioneer of change. The core competitive advantage of the brand is to take multiple efforts on learning and growth. There strategy is to retain the customers for a significant longer time-period

Measures	Targets	Initiatives
·         Revenue Growth of 7 Percent and EPS Growth of 17 Percent in the August	·         The company has targeted for a long term sustainability	·         They are taking serious efforts to deal with the problems by concentrating on international market
·         The customers are loyal in nature that creates a chain of loyal customers. Once a person has used an Iphone he will not switch to any other brand.	·         They are targeting on developing an effective customer relationship. The target is to gain long-term customers as well as dealer relationship(Strauss,2016)	·         For the purpose Apple is providing with an effective customer services. The location of authentic service centre has helped in managing the customers.
·         The purpose of the brand is related to management of customer value and to continue the trust factor. The fact that the customers have a faith on the brand can’t be ignored.	·         The target of the brand is to develop the core value. Iphone 7 was launched with distinct new features. It has captured customer’s value. The internal operational excellence has allowed the brand to carry out distinct role in a significant way (Blakeman, 2014).	·         New initiatives like the efforts in the  manufacturing process equipment, and information systems hardware, software, and services has helped the brand in making significant changes.
·         employee motivational benefits are been given to the employees, Effective learning and growth process in working	·         There target is to increase adaptability. In this way the brand can gain longevity in every market	·         Apple is focusing more on the higher-order needs. Apple gives reward to its executives by paying recognition bonus of salary from 3 to 5 percent.

From above analysis it is clear that the organization is meeting up with the targets in order to deal with the situations. In order to manage the revenue company is outperforming in the local as well as the international market.  To gain competitive advantage the brand has gained ample of efficiency in the profits. It is able to maintain the revenue at a high level through development of the effective results (Armstrong, Adam, Denize and Kotler, 2014).

Strength ·         Brand equity ·         Innovative technology ·         Loyal customers ·         Amazing software ·         Wide support from developer ·         Consistency in design

Weakness ·         Over expensive brand ·         The memory is not expandable ·         There is no more variety in the model.

Opportunity ·         Huge amount of market potential ·         Improved  technology advancement ·         More dependency on digitization ·         Should focus on geographic expansion ·         Enhancement of  Accessories

Threat ·         Android phones include more features than the Iphone. ·         There is lack of innovation in the model that has lead to inefficiency. ·         Excessively overpriced brand with loads of pressure on sustenance ·         Causing a pressure on the brand image on a long run. This is an ineffective ·         The Samsung Galaxy 7 phones are hugely accepted by the existing Samsung users.

Brand equity –it is one of the renowned brands. Iphone 7 came in the market with a promise to compete the other brands. Apple is a brand with a promise.

Innovation – Above And Beyond The brand equity, the brand is known for its innovative technology. This is important to note that the brand is working on an innovative IoS system and is accountable for many tech revolutions (De Mooij, 2013).

Consumer loyalty – Once an Iphone user is always an Iphone user. Apple has created a line of loyal customer in the whole world. The users’ are enthusiastic for the launch of new Iphone series. The design is similar to Iphone 6 and 6S (Wright, et al 2010).

Amazing software and OS – The IOS operating system is known for its flexibility and speed. The user interface is incredible and user friendly. Customers find it easy to use and implementation of new and effective user updates has allowed in gaining a high level of customer satisfaction.

High price – The price they charge is very high; with such brand equity the only target is to retain only those customers who can afford it. The Apple Iphone is costlier against Samsung phones with similar features. Iphone 7 when compared to other competitor has fewer features

Restrictions on the phone – There are certain restriction on the Iphone that has accompanied as its weakness. Apple has added various features into the phone but there are certain restrictions in the system like no Bluetooth, expandable memory is absent, and non removable battery. The phone is overly priced but the new phone has limited features (Mohr, Sengupta and Slater, 2009). 

Balanced Scorecard

No variety – Apple Iphone design is very constant   whereas the other competitors are providing with a vast range of designs. It is disadvantageous for the population which continuously changes phones. People don’t get the diversity that they look forward to from Apple Iphone. It is one of the reasons why people switch onto other brand. The other competitors are providing with a variety of features and an expandable memory (Rao, 2009).

A Wide market opportunity- The Smartphone industry will see an excessive growth in coming years. It is however important to notice that the brand is gaining competitive. It will utilize the huge market growing opportunity and development. In the recent time, the market has developed a wide range of opportunities for the smart phone industry (Noel, 2009).

Developing technological advancement – The development of technology is an added advantage for the brand. The software development and growth has created excess opportunities against the other brands. It is therefore important to manage the technology in the effective way by implying with the better and high-end Technology.

Increasing dependency on digitization- In the recent time, people are becoming aware about the use of Smartphone for professional reason. It will therefore help in gaining a competitive edge over the other brand. Iphone in itself is a professional phone used by a wide number of people. With such a wide fan following the brand has gained a competitive advantage in a significant way.

Geographical Expansion- the Company is to expand the business operations. In this way the company can gain the competitive advantage. The outreach of Iphone is very wide. The outreach of the company is very high. There are vast opportunities for the company in terms of geographical expansion (Roger, 2010).

Android – One of the threats caused by the company is related to android. It is providing with the ample of facilities. Google is providing with most efficient mobile operating system

Samsung –one of the threats posed by the company is from the android company. Apple Iphone is mobile phone Company selling phones at different prices.  It is selling phones in all shapes and sizes. Samsung has a different android OS and camera within different price scale. Samsung is the biggest competitor for Apple Iphone.

Lack of innovation – There is lack of innovation in the phone. The product is as similar to that of Apple. The brand has to come up with innovative technology.  Lack of new product and innovation has become a threat to the company.

Threat of brand Apple – The company is not using innovation is causing a threat to the company on the large scale.  This has led to a threat to the brand. There is a necessity to launch a single innovative product in the coming years. This will help in increasing the overall brand value of the product.  The brand need to maintain a strong market strength if it want to perform well in the market (Lovelock and Patterson, 2015).

The company has launched a wide variety of products that are helping in gaining long term sustainable objectives. Prior to Iphone 7 the company has launched Iphone 6, 6S & 6 plus. The company has created an incredible popularity in the past 2 years. Iphone is a renowned brand name and within a period of 2 years from the launch of Iphone 7 the brand has earned position in the international market. People do have different set of behavior for Iphone. The users do have different set of opinion. Apple’s Iphone was best seller in Australia with an estimated 1.7 million units sold in H2 2016. Sales were hampered in 2015 due to the decline in the exchange rate of Australian dollars. It forced up the prices of premium handsets; whereas telecommunications providers are also reducing subsidies. Low-cost operators Oppo entered the market with competitive devices increasing the chances of switch over.

People are using Iphone in order to maintain status in society (Hsu, 2014). A year ago Iphone sales passed a billion making it a biggest selling consumer product. Penetration of Smartphone in the international market is around 90 percent. Iphone is the biggest selling brand with a huge impact on the brand. It includes biometrics sensor that has proved to be an important part of the facilities as provided by the company. In these years the brand has gained name in the market. It is status symbol for the people and mostly used by the youth. In order to understand the consumer behavior it is important to analyse the changes taking place in the society. The Iphone is known as an ultimate price comparison tool and a great competitive leveller, enhancing the shift of power from producers to consumers that had already begun (West, Ford and Ibrahim, 2015).

The starting point of business depends upon the development of business. In the recent changing business scenario it is visible that the business can do well in term of economic and social strength. The economy shift has a lesser effect on the revenue of the Iphone. Price rise has a little to do with the Iphone users. The over-expensive price of Iphone doesn’t pose any impact on its sales. The sales are very lesser affected by the economic modulation. Apple is using various techniques to attract consumers. It is using the effective marketing tools to attract consumers from different social background. Iphone 7 was criticized due to lack of features when compared to its predecessor. While comparing the consumer behavior and revenue there has been an incredible growth in the revenue. There have been very fewer changes in the features (Sliwinska, et al 2008). The company has gained considerably well but everyone around is waiting for the significant changes in the handset. The progress of business depends upon managing the information in the best possible way (Ryan, 2016).

Apple has accepted that the company is moving to a three-year upgrade cycle. Before that Apple used to come up with a new model every year. Iphone 7 is based on the same basic design with fewer changes. There is no change in the model. The company is using the 2014 model with very few changes. The company need to understand the changes taking place in the smart phone industry over the period of two years (Weber, 2009).

Apple’s generic and intensive growth strategy is related to its pricing, marketing, and other areas of the business. Apple’s intensive strategies and ability to uphold its strong position in the global market has helped in creating a great market value. With a high rate of innovation and prominence, Apple has made considerable high profits by relative high selling prices. This successful situation indicates Apple’s efficiency in using its generic strategy and intensive growth strategies (Kingsnorth, 2016). 

Iphone has maintained cost leadership in the market by complying with the effective market strategy. It has ensured competitiveness and success through its effective technology.  Thus by enhancing the competitive advantage the brand is able to make considerable interest. By lowering the cost of production and management, the company will be able to determine the effectiveness. Some of the practice that helps in gaining cost leadership thus by minimizing the operating cost and lowering the distribution cost. Iphone 7 is known in the market for its unique price model. The prices charged by the company are higher as compared to that of the other brands. Even after charging a high price the brand is gaining revenue (Baggily, 2013).

The concept of differentiation strategy adopted by the company has created competitiveness in the market.  This has been achieved by the company through its design and uniqueness. The Advertisement and promotional strategies adopted by the company is effective. This has enabled the brand in gaining a competitive edge over the other brand. The differentiation strategy has enabled them to gain an added advantage by fetching a considerable share from the market (Fromm and Garton, 2013).

The cost leadership is about organizing resources in an effective way. Iphone is categorized as an industry player for delivering effective services. There is so much value creating positive value for the company.  Positive values are the brand value for the company. It is therefore important for the brand to develop an important example. The brand is easy to use and implement new and effective user updates. This has allowed in gaining a high level of customer satisfaction.  The phone is known for the valuable services and different strategic market scope. In the current market strategic growth, the brand is known for meeting the goals in order to gain a competitive edge (Zarrella, 2009).

The product is known in the market for its focused market strategy. Its unique capabilities have helped in gaining competitive edge in the market. The primary focus on the brand is to gain competitive strength by meeting the needs of the esteem customers. This is to ensure growth of the product in the desired manner. The product has gain competitiveness in the market through its competitive strength. The first Technique used by the company is the target market strategy. This strategy let company divide the customers into a definite segment, and convene the requirements of diverse customers. The primary focus of the brand is to develop effective market strength in a distinguished way. In this way they can focus on earning effective market growth. The users’ are enthusiastic for the launch of new Iphone series. Iphone 7 was launched with new features.  The design is similar to Iphone 6 and 6S. In this way the brand can earn effectiveness in market. The purpose of the brand is to earn effectiveness in the local as well as the international market (Kohler, 2007).

Porter 5 forces are a most recognized tool used to ascertain competitiveness of the product. In order to gain competitiveness it is significant for the brand to recognize the brand standing in the market.  The 5 forces model help in analysing the market standing through: Threat of new entry, supplier power, buyer power, threat of substitution and competitive rivalry. It helps in ascertaining the strengths and weakness of the company. This tool works in an effective way on a long-term basis (Kohler, 2007).

High

There are more players in the industry who are posing threat to them.  Due to this the company is facing excessive struggle in the market. Company differentiate themselves in terms of making profits (Doole and Lowe, 2008).

Iphone has avoided price based competition from the low end market player By generating a superior product to the Android phone.

Low

The uniqueness of supplier product decided the bargaining power. It reduces the power of chip maker by designing its own chips. They buy their own equipment in order to reduce the overall price

Apple has reduced the power of distributors by designing its own retail outlets (Magusara, 2017).

High

The more customers the company has, the lesser is the bargaining power. If the switching cost is high then the buying power will substantially decreases. The company carefully use innovative product flow.

Moderate

In order to succeed Iphone has gained significant market share. It has a strong brand name in the market. There are many brand players in the market but Iphone has its own market strength. This has allowed the brand in meeting up with the needs.  The new entrant will find difficulty in matching beating the supply chain and cost structure.

Low

There are many brands offering the similar services but there is no threat. The product cannot be replaced by any other company.   The brand has an effective market place that has helped them in gaining market position (Viardot, 2004).

Strategic Recommendation & Conclusion

Apple should create a valuable market standing in order to concentrate on developing market strength. The company can attain competitive advantage by gaining cost leadership by minimizing the operating cost and lowering the distribution cost. Iphone 7 is known in the market for its unique pricing model. The prices charged by the company are higher as compared to that of the other brand. For gaining a strategic growth the brand need to develop concrete objectives. They need to slightly reduce its price in order to increase the purchasing power. The other competitive brands are selling the products at the lower price. By selling at a lower price the brand can create a high level of market competition.  Additionally there is a necessity to make changes in the handset as well. Iphone 7 has received criticism at the time of its launch due to fewer changes. In order to remain competitive it is recommended to add effective changes in the product. This will allow the brand to attain a sustainable position in the local as well as the international market.

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