Apple Business Strategy

Executive Summary:

Apple Inc. previously Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino, California that generates and retails consumer electronics, computer software, and personal computers. A SWOT analysis expresses at strengthens weaknesses, opportunities, and threats factors of Apple, Inc. By expressive these factors about Apple, Inc. will be significant to their company because it takes a look at their competitor. A strategy and product will also be planned that will take benefit of Apple, Inc. susceptibilities which will rise this company’s market share.

Apple Inc. is devoted to bringing the best personal computing experience to students, educators, inspired professionals and consumers around the world through advanced hardware, software and internet offerings. The mission statement deals that the organization is focused on quality and innovation to spread its target customers. In its mission statement Apple goals to provide customers with the best calculating experience therefore markets yields that meet customer wants in terms of functionality and quality. An example of the company’s presentation in mark with its mission statement is the element that the company is graded as the major vendor of smart phones secretarial for 20.3% of shipments and 18.5% of global market share. This specifies that the business strategy employed is working out successfully to ensure organizational growth. Apple Inc.’s vision statement is that the person is the creator of change in this world. As such he should be above systems and structures and not subordinate to them. The vision statement stresses on the customer whereby the corporation marks to make them masters of products. It is expanding their business especially in China.

 

Objectives:

The objective of this report is to describe the current strategies of Apple Inc. including the market position, different strategies, strength and weaknesses and also its possible future situations, threats and opportunities in China.

Introduction:

The company was originated on April 1, 1976, and combined as Apple Computer, Inc. on January 3, 1977. The word “Computer” was detached from its name on January 9, 2007, the similar day Steve Jobs introduced the iPhone, reproducing its shifted focus towards consumer electronics. Its best-known hardware yields are the Mac line of computers, the iPod music player, the iPhone smartphone, and the iPad tablet computer. Its user software includes the OS X and iOS operating systems, the iTunes media browser, the Safari web browser, and the iLife and iWork originality and efficiency suites.

Apple Inc. was always run by charismatic leaders that are why it is successful. Steve Jobs was the founder of the company, and this was his charisma and intelligence that made the company revolutionary and innovative one. Tim Cook continued to be a good leader. Indeed, it is evident that a good leadership is a must for the development. These were charismatic leaders of Apple Inc. that had an impact of corporate strategy (Ashcroft, 2012).

For Apple Inc., the customer perspective is the most crucial. The customer takes a prominent place, and the level of them defines the profit and future perspectives. The number of customers defines the level of business. This perspective places the customer at the leading position (Lazonick, 2013).

For Apple, Inc. customers are the users of their gadgets. Apple should provide their customers with qualitative products and successful return policy, as there are many complaints about the return policy. Creating new products and services will benefit the company and increase the number of customers.  Apple should reduce prices on their services as high prices discourage the customers. Apple should work on improving the quality of their products and services, as high quality products and services will be competitive in the market.

At the present time, there are companies specializing in new technologies and gadgets that is why Apple Inc. has many competitors. Windows, Android, Blackberry, Sony, Dell, HP, Toshiba, Acer, Asus, Samsung, Nokia are the main competitors of Apple, Inc. All these companies are among the most recognizable companies that offer quite similar services and products. Without doubt, the consumer chooses that is not very expensive is comfortable and satisfies his/her demands.

Analysing Apple Inc. one can say that it is the most competitive one. While all of the companies listed earlier can be considered competitors, none offers such products as iWatch, iCar or iTV (Porter, 1979).

SWOT Analysis:

Strengths:

• Apple, Inc. has increased the customer loyalty by making a stand in their innovations and brand power in China
• Apple, Inc. is clever to take advantage of customer needs, desires, and wants, which has turned the company into a household name.
• Apple, Inc. bargains their users the iCloud system which allows users to back up multiple Apple, Inc. policies with the same applications and programs.

Weaknesses:

• The Apple brand is not besieged towards business people and does not have a standing as being compatible with the corporate world.
• Apple does not yet bargain lower priced models for more cost-conscious consumers.
• Touch screen boundariesgrieve from the difficult of “heavy arm”.
• There are some barriers also to expand business in China.

Opportunities:

• Apple can cooperate with many influential global mobile phone companies to flood the market with iPhones, which reduces costs in marketing and increases revenue through long-term agreement deals.
• As equipment advances and smart phones get cheaper Apple will attract consumers and become iPod users to elevation to iPhones.
• iPhone software permits new thrilling features to be carried in which take advantage of the touch screen capacity. Forthcoming versions will also be hardware upgradeable.
• New generation in China attract towards all iproducts

Threats:

• The variations to technology are going to occur and while Apple, Inc. is under pressure to generate the next hot gadget, they are not the only company who is manufacturing these kinds of gadgets.
• Corporations such as Samsung are competitors to Apple, Inc. Samsung, Google, and Microsoft is three main competitors of Apple, Inc.
• Samsung alone have transformed the way music is established. Also illegal transfers of music are a major problem for Apple, Inc. (Lazonick, 2013).

Rational for choosing Apple Company in China:

I select the Apple Inc. in China because it has become well known for its focus on high quality and ease of use in all its products. Apple, Inc. has also secured their brand value by constantly creating products that are well designed and now it becomes famous in China also.

Apple’s Business Strategy:

Apple’s Business Strategy is based on differentiation strategy, on high quality, innovation, strong graphic performance with great design, creating brand loyalty, etc. Apple, Inc.develops their variety of gadget and adapt to the international market. They continue to offer qualitative and innovative tools. Integration at the global market is a new way to development.

Information about Apple, Inc. as well as about their gadgets is via direct mailings, Internet, and in person. This aspect is aimed at satisfying different customers’ needs and at attracting different consumers from the different available countries.

Apple, Inc. brings the best gadgets to the different customers (students, businesses, and government agencies, educators, etc.). It means that they include into consideration their target market. Their business strategy is based on their unique ability to develop and design their own hardware, operating systems, services, application software, etc. One may make a conclusion that they do not copy anything in their competitors, they try to be unique and original. Their continual investment in development and research is the way to continual success (Lazonick, 2013). There are two main bis stores of Apple Inc. in Shanghai but they are so over crowded so now they are thinking to open another third store in China. (Panzarino, 2011)

Corporate Strategy:

The key aspects of corporate strategy can be listed as follows: strategic management, creating of shareholder value, realizations of potentials of the company and individuals and strategy of diversification. Apple’s corporate strategy includes diversification of business, making computer business dominant one and constraint diversification.

“Apple, Inc.” is a global company specialized in technology. It is a world industrial leader. Speaking about strategic management of “Apple, Inc.”, it is necessary to say that the leader and employees of this company devote much attention to it. The strategic plan, leadership, the strategic goals and tactics are connected with the innovations and implementation new technologies. Investors, customers, employees, communities and competitors are main stakeholders. It is evident that the complex activity of stakeholders, collaboration and communication between them belong to the corporate strategy of Apple, Inc. (Jeannet, J-P & Hennessey, 2001).

Ashcroft (2012) suggests such main components of corporate strategy: marketing strategy, production strategy, and financial strategy and R&D strategy. Marketing strategy of Apple, Inc. is based on orientation on the global market development. They follow a global strategy for creating products interesting for customers from all over the world. They promote their products worldwide as a standardized product. Apple, Inc. controls their pricing and monitors demand of their products at the international market.

Marketing Strategy:

It has been suggested that corporate strategy is a good strategy for getting new customers, attracting the community, and winning all worldwide markets. Widening the circle of customers means the constant incomes and financial benefits. Geographic diversity, using of economic growth rates for motivation and stimulation, finding new markets for raising the profits and using globalization for defense and support are the main goals of marketing strategy of Apple, Inc. (Porter, 1985).

Production Strategy:

Production strategy of Apple Inc. deals with creating of new locations for their products. They build capacity with demand and, as a result they have not evident losses but very high profits. Apple, Inc. has chosen well-analysed goals and objectives for implementation their global strategy in China. Ferrel (2010) highlights opening more stores, streamlining, launching new products as the ways for winning of international marketing

Financial Strategy:

A recent study by Barney (2012) involved financial strategy of Apple, Inc. as a right one, as a result is a positive one and profits are high. For example, in 2012 with profit $622 billion Apple got the status of the most valuable company. 26.9 million iPhones was sold in 2012. Apple sold 14.0 million iPads. These figures are really exciting and prove only about progress. However Apple Inc. should also take into consideration high prices as they may scare the consumer. Market share is still high in China, as iPhone 4 still sold in market although it’s an old device. China market is not a friendly market for American products. Google has found great difficulty to do business their but Apple with his wisdom growing day by day in China. (Panzarino, 2011)

Research & Development Strategy:

R&D strategy of Apple Inc. is well-developed in China. Apple Inc. uses sleep product design, easy-to-use software, innovative hardware for attraction the customers from all over the world. One can say that innovation, development and implementation are the key activities of R&D strategy of this company.

Specifically, the company should organize this process in such a way that all its products are to be sold. To sell goods to customers is not the easiest task, since it also involves a lot of activities before the actual selling. It is essential to create such marketing policy that will find ways to satisfy requirements of the customer.

Competitor’s Analysis:

Apple Inc. Competes with other companies for being the first one, as many new ones appear. Windows, Android, Blackberry, Sony, Dell, HP, Toshiba, Acer, Asus, Samsung, Nokia are the main competitors of Apple, Inc. All these companies are among the most recognizable companies that offer quite similar services and products.

pple Inc. may deal with such issue as spending additional costs on production in China as wages in China begin to increase. Another global problem with which Apple Inc. may face is government laws regarding environmental concerns.

Such demographic issues could appear in Apple Inc. as decreasing of buying power of consumers and aging population. These issues can cause decreasing in profits, selling and demand on their products. Political issues of Apple Inc. are connected with battle of Apple with Samsung over patents and desire of Apple to mitigate American taxes. Economic issue of Apple Inc. is connected with the recent recession in selling.

Sociocultural issues of Apple Inc. are connected with consumers’ environmental concerns, creating of new devices by other companies and outdating Apple’s products.  Technological issues are connected with rapid changes in technology and becoming of Apple’s products obsolete.

Industry environment of Apple is influenced by the power of supplies, power of buyers, threat of substitutes, threat of new entry and competitor rivalry. As to power of supplies, Apple Inc. is completely dependent on few chip designers and Intel that is a dominant one. Apple Inc. should look for many other ways of supplies in order to be competitive among them and does not spend too many costs on them.

As to power of buyers, Apple Inc. is completely dependent on high demand and technology. Varying needs of consumers make Apple innovate and develop. Threat of substitutes also makes Apple Inc. be on the alert. Many other companies produce Smartphone with the same function that is why Apple is afraid to lose their consumers. Threat of new entry is another dilemma of Apple solving of it demands many resources, developing of brand, etc. Competitor rivalry is a constant issue, but from the other side it is driving forces that stimulated to development (Rumelt, 1980).

It is evident that Apple Inc. collaborates with many manufacturers of the world. Asia is primary outsourcing partner of Apple Inc. OEM partners delegate the raw materials. Variety of direct and indirect distribution channels are used by Apple.  Apple products are free from BFRs and harmful chemicals. Marketing strategy of Apple Inc. is characterized by global strategy and actions, management vision, strategic intent, economic integration and satisfying market needs.

Profile of Apple Inc. in China:

Development is driven by a mixture of persistent product innovation, hard retail control and an equal of premium brand equity outside its competitors reach. This approach allows Apple to grasp high price positions with no negotiation, and the premium status of the brand is replicated in its supplies and all located in desirable high-traffic locations. As a result, Apple suggestively outperformed the global retail market in 2013. Many of the established markets where Apple is toughest were characterized by dangerous price pressure, but the company’s difficult control of how its yields are sold has permissible it to sidestep this.

Apple customers tend to be price-insensitive, and as a consequence there is little pressure for the corporation to push into developing markets, where its sales model might be problematic to operate anyway. (Daniels ethics, 2007).

It means that the Apple does a very good job of innovation in the China market, pursuing these innovations not only with an aggressive mindset towards the future, but using it is an instrument for defense against all others in or annoying to break into their market. With frequently improving and inventive products, those who are trying to enter the market have to think even more ahead. The lifetime span for a product between useful and obsolete is on a much smaller timeline with technology advancing as fast as it is (Daniels ethics, 2007). In 2011, Apple Inc. earned $2.6 billion revenue from China’s retail store. Now the company is opening third big retain store in Shanghai, China. Apple products are very unique and no one can copy its quality that’s why Chinese are more attracted towards Apple products. (Panzarino, 2011)

China and iPhone:

iPhone is making alot of business in worldwide but in China the revenue exceeds above $100 billion. It happened first time in China. In 2010, it was above 37%. Since 2009, Apple Inc. has selling the iPhone in China Unicom officially. So, in China there is a big potential market of iPhone. (Panzarino, 2011)

Conclusion:

From the above discussion it is worth saying that Apple Inc. improves its strengths with the help of business and business strategies In China. It takes into deliberation its weaknesses and always aspects for the ways of harassed with them. Corporate and business strategies benefit to understand their opportunities and decrease the probability of threats.

With Apple, Inc. being a major player for the company a SWOT analysis of Apple, Inc. will benefit their own strategies. The SWOT analysis looked at strengthens weaknesses, opportunities, and threats factors of Apple, Inc.

Cook says, “I believe that we are scratching the surface right now, think there is an great opportunity for Apple (in China). (Panzarino, 2011)

 

References

Ashcroft, J. (2012). Apple from the iPod to the iPad.A Case Study in Corporate Strategy, Second Edition.

Barney, J. B. (2012) ‘Firm resources and sustained competitive advantage’, Journal of Management, 17(1), 99-120.

Ferrel, OC & Hartline, M.(2010).Marketing strategies, 5th ed., Cengage Learning, Independence.

Jeannet, J-P &Hennessey, H.D. (2001). Global marketing strategies, volume 1, 5^th ed., Houghton Mifflin, Boston.

Porter, M.E. (1979).‘How Competitive Forces Shape Strategy’, Harvard Business Review, March/April.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management Concepts and         Cases: Competitiveness abd Globalization. Mason, OH: Cengage Learning.

Daniels ethics (2007). Apple Inc.’s Ethical Success and Challenges.Retrieved from 21 October 2018. Available at: http://danielsethics.mgt.unm.edu/pdf/Apple%20Case.pdf

Lazonick, W. (2013). Apple’s Changing Business Model. Retrieved from 21 October 2018. Available at: http://www.theairnet.org/files/research/WorkingPapers/LazonickMazzucatoTulum_AppleBusinessModel_AIR-WP13.0701.pdf

Panzarino, M. (2011). How Apple has found success in China, and why it’s just the beginning. Retrieved from: http://thenextweb.com/apple/2011/09/05/how-apple-has-found-success-in-china-and-why-its-just-the-beginning/