Introduction of Apple
Apple Inc. is a multinational American organization which has its operations in the technology industry. The headquarter of the company is located in Cupertino, California. The organization mainly develops and sells computer software, consumer electronics, online services and many more. The hardware products of the company include, iPhone, iPad, tablet and other computer based devices. The software products on the other hand include, macOS, iOS, iTunes and media player (Apple Leadership., 2018).
The current mission statement that has been designed by Apple is, “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.”. During the time of Steve Jobs however, the mission statement of Apple was “To make a contribution to the world by making tools for the mind that advanced mankind”.
The slogan of Apple from the start of its operations in the technology industry has been “Think different”. The company has been a pioneer of many new products and innovative services that are offered to the consumers (Hill, Jones & Schilling, 2014).
The major marketing approach that has been implemented by Apple is related to the company first and hardware second philosophy. The operating system of the products of Apple is based on this philosophy of the company. The hardware based products of Apple are the major part of the revenues of the organization. However, the apps, interfaces and services that are offered to the users hold much more importance for the company (Wheelen et al., 2017).
Apple offers a wide range of products to its customers which include, the Apple Macintosh which was designed by the founder of the company. The iMac, iPod, iPod Nano, iPhone, iTunes and iPad. The major service that attracts the customers of the organization is the iOS App Store.
SWOT analysis of Apple
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Strengths · High quality advertising capabilities, which creates awareness of the brand and stronger demand for the products. · Extensive and strong distribution channels in the United States. · Vertical integration capabilities. · Reputation and brand awareness. · Sound performance on the financial grounds with strong cash flows. |
Weaknesses · Overdependence on the sales of iPhone. · Weak channels of distribution in some areas of its operations in the world. · Low rate of expenditure on the development and research based capabilities of the company. · Incompatibility with the other operating systems. |
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Opportunities · The market of Internet of Things or IoT is growing and the rate of growth is expected to increase in the years to come. · The gadgets related to health concerns are also introduced in the market. · The market of mobile enterprise app will gain more value in the coming years (Meyer, Neck & Meeks, 2017). |
Threats · The intense competition in the mobile market is creating pressure on the profits of Apple on the long-term basis. · The U.S. dollar has become stronger. · The lawsuits that are being faced by the company have resulted in the damage of the brand. · The company faces a huge risk of data breach in the current environment (Morschett, Schramm-Klein & Zentes, 2015). |
The customers of Apple mainly lie primarily in the consumer, education, government and enterprise market sectors. The organization sells its products with the help of third party sellers or its own stores. The customers of the company mainly lie in the premium group of people who are more concerned about the quality of the products rather its price (Frynas & Mellahi, 2015).
Figure 1 – Source – (Frynas & Mellahi, 2015)
Figure 2 – Source – (Durand, Grant & Madsen, 2017)
The supply chain that is operated by Apple is considered to be one of the most supply based networks of the world. The supply chain of the company is thereby built with the help of various types of organizations who aim at providing their best services to the company. Analog Devices is the supplier of the capacitive touch screens of the company. Glu Mobile supplies the iOS apps and the mobile games to the company. Jabil Circuit manufacturing facilities is an organization based in China and supplies casings of the phones that are manufactured by Apple. Micron Technology, Inc. and the subsidiary companies like Elpida Memory supplies the various modules that are used in the products of Apple. Qualcomm Inc. is a leading company in the world for the manufacture of semiconductors, telecom services and products and the mobile devices. The modems of the Apple devices are supplied by Qualcomm Inc (Durand, Grant & Madsen, 2017).
The industry in which Apple has its operations has been the most competitive in the all the other sectors. The competition of the organization in this industry is increasing on a continuous basis. The competitors of Apple in the sector of computers and laptops has been Dell, Lenovo, Hewlett Packard, Microsoft, Asus and Acer. On the other hand, the smartphones of the company are also provided huge levels of competition from the companies like, Samsung, Sony, Google Pixel, Xiaomi (Trigeorgis & Reuer, 2017).
Figure 3 – Source – (Karadag, 2015)
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Political |
· The high corporate taxation that is faced by the company in various areas of its operations is based on the policies of the government. · The high dependency of the company on low cost manufacturing in China is affected by the government policies of the country. · The costs related to the alternate options of manufacturing is high. · The close association of Apple with China has caused political issues with the other countries like USA and Japan (Karadag, 2015). |
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Economic |
· The increase in the costs related to labour in China has caused the lack of the cost advantage of Apple in the country. · The stagnation that has occurred in the income of the middle class customers have caused pressure on the revenues of Apple. · The strength of the US Dollar can cause changes in the exchange rates of the company in various locations (Hubbard, Rice & Galvin, 2014). |
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Social |
· The areas where the consumer spending is expected to increase in the coming years is Africa where the people are not aware of the Apple products. · The backlash that has occurred on the expensive products by the customers of Apple has been caused in some of the US based consumers. · The ethical concerns that are related to the manufacturing of Apple in China is a concern for the revenues of the company (Simon, Fischbach & Schoder, 2014). |
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Technological |
· The technological capabilities of Apple can be duplicated by the other organizations like Samsung and Google in an effective manner. · The high usage of smartphones has also decreased the demands for smartphones. · The high capabilities of the cyber criminals have also a been a major concern for the products of Apple (Sakas, Vlachos & Nasiopoulos, 2014). |
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Legal |
· The entry of Apple in the financial sector with the product named Apple pay many increase the regulations that are faced by the company. · The plans of Apple to enter the automobile sector can also increase the legal complexities for the company (Slater, 2015). |
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Environmental |
· The largest environmental issue that is being faced by Apple is related to the disposal of the used electronic devices. · The increase in the levels of pollution that is being caused by the production of Apple in China is also an environmental concern for Apple. |
Customer needs and wants
The customers of Apple Inc. are divided into four major segments by the company, which are, America and Latin America, UAE, Asia or Pacific and Africa. The retail stores of the company operating in these areas sell products which cater to the specific needs of the people. The strategy that has been used by Apple is based on vertical product segmentation which has been profitable and the successful for the company. The specific experience of the users is targeted by the company. Apple has been give the position of the topmost organization in terms of providing value to the customers (Guerras-Martín, Madhok & Montoro-Sánchez, 2014). The organization has focussed on the smallest that are related to the offering of products to the customers. The perception of the company related to the products have been enhanced with the help of the operating systems of Apple. The customers of the company are given the feeling that they are an integral part of the operations of Apple. The customers of the company are valued with the help of the outlets of Apple that are formed in the various areas of its operations in the world (Archer-Brown & Kietzmann, 2018).
Apple has to compete with various types of organizations and products in the various categories like, tablets, smartphones, application software and enterprise software. The levels of rivalry in all the product categories are also quite high. Apple has the knowledge that the competition in the market has been the major threat for the operations of the company. The organizations which provide immense competition to Apple in the smartphone category are, Samsung Electronics Co. Ltd., LG Electronics, Google Inc., Oppo Electronics Corp., Vivo, Xiaomi Inc., ZTE Corporation, BlackBerry Limited and Nokia Corporation. The main competitor of Apple in the smartphone category is Samsung and the company has been providing the highest levels of competition with its various products to Apple (Cania, 2014).
Figure 4 – Source – (Kasemsap, 2014)
The analysis of the external environment is related to the uncontrollable factors of the business environment has been done with the help of PESTLE framework. The external factors of the business environment are controlled by the company with the help of the various policies that are formulated by Apple. The company has decided the product portfolio of the particular areas with respect to the choices of the local customers. The economic and the social factors of the environment are taken into consideration by Apple for deciding the prices and the offerings that they provide to the customers. The organization has many competitors in the industry and this has been an external factor that has affected the prices and the products that are offered by Apple (Kasemsap, 2014). The research and development based activities of Apple are conducted with respect to the economic and social conditions of the country in which the company has its operations.
An organization like Apple is quite vulnerable to the factors like the power of suppliers due to the industry in which it operates. The operations of Apple are present in the various sectors of the technology industry. The suppliers of the company in various areas are important for the successful operations of Apple in the different sectors and countries as well. The capital assets of Apple are gained in the facilities of the suppliers. This makes the supply process of Apple lean and convenient. However, the organization also faces major risks due to this pattern which is followed in the different areas of its operations. The review and supervision of these products are important which can otherwise lead to the lack of innovative products in the inventories of the company (Punt & Emory Anderson., 2015). The quantities of the inventory that are held in the facilities of the suppliers need to be sufficient for the usage of the company in an effective manner. The financial difficulties that are faced by the suppliers can also cause issues for Apple and operations in the environment. The overseas suppliers of Apple are also important for the operations of the organization. The quality insurance that is provided by Apple to the premium customer need to be maintained and this can cause losses to the company if the costs are not reimbursed by the suppliers.
Target Market of Apple
The target market of Apple mainly consists of the teenagers who are more keen towards using the iPods for various reasons. The university and the college students are also a major part of the target market of Apple in the various areas of its operations. The business people are also attracted towards the specific products of Apple which include, iPhones, iPads and Macbooks. Another major target market of Apple are the kids and children who are attracted towards the products of the company like, iPods and iPads (Gumeroy et al., 2015).
Figure 5– Source – (Gumeroy et al., 2015)
The current value proposition of Apple is based on positioning the company for certain types of customers who belong to the group of wealthy and innovative people, the people with good jobs and are more concerned about the brand value and quality of the product rather than the high price range. The value of the products and the brand of Apple has increased as it is not possible to get the same type of products which provide the similar levels of user experience as is provided by Apple (Kim, Hoskisson & Lee, 2015).
Figure 6 – Source – (Kim, Hoskisson & Lee, 2015)
The brand positioning strategy that has been implemented by Apple has been quite creative and innovative in natured. The “Think different” strategy of Apple has been used for successful positioning of the brand. Apple has created a position of a lifestyle brand in the smartphone industry. The appeal of the products of the company has been created with the help of the high financial earnings and the creative services. The products of the company have also created a unique position in the minds of the consumers and has changed the ways by which people perceive the company. The positioning strategy of the company has also been implemented in the design of the interface of the operating system of Apple. The stores of the organization have also been designed in a unique manner to provide the best services and experience to the customers who visit the stores on a frequent basis (Ambrosini, Jenkins & Mowbray, 2015).
Figure 7 – Source – Created by author
Product – The product based element of the entire marketing mix of Apple refers to the items that are ultimately provided by the company to the consumers. This element includes the service or item that is provided to the customers. The various products that are offered to the customers of Apple are, Macintosh, iPod, iPhone, iPad, iwatch, Apple TV, services and software. The products of the company are well-designed and are developed after extensive research. The company was the first to introduce the multi-touch smartphones in the mobile market. iPad was launched immediately after the entry of iPhone in the market and was an instant hit among the loyal customers of the company all over the world. The software that has been designed by Apple has proved to be a huge competitive advantage of the company. The efficient and unique operating system has been able to provide a different position to Apple in the industry (Ramamurti, 2016).
Figure 8 – Source – (Tassabehji & Isherwood, 2014)
Place – The place related element of the marketing mix of Apple is based on the areas where the products and the services of the company are provided to the customers. The distribution based channels of the organization are also a part of the place element of Apple. The place of the marketing mix are the business premises like the retail stores or the online websites of Apple. The accessibility of the places is related to the choices and the options of the business organization. The trade partners of Apple have also provided huge opportunities to the company by taking care of its distribution based activities all over the world. The online platform has also provided chances of increasing its sales in the market. The layouts of the stores and the staff of Apple have provided unique opportunities to Apple to provide the best services to its customers (Tassabehji & Isherwood, 2014).
Price – This element refers to the part of the marketing mix which mainly refers to the amount of the money that are paid by the customers to obtain the products offered by the company. The business thereby considers the value of the services or the items that are provided to the customers. The driving forces, like the pricing of the competitors are related to the formation of the pricing strategy (Buckley, 2016).
Promotion – This element of the marketing mix is based on the activities that are related to the communication of the merits and the advantages that are provided to the customers. The promotional activities are not just related to the advertising of the products of the organization, the public relations based activities and the selling related efforts also belong to the promotional element. Apple is known in the industry for its elegant style of promotion and the main focus of the company is to differentiate the products from the others in the market. The company has a strong belief on the communication based capabilities and levels. Apple believes in showing the world the activities that are performed by the company (Tassabehji & Isherwood, 2014).
People – The people based element of marketing mix mainly pertains to the people with whom the company interacts with the help of the service or product, like the employees who contribute to the sales of the products, the consumers and the PR team. The business organizations thereby need to consider the ways by which different employees can affect the marketing related efforts of the company and the responses provided to the consumers (Buckley, 2016).
Process – The process related element of the marketing mix is based on the ways by which the products and the services of Apple are manufactured and further delivered to the customers. The steps that are taken by the organization to create the services or the products and provide them to the customers is a major part of the process element. The business organization can consider the process that it wishes to implement for the purpose of creating the services or products.
Physical evidence – The physical evidence based element of the business is based on the ways by which Apple wishes to shape the service or the products for the consumers of the organization (Ambrosini, Jenkins & Mowbray, 2015).
References
Ambrosini, V., Jenkins, M., & Mowbray, N. (Eds.). (2015). Advanced Strategic Management: A Multi-Perspective Approach. Palgrave Macmillan.
Apple Leadership. (2018). Retrieved from https://www.apple.com/leadership/
Archer-Brown, C., & Kietzmann, J. (2018). Strategic knowledge management and enterprise social media. Journal of Knowledge Management.
Buckley, P. J. (2016). International strategic management and government policy. Springer.
Cania, L. (2014). The impact of strategic human resource management on organizational performance. Economia. Seria Management, 17(2), 373-383.
Durand, R., Grant, R. M., & Madsen, T. L. (2017). The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), 4-16.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.
Guerras-Martín, L. Á., Madhok, A., & Montoro-Sánchez, Á. (2014). The evolution of strategic management research: Recent trends and current directions. BRQ Business Research Quarterly, 17(2), 69-76.
Gumerov, A. V., Kharisova, R. R., Pavlova, A. V., Litvin, I. Y., Nabiullina, K. R., Schepkina, N. K., & Sabirov, I. T. (2015). Improving strategic management of the business entities. Review of European Studies, 7(1), 23.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.
Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A strategic management approach. Emerging Markets Journal, 5(1), 26.
Kasemsap, K. (2014). Strategic innovation management: An integrative framework and causal model of knowledge management, strategic orientation, organizational innovation, and organizational performance. In Strategic approaches for human capital management and development in a turbulent economy (pp. 102-116). IGI Global.
Kim, H., Hoskisson, R. E., & Lee, S. H. (2015). Why strategic factor markets matter:“New” multinationals’ geographic diversification and firm profitability. Strategic Management Journal, 36(4), 518-536.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship?strategic management interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
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Sakas, D., Vlachos, D., & Nasiopoulos, D. (2014). Modelling strategic management for the development of competitive advantage, based on technology. Journal of Systems and Information Technology, 16(3), 187-209.
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