The next stage of the marketing audit is to consider the evaluation of the market of the organization. The organization has been selected for the evaluation is Apple Inc, an American multinational technology company with headquarter in Cupertino, California. The company develops and sell the computer software, consumer electronics, and online services. The hardware products that are offered by the company include an iPad tablet computer, Mac personal company, Apple watch, TV, digital media player, HomePod and many other items.
The report is based on the market analysis of the Apple Company and this analysis is conducted to evaluate and analyze the opportunities and threats of a company. To analysis the opportunity and threats the company can make use of the different framework which has been discussed in the report.
The industry market analysis includes the description of the current trends which include the growth, profitability and the macro-environment analysis.
Apple Inc. growth is transforming from past few years. Though, this is the fact that the growth was slow until the year 2010. After 2010, the company started introducing new versions of their products which helped the company to gain the market. Due to this, the company was able to generate more profit in 2011 and 2012. This is clear from the graph below which shows the Apple Revenue and Net Income.
(Source: Wildstrom, 2013)
After 2012, the company achieved the success and growth along with the profitability. Apple sold 50.46 million of its iconic iPhones in the first 3 months in 2017 which helped the company in generating $ 52.9 billion revenue at that time. The company is able to achieve the 4.5% more profit than the previous year. The company is selling fewer iPhone and yet yielding more revenue per device (Popper, 2017). The strategy of the company is to sell the products at high prices as this is the best way to achieve the goals for the revenue (Maurer, 2017).
The macro environment includes the external environment factors that influence the decisions or affects the working of the Apple. The pestle analysis is a framework that is used by the company to analyze the external factors (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014).
(Source: Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014)
The company accumulated a large amount of cash in America. The company was having $ 34.7 billion in a bank in 2015, June due to which the company paid high corporate taxation in the US. The company is depended on the Chinese manufacturing for the lower cost of products. Political unrest in China can disrupt manufacturing of the products or costs (Pestle Analysis, 2015).
The strong U.S dollar leads to fluctuation in the exchange rate which affects the decisions of the company and influences their decisions. Due to the U.S dollar, the exchange rate increase which makes it more costly for the company to perform the activity in the key markets (China and Europe). Apart from it, the increased labor cost in China can affect the cost advantage of the company for some of the specific products. Stagnation middle-class income in developed countries could collapse the market for the customers (Pestle Analysis, 2015).
The company is dealing with some of the ethical concerns in China that could affect the company’s appeal for their product in the socially-conscious consumer market. The company noticed that the biggest growth in the consumer spending is going to be in Africa in the coming years. Africa is a place where most of the people are not aware of the range of products offered by Apple. This might affect the growth and opportunity strategies of the company as the company will generate the awareness about the products and services in the emerging markets globally.
The use of the advanced technology is growing and leads to the cybercriminals that make the Apple system less secure. Apple is reputed in the market for high levels of security and safety. Apart from this, the competitors of the company have a strong ability to duplicate the products and services provided by the company. For instance, Google took a year to introduce a payment app; Android app with the similar capabilities of Apple Pay. This shows that the company has to bring the changes in strategy and have to make use of the advanced technology to gain the competitive advantage again in the market (Khan, Alam & Alam, 2015).
The company is having the opportunity in the automobile manufacturing even the company is planning to enter into a highly-regulated sector. Though, to enter into automobile industry the company have to face the regulations, insurance and litigation cost. So the company has to fulfill all the legal obligations before entering into any market. Apple is also depended on the diverse variety of products that are covered by the intellectual property laws which include software and music. This leaves the company with highly vulnerable to both piracy and litigations.
One of the biggest environmental issues faced by the apple company includes the disposal of the used and nonworking electronic devices. The company has to pay the high amount if a company wants to dispose of the devices that contain the lithium batteries. The manufacturing factories of Apple in China is generating the pollution and other environmental side effects due to this the company might have to face the regulations and have to pay high manufacturing cost in the near future (Khan, Alam & Alam, 2015).
Apple segmentation, targeting, and positioning signify the essence of its marketing efforts. Segmentation includes dividing a population into groups according to certain characteristics and the targeting include selecting specific groups or segments to which the company is looking to offer the products or willing to sell the products mainly (Weinstein, & Cahill, 2014). The targeted customer segment consists of quality and performance of technology products and appreciating design. Positioning reflects the position of the company in the mind of the customers.
Demographic segmentation- The demographic segment include the people of different age, gender, life-cycle stage, income and occupational. The demand for the products provided by the company is continuously increasing with the increase in the living standard of the people. The company targets the people belongs to the high-income group having the age group of 20-45.
Psychographic segmentation- This segment includes the traits, lifestyle, and social class of the people. The company generally targets the people who have the preference of the social class and believes in maintaining the lifestyle (Hollensen, 2015).
Behavioural segmentation- The behavioral segment shows the perception of the customer for the products that are offered by the company. It includes the degree of loyalty, benefits sought, personality and user status. The company targets the people who have the high degree of loyalty and user status (Brian, 2015).
Primary target market- Apple targets the segment on the basis of primary and secondary. The primary target segment is that segment to which the company offers their products on the primary basis as they know that they can give their best chance. Apple targets all the segments and mainly focus on the people belongs to the age group of 20-45 (Dudovkisy, 2017). The company believes in targeting the people who are loyal to the company and have the capacity to pay the high amount. The company targets both male and female having the occupation of professional managers and executive. These are the primary targets of the company because they are the one who can easily buy the Apple products at high prices. Along with that the company also targets the people who have believes in maintaining the lifestyle and thinks that Apple products represent the social status symbol.
Secondary target market- The secondary target segment is that segment which is important for the company on the secondary basis (Winston & Weinstein, 2016). The product is also available for the students but company treats students as their secondary target because there are very fewer parents who allow their children to buy expensive products of Apple. The social class is another element to which the company targets on the secondary basis. A social class consists of the middle and upper classes of people, most of the middle and upper-class people buy products offered by the Apple Company as they believe this adds to their status in society.
The involvement of the primary segment is essential for Apple Inc. This involvement of the people might influence the working and decision making of a company which might get clear from the below discussed few points.
The prices of the products can create the direct impact on the sales of the company. The company keeps the high prices of the product because they provide high quality and this is the reason company targets people having the high-income slabs. Though, the Apple is trying to understand the market and peoples demand in different countries. Due to this, the company is bringing the fluctuations in the prices according to the places.
The company is establishing new stores so that they can meet the demand of the customers for the service centers and apple stores. Most of the loyal customer faces the problem related to the service stores and Apple stores due to which the company is trying to increase the number of stores that helps the company in providing the accessibility keeping the preference of customers in mind (Ross, Beath & Sebastian, 2017).
The demand for the products is rapidly increasing due to which the company took a step to provide the products through online mode in which the company performed the ties ups with different merchants. Now the products of the company are available on most of the e-commerce websites including flip kart, Amazon, snap deal and many others. This fulfills the demand of the primary customers as now they can book the products through online.
Apple targets all the segments and these segments include different people having a different preference for the products and services. In the present situation, Apple provides the wide range of products and services and this was possible because of the demand of the customers for the wide range of products and services. Still, the company is planning to move the focus towards the automobile industry because the demand for the automobile related products by the targeted customers is increasing (Ross, Beath & Sebastian, 2017).
These points clearly show that the primarily targeted customers guide a way for the development and growth of the business along with that these customers affect or influence the decision making of the company.
The competitors of the company are increasing with the growth in the industry. The company is facing strong competition from different companies operating in diverse sectors of consumer electronic goods. The main competitors in the desktop and laptop computers industry are Dell, HP, and Sony, out of these Dell give tough competition to Apple (Investopedia, 2017). The smartphone industry is dominated by Samsung. So, the main competitors of Apple are Dell and Samsung who can give the tough competition to Apple Inc.
(Source: Jurevicius, 2017)
Strengths
Weaknesses
Strengths
Weaknesses
Strengths
Weaknesses
The positioning of the company refers to the place that a brand occupies in the mind of the customers and how the company is distinguished from products of competitors (Slack, 2015). The positioning of the apple company is clear from the images given below. The first image shows the positioning of the company in the laptop’s and tablets and the second image shows the positioning of the company in smartphones.
(Source: Gruyer, Belaroussi and Revilloud, 2016)
(Source: Gruyer, Belaroussi and Revilloud, 2016)
This is clear from the images that the company’s position lies in the quadrant that reflects the high prices and quality. In both the maps, the company acquires the same position. Hence, it shows that range of products doesn’t matter, the company believes in providing the high-quality products at high prices.
Conclusion
The report throws light on the analysis or evaluation of the opportunity and threats of the Apple Inc. Apple is one of the leading and well-known companies across the world. Apple has an opportunity to provide the products in the places (such as Africa) where development and growth are going to take place. The company is facing cut-throat competition from other companies. So, it’s high time for the company to make the strategies to gain the market shares. Apple should try to remove the weakness and should make use of the technology advancement to bring the new products or to bring the major changes in the existing products. The company is trying to keep the moderate prices based on the different countries. This is the only way through which the company can show that they are able to understand their customers and are taking steps according to their customer’s preferences. This will not only enhance the new and potential customers for the company but also open the gates for the opportunity.
References
Bhasin, H. (2017). SWOT analysis of DELL. Viewed on 7th January 2018. https://www.marketing91.com/swot-analysis-of-dell/
Brian, J. (2015). Segmentation Marketing: A Case Study on Performance Solutions Group, LLC.
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Dudovkisy, J. (2017). Apple Segmentation, Targeting and Positioning. Viewed on 7th January 2018. https://research-methodology.net/apple-segmentation-targeting-and-positioning/
Dudovkisy, J. (2017). Apple SWOT Analysis. Viewed on 7th January 2018. https://research-methodology.net/apple-swot-analysis/
Gruyer, D., Belaroussi, R., & Revilloud, M. (2016). Accurate lateral positioning from map data and road marking detection. Expert Systems with Applications. 43, pp.1-8.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Investopedia. (2017). Who are Apple’s (AAPL) Main Competitors in the Tech Industry? (HPQ). Viewed on 7th January 2018. https://www.investopedia.com/ask/answers/120314/who-are-apples-aapl-main-competitors.asp
Jurevicius, O. (2017). Full Analysis of Apple Inc. Competitors. Viewed on 7th January 2018. https://appleknowledge.xyz/apple-competitors.html
Khan, U. A., Alam, M. N., & Alam, S. (2015). A Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), 955-961.
Maurer, B. (2017). Apple’s Growth May Surprise You. Viewed on 7th January 2018. https://seekingalpha.com/article/4111410-apples-growth-may-surprise
Pestle Analysis. (2015). Apple Inc. PESTLE Analysis. Viewed on 7th January 2018. https://pestleanalysis.com/apple-pestle-analysis/
Pestle Analysis. (2015). SWOT analysis of Samsung. Viewed on 7th January 2018. https://pestleanalysis.com/swot-analysis-of-samsung/
Popper, B. (2017). Apple’s earnings show modest growth, but iPhone sales are flat. Viewed on 7th January 2018. https://www.theverge.com/2017/5/2/15519540/apple-q2-second-quarter-2017-earnings
Ross, J. W., Beath, C. M., & Sebastian, I. M. (2017). How to Develop a Great Digital Strategy. MIT Sloan Management Review, 58(2), 7.
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.
Weinstein, A., & Cahill, D. J. (2014). Lifestyle market segmentation. Routledge.
Wildstrom, S. (2013). Apple and the Burden of Bigness. Viewed on 7th January 2018. https://techpinions.com/apple-and-the-burden-of-bigness/14052
Winston, W., & Weinstein, A. (2016). Defining your market: winning strategies for high-tech, industrial, and service firms. Routledge.
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