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Course Name – B.A. (Vocational) Small and Medium Enterprise Subject Name- Marketing Strategy & Relationship Marketing Semester- VI Class Time- 11.30 AM Teacher’s Name- Navodita Chaudhary
Case Study And Analysis On Apple Inc
Apple Inc. (previously Apple Computer, Inc) is a multinational corporation that is established on April 1, 1976 in California and incorporated on January 3, 1977. The company for 30 years was named as Apple Computer, Inc. but it changed its name to Apple Inc. on January 9, 2007 as it wanted to expand to the consumer electronics market and do not only stay in the computer market. Furthermore, the company for the year 2010 employs 46,600 full – time employees and 2800 temporary employees and contractors. Apple designs, manufactures and markets a range of computer software, hardware products and personal computers. Some of its products are the following: Products Hardware Products Application Software Operation System Software Displays & Peripheral Products Marketing Tools SWOT Analysis The SWOT analysis is used inside a company in order to discover its strengths, its weaknesses, its opportunities and its threats. The SWOT analysis is a strategic marketing planning tool that is usually used to help each company understand and analyse its strengths and weaknesses, identify the threats of other businesses and the various opportunities in the market share. The SWOT analysis is divided in two sectors. The strengths and the weaknesses refer to the company and its products as internal factors, while the threats and the opportunities refer to the external factors of the company in which it has no control. In SWOT analysis it is usual to list the strengths, the weaknesses, the threats and the opportunities in the same page. This is done by dividing the page into four squares and entering strengths and weaknesses (internal factors) in the top two squares and opportunities and threats (external factors) in the button square. The SWOT analysis should be brief and interesting and should not exceed more than four or five pages.
STRENGHTS
WEAKNESSES
OPPORTUNITIES
THREATS
The number of individual SWOT analysis will defer from company to company. The most common levels that SWOT should be undertaken are the following: For the organisation as a whole For every major Competitor For every major product or service For every major market share The SWOT analysis is used for business planning, strategic planning, competitor evaluation, etc. This tool is very useful for each company to understand and make decisions in all kind of situations. A good example of Apple to explore their strengths, opportunities, weaknesses and threats is to develop a Swot analysis for the company. The Swot analysis for company is showed below: STRENGHTS: Apple is producing innovative, quality and easy to use products. The innovation made Apple such a powerful company. This is obvious if we look its past: 1970- 2001 - Apple was making changes only to its computers (face-lift), end of 2001-Apple introduced iPod, June 2008- Apple introduced the cinema displays, March 2007- Apple developed Apple TV, June 2007- Apple entered the Mobile Market with iPhone, 2010- Apple introduced iPad. Every year Apple spent around $1.5 billion for the development of new products in order to keep the existing customers satisfied and recruit more new ones. [3] Apple has a very powerful brand loyalty. As it is one of the most profitable and healthy companies in the World, it managed to adopt a large amount of loyal customers. This happened because Apple periodically, provides updates to all its application and operating systems not only for the Mac computers but for Iphone, Ipad etc. With this way Apple keep the customers satisfied and willing to buy its new products. The key success for Apple is its dedicated personnel and more specifically the CEO team. This team includes all the executive team( Steve Jobs, Andrea Jung, Arthur D. Levinson, Millard S. Drexler) and the employees in technical, marketing and staff positions. Steve Jobs, the Chief Executive Officer and Co-founder of Apple Inc. plays a vital role inside the company. During his absence (1985-1996) Apple experienced many financial problems. However, when Steve Jobs came back to the company in 1996, he focused on developing new ideas and in 2001 he introduced iPod which is making a lot of profit to the company. Therefore, Steve Jobs is definitely a strength for Apple.
Apple made a contract with Intel to install their processors to Apple computers so as to prompt business to replace Pc’s with iMacs. They did this in order for their business applications to become stable and reliable. The first example of replacing their computers with iMac is in Japan. Aozona Bank Ltd replaced their computers with iMacs. Therefore, Apple has to find a way to establish themselves as a major ‘player’ in business applications. Apple have to create a strategy that will expand its product line to other products that is going to be less expensive. THREATS The biggest threat that all the IT companies face is the high level of competition in the technology markets. The most common feature is the price competition. The competitors reduce their selling prices and sometimes adopt the features of Apple products in order to attract more customers. For example, Apple has only recently entered the Mobile Communications market, so many of its competitors have greater experience and more resources, so they could provide their products in a lower price with little or even no profit at all.for the company. Therefore if Apple stops investing a lot of money to research and development, it will lose its competitive position in the market. Furthermore, in these markets the product Life Cycle of all the products and services is extremely short e.g. for mobiles phone their lifecycle is around 6 months. Therefore, each company has to introduce new products and services. In 2005 Apple won a legal case about a blog that pre-introduced new Apple products. With this trial, Apple force Bloggers to name the source of their information because the company suspected that the information had leaked from its employees. Therefore, Apple is always vulnerable to leaks from various employees. This information may conclude to the competitors, so Apple will lose its competiveness. As Apple is an IT company, it relies mostly in economic factors to make profit. Therefore, the economic crisis that exists worldwide is a major threat to all companies but mostly to technological companies. This happens as with the unemployment and the decrease of salaries; most customers consider the market of a technological product unnecessary e.g. an iPhone, so the sales of the company are going down. Customers will download music from another free online program without having to pay anything in iTunes. This will have an impact on iTunes and on the profit of Apple. Ansoff Matrix Ansoff Matrix is a well known marketing tool which was first published in Harvard Business Review. Many companies nowadays use it in order to help them decide for the development of their product and the market share. The matrix has 2 dimensions. The first one consists of existing and new products while the second consist of existing and new markets. Inside the matrix there are four main categories with suggested grown strategies for each one in order to help the company set the correct direction of their business strategy. The four categories are: Market Penetration in which the company enter into an existing market with existing products or services.
Product Development in which the company introduce new products/services into existing customers. Market Development which the company tries to attract new customers with existing products or services Diversification occurs when the company tries to capture new customers with completely new products/services. An example of the Ansoff matrix is the following: Apple could use each of these four categories in order to manage its existing products and develop new products/ services Market Penetration: In this strategy, Apple could aim on selling the existing products, e.g. Mac Computers to the existing markets. More specifically, Apple: Should try to increase the market share of the existing product. This could be achieved by using the appropriate marketing tools( lower prices, sales promotion, advertising) in order to attract new customers to buy its products. For example, more advertisement or reduced prices on Mac Computers could persuade new customers that prefer Windows operations system to change to Macintosh. This is more highly to be achieved in the grown markets because in there the product is at its rising stage. In order to increase its sales and its profit, could persuade existing customers to buy more products. This can be done during an economic grown where customers are willing to spent more money in technological items. For example, Apple could use more advertisement or sales promotion to persuade customers to buy an iPhone for all the members of their family. Or Apple could persuade existing iPod customers to buy also a Mac computer. Product Development In this strategic option, Apple could create new products for the existing customers. With them, Apple has already a strong relationship, so it knows their need and specifications for creating a new product. Therefore, the company is innovating its products in order to keep satisfied their customers, beat its competitors and keep its leadership role in the market. An example of this strategy is the iPod. The first iPod that Apple introduced was in October
- This was the first entertainment tool from Apple for people to use in order to hear all the time their favourite music. However it had a black-white screen and only 5 GB capacity for songs. Therefore, in 2003 Apple introduced an iPod with the maximum of 40 GB capacity. In 2004 it introduced an iPod with a colour screen and 60 GB capacity. Nowadays, Apple has created an iPod that has a 3.5-inch (diagonal) widescreen Multi-Touch display, Wifi and many other features. These changes belong to the product development as Apple innovate its products to attract the existing customers and replace their product with the new. Another example is that Apple every year innovate the iPhone. The first iPhone was released in 2007. The next year Apple introduced iPhone 3G. In 2009 Apple announce the iPhone
Station 3, in order to enter to the market of gaming. If it enters this area, it will make a lot of profit because young people spent a lot of money on gaming Market Penetration Usage of appropriate Marketing Tools(advertising, lower prices, etc) Persuade existing customers to buy more products. Product Development Introduction of iPod, the first entertainment tool from Apple Innovation of iPhone each year Market Development Apple expended Worldwide Diversification Introduction of Ipad Introduction of iPhone Introduction of iPod Apple could create a gaming console
