The researcher intends to examine the strategic perspectives that provide a glance into the decision-making and operations of Apple Inc. Apple Inc. Numerous critical matters can compete for attention in business, which may not be easy to see. It is also difficult to have everyone in the team pulling in the same direction, with the same focus on same true elements. There are critical factors that must operate so that a business may achieve its mission and goals. Identifying the success factors can lead to a common pint of reference to assist in directing measures for the success of a business. A company must be committed and continue to produce products of high quality over quantity to remain successful. This may contribute to innovation and creativity to create designs and products that are simpler, attractive and more reliable than its competitors.
The study is guided by the following questions;
- How does Apple Inc. manage to create products that outperform competitors?
- How does Apple Inc. create a successful booming retail business than other retailers?
- How does Apple Inc. arrive at publicly available technologies that turn into worldwide-recognized phenomenon?
- How does Apple Inc. obtain high financial results than other companies at the same level?
A successful company has increased earnings growth and bigger margins than other companies do at the same level.
The following objectives guides this research in finding the right information required to arrive at conclusions, and to make appropriate recommendations. Thus, this study seeks:
- To identify and understand the culture of Apple
- To distinguish Apple's products and examine the segmentation of the user
- To analyze critically how Apple achieved competitive advantage through innovation compared to its rivalry.
This chapter will review relevant literature, focusing on the success of Apple business strategy. The company has been successful in business by reaping huge revenues (Hirst and Thompson, pg 56). The operating profit has been high; for instance, in 2007, the company’s net profit was $3.496 billion. This was an increase of 75.8% improvement from 2006. Recently, the company made a revolutionary launch of the globally recognized ipad, in 2007. The launch was followed by great sales, which is an achievement of Apple’s marketing strategy, described as unique. The company has been successful over the years, steadily gaining competitive advantage in the digital market, translated into customer loyalty (Hoskisson, pg 44). According to Ireland, Hoskinsson and Hitt (2008, pg 77) the most recognized of this is their long-running competition with Microsoft and its operating system for personal computers. Thus, these efforts and commitment to prosper are a result of a significant cost in the previous days of the history of the company. The company's commitment for over thirty years now has resulted into the past six years of excellence and supremacy growth across all of its product lines. Apple Company has its own formula for success. For example, the leaders, founders, the entire working staff, and its clients continue or have the culture of thinking different. Its sustainable success and competitive benefit have led to it becoming the leading and the most valued brand in the whole world. For such a young and growing company, it is an exciting vision to consider where Apple Inc. could be in the coming thirty years. Today, the company continues to be very watchful in protecting its technology, innovations, and creativity.
Many people believe that Apple is a very profitable company (Muhlbacher, Leihs, & Dahringer, pg. 89). Recently, the company announced that, during its first quarter, it generated $ 46.33 billion in revenue (Patro & Wald, pg. 1677). This figure almost doubled the sales it posted in 2010. Moreover, it profits recorded more than double recorded in 2010. Thus, Apple managed to generate much cash, almost $ 100 billion. The success of Apple is an achievement different from its sad state of affairs experienced in 1990’s. During the period, Steve Jobs had to get involved to make things well. Thus, the main issue is to understand how Apple has made such profitability. The CEO also created a more flattened organizational structure, which could go through the managerial layers to address employee needs. One of the most visible changes was the expansion of the company into its new product lines within IT industry.
The incorporation of the company was on January 1977 with the release of the Apple 1. Apple Inc. together with its supplementary deals with blueprints invents and sells mobile and media appliances, as well as, PCs and portable digital music player. In 2001, The Company managed to launch the iPod, which completely changed the music industry. Moreover, the introduction of the iTunes that allowed the clients to upload songs directly from the CD. Apple managed to introduce the iTunes store, which could allow users to download millions of songs online. The company focuses on producing products and services such as iPhone, Ipad, Mac, IPod, Apple TV, a portfolio of customer and professional software application among other various accessory, service and support contributions (Cantrell 2007, p. 25). The company also offers ITunes store, Apple Store, iBookstore, and Mac App Store. According to Byars (1991, p.45), Apple Inc. markets its goods to the entire world through its retail stores, online stores, and direct trades forces. Moreover, it also markets its products and services through wholesalers, retailers, and resellers.
According to Bach (2007, p. 78), Apple Inc. is among top successful companies in the entire world today. Nevertheless, this was not the case for the company in the previous years, since, it had to undergo a considerable number of challenges and mistakes and learn from them. However, the company recognized the mistakes it made previously, in order for them to achieve their goals and objectives, they had to think clearly and in a different manner. For instance, Steve Jobs came back to the company with different ideas and concepts, thus changing the company for the better. What enabled the Apple to move from almost bankrupt, to a two hundred billion-dollar company was when Steve instilled a design culture into Apple.
The economic sector of Apple Corporation is not badly off because money supply and banks are readily available for the company in its international plans; interest rates are low for the company comparing with other companies dealing with the same business. Socially, with the ever-changing world in terms of lifestyle, population, education among others, Apple Inc. Company ensures that its products and services motivate people from various cultures and age groups to use high-quality products from its company. Technology is quite essential for the competitive benefit of the Apple Inc. It is the main driving force for globalization (Johnson & Scholes 1993, p. 93). Technology permits the making of the Apple Inc. products and services more cheaply and to a high standard of quality. Through technology, customers and business get more innovative products and services such as new-generation mobile phones among others. Furthermore, the life cycle of Apple products is extremely small thus making revenues to rely mostly on the launch of new products and services. The Apple Inc. also shows a weak appearance in the presence, in any sector. Nevertheless, the Apple Company has various opportunities such as adding in virus, and Apple can realize worms on personal computers in order for the antivirus solution. Moreover, they have an increase in the online sales of computers and download of music and Mp3 players are on high demand. Unfortunately, the company experiences some threats such as facing strong competition from Dell, HP, and Sony (Owen 2011, p.23). A considerable number of companies are not viewing Apple as compatible with their software. Furthermore, Apple software, cell phone and hardware are extremely expensive as compared to other competitors such as Dell.
Currently, Apple accounts for the greatest market capitalization in the world. However, the reasons behind its success still remain unclear. This is an indication that apple’s products do not have limitations in their own ways. There are certain major reasons that drive Apple’s success. These include apple’s strong suite. The following are the ways in which Apple has always achieved this level of success.
The word ecosystem lock-in does not imply Application store. However it means being leader in the market of electronic devices contrary to ensuring promotion of platform compatibility. It has been able to combine the functionality of Apple’s products with those of other products. However, this has made apple’s products both advantageous and disadvantageous to use as a result of lock-in or alienation with people that have obtained the products for the first time. The use of lock-in strategy has been applied in the manufacture of Mac, the iPod, the iPhone. This has ensured that consumers continue to buy apple products to ensure their lives are improved.
Furthermore, Apple products users are always proud of the platform of their products. A survey indicates that most users of Apple’s products are so loyal to these products that their loyalty is compared with religious following. This has ensured that the products produced by Apple Company are always relied on. The following started as long as the invention of the iPhone when the corporation was regarded as a small player bullied by big companies such as the Microsoft. Despite being not recommended as a little player in electronic market, it has maintained high turnover and popularity in comparison with other electronic devices produced by other leaders in the industry such as Microsoft.
In addition, Apples designers ensured that extensive research was carried out by initially building an infinite loop campus. This was accomplished by construction of research and development buildings in the company and increasing the amount of workforce as the level of research and development intensified.
Furthermore, more innovative activities have been intensified by improving on the current products line. In the past the years, there have been a total of five innovations. One of these is the iPod. This is an MP3 player that brought considerable distraction in the beginning of the last decade. Furthermore, the invention of the iTunes and the iphone brought considerable following of the electronic devices made by Apple incorporation. The iphone for instance was referred to as ‘Jesus Phone’ by its followers. This is a type of phone that has never been surpassed or replicated by its competitors. Other significant improvements in the innovation activities include the invention of the App Exchange and the App Store.
In addition, the advertising of the Apple’s products is considered one of the most pleasing to the potential customers. In addition to advertising, products differentiation has been intensified to ensure consumers are convinced to obtain the utilities from the use of these products. The most significant ad campaigns that have been conducted by Apple include Super Bowl Commercial of 1984, Think different of 1990s and iPod people of 2000’s. In the ad of 2000’s, the iPod of portable music player has been has been displayed as a contribution to modern art. The current advertising efforts are focused on particular events and events such as Apple Expo.
In the process of marketing its products to various parts of the world, Apple has been able to make consumers have the belief that the information obtained from apple’s advertisements are the absolute truth.
The process of advertisement has always been done by launching videos that project generation-changing products. Terms are used during campaigns that make consumers believe in products that were as similar as the previous products. For instance during the launch of iPhone 4s video, terms such as ‘ground breaking’ and ‘revolutionary’ would be used to describe products that do not have any significant difference to existing products.
Furthermore, apple manages to propagate the idea that its produces more unique products. This makes the users become subjective to these products despite the fact that very operating system has its advantages and disadvantages. The retention of the platforms of iPhone and android use is an indication that users always go according to experience that is familiar to them irrespective of the level of competition.
The Apple’s company has had its retail outlets stormed by customers each time a new product has been advertised for distribution. This is considered one of the factors that have contributed to the success of Apple Company. There was also the option of moving Apple’s products and advertisements online. However, long queues outside its store were an indication that the products were actually desirable. This can also be attributed to the curiosity of human nature about something that cannot be obtained immediately.
`In countries such as India where most people are not fascinated by apple’s products, a similar approach is used. Due to scarcity of stores for Apple’s products in India, and huge lines cannot be created as a result of popularity of the product shipments are delayed and limited to ensure sale of the products, an act that has not been seen firsthand.
Generally, Apple positions itself at the furthest end of the market and this strategy led to its being defeated by Windows in the PC battle. However, for it to ensure it remains in the mainstream, its prices had to be set to a level that is satisfying to the masses. The iPod was sold at a relatively low value, resulting into price being a less major factor in determining the types of consumers that would obtain it. The growth and improvement of the iPhone has also enabled Apple obtain substantial amounts of subsidies from carriers with the promise of benefiting from data usage revenue. Due to this comparatively low price, demands for Apple products have increased while margins have remained high. With the consideration that the iPhone is the major revenue generating product for Apple Inc, it is considered that this is one of the factors that contributed to this success.
The success of the apple company can be traced from its wide range of products that the company produces every. In every product there are special features that the company offers to the consumers which makes the more interested and attached to the company. As stated earlier, the company is has managed to establish a strong consumer loyalty, thus maintaining their supposed to the company. This is a step that most of the businesses yarn to strict since it ensures that the company products consistently have consumers. The company ensures that the products are consistent with the contemporary demands, hence the functions as a solution to these demands. Not only are these products unique, but they also present an added value of innovation and creativity in the field of electronics (Zachary & Stephen 2011).
The Mac series of product have been improving day in day out replacing the old once. For instance, in 2006, several Mac products were introduced in the market proofing to be better than the previous once. The Mac Pro introduction ended the error of the Power Macintosh, MacBook Pro introduce the same year edged out the Power MacBook while MacBook Air offer a portable electronic that was highly convenient among its users (Cantrell 2007). The Mac products have gained popularity worldwide due to their advanced speed and applicability in business field.
The iPad offers the consumers yet another opportunity for fully of innovation and creativity. The “tablet” electronic device offers multi-touch interaction operation with multimedia designs and features. The series of the iPad ensures that the consumer gets the new version immediately it is released. iPad has increasingly spread into the market due to the fact that is found to be a link between a phone and a computer. The adverse features and operation that can be completed using an iPad earned the Apple company credit in the business world.
Another product that is related to the iPad yet different is the iPod and the iPhone. iPod music player was introduced in 2001, and it gained an applause among the youths. Currently, the product is found in four different brands namely, Shuffle, Nano, Classic and Touch with increasing advancement respectively. The iPhone is a combination of feature of smart phone and those of the iPod. Like the other products, the iPhone has improved and advanced to the currently released model iPhone 4S. The features of this electronic device are beyond expectations that made it to be the most marketed phone on the planet on the initial days of introduction to the market (Nick 2011).
Moreover, the company offers the customers with a unique Apple TV. In2008, the company released a TV that allowed purchasing of media directly. It is also possible to download music and other videos from the TV. Other than the hardware products the company also produces software that is compatible to a variety of products. These unique and frequently updated products have been the reason behind the improvement of the company. The ability to add and improve previous products to new once has ensured that customers are always motivated to purchasing the new products immediately they feature in the market. This boosts it product sales year after year. The replacement of the old technology is a strategy that has been found to be a competitive topic and Apple Inc has the upper hand it this opportunity (Zachary & Stephen 2011).