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Apple Inc. Executive Summary
Company History The company started off as “Apple Computer” by Steve Jobs and Steve Wozniak, a pair of 20something college dropouts in 1976. Despite a strong brand, rapid growth and high profit in the late 1980s, Apple almost went bankrupt in 1996. Jobs then went to work and transformed “Apple Computers” into “Apple Inc” with innovative and technologically sophisticated non-PC products in 2000’s. By 2010, the company also viewed itself as a “mobile device company”. Apple became the fourth –largest PC vendor in the US market with an 8% share by the end of 2009. Its market capitalization went to $220 billion in spring of 2010. Through multi-million dollar marketing campaigns such as the successful “Think Different” ads and catch slogan, Apple promoted itself as a hip alternative to other computer brands. It also highlighted its computers as the world “greenest lineup of notebooks”. The goal of Apple is to differentiate its products amid intense competition in the PC and mobile device industry. Target Market The target market for Apple falls into the following categories: Home users, small and medium sized business, education segment, younger generation and creative individuals call the “Mac users”. Apple retail store concept helped consumers to look at the eye-catching products as well as directly use and experience Apple’s software. Products The successful product line of Apple Inc. consists of Macintosh, iPod series, iPhone series, iPad, iMac. Apple had two notable products that failed to live up to expectation namely Mac Mini and Apple TV. Competitors Jobs viewed Apple’s control of both hardware and software as strength. Apple has a highly innovative product line that aims to deliver a cutting-edge, highly integrated user experience. Since Apple Inc. has a diverse product line, it faces competition from mobile industry as well as PC industry. Products Macintosh and iMac iPod series Competitors IBM, Dell, Lenovo, Acer, HP Samsung, SanDisk, Creative, Microsoft’s Zune, Napster Amazon.com, Napster, internet radio sites like Pandora, Spotify RIM’s blackberry, Nokia, Google, Motorola Amazon’s kindle , Dell, HP, Samsung Microsoft Windows, Google’s Android OS
iPhone series iPad Operating system
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Situational Analysis Strengths 1. Pioneer of innovative and high-tech quality products like iPod, iPhone, iPad and Mac 2. Globally recognized brand name 3. Large segment of loyal customers of “Apple culture” 4. Strong Research & Development Department 5. Retail stores providing the eye-catching products and experience of Apple’s software 6. Strong presence in education segment 7. Visionary and charismatic CEO, Steves Jobs Opportunities 1. Good relationship through joint venture with other big companies coupled to bring out new “hits” 2. Constant growth of PC and mobile industry industry 3. More international expansion like Asian countries 4. Increasing demand of online music and others applications like cloud based services 5. Growing market of “Green” and energy efficient products Weaknesses 1. Failure of two notable products namely Mac Mini and Apple TV 2. Lower market share and higher price compared to Microsoft and other competitors 3. Decision to restrict iPhone to a single operator was unpopular in several markets around world 4. Steve job dependency, a risky tactic
Threats 1. Competition in technology with other PC industry giants like Dell, HP, Lenovo and mobile industry giants like Nokia 2. Expensive products as compared to other competitors such as Dell, Nokia, Microsoft 3. Poor health of Steve Jobs 4. High product substitution effect in the innovative and competitive technology market 5. Incompatibility with the windows platform
Key Situation The key situation is, whether Apple can continue its march to dominate the PC industry and innovative technology in the face of fierce competition from the big companies. Its products have marked a breakthrough in ease of use, design and technical elegance .But it is facing competition in its every product from the tech-world experts. So can Apples still be the exception in the highly competitive and fast moving IT consumables market in the next decade? Alternative Recommendations 1. Apple can strengthen the relationship with the PC industry giants like Intel and Microsoft and enter into joint ventures with others like Samsung and Motorola, to bring out new “hits”.
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2. Innovation and thinking differently has always been the key success factor of Apple. It has always been the first one to create technically elegant products and others have followed it. Apple should keep innovating new products to stay ahead of competition. 3. Apple should remove proprietary, and support open source development to attract more developers around the world to write applications for Apple products. 4. International expansion is a great opportunity for Apple Inc. to fight competition. Recommended Alternative 1. Apple Inc. presence in the United States and some parts of Europe is very strong. But it has not really broken the international barrier and taken any other countries by storm e.g. Asian market. In many countries like India and China, there is a huge population of younger generation, whose inclination towards innovative and technically sophisticated products is rapidly increasing. So if Apple penetrates into those markets, it could probably increase its market share and sustain its competitive advantage. Its competitors like HP, Lenovo, Dell, Nokia etc. have a strong presence in the US as well as in international market. If Apple has surpassed IBM, HP, Intel and rest of the tech-world experts in the US, it can win over them in other markets too. So Apple’s plan should be to go international, to grow and sustain its domination in the competitive industry. Implication for Marketing Mix Product: Apple should continue with its innovative products internationally. Mobile technology is a fast growing technology in Asian countries like India and China. So focus on mobile devices in Asian countries would be a smart step. Price: Apple should focus on the buying power of international market. It can go for medium pricing for the price sensitive Asian market and may be medium-high pricing for European and similar market. Promotion: Apple should continue promotion of its products on the ground of innovation, style and technical elegance, internationally. Place: Superstores like Wal-mart and best-buy in European market and online sale, shopping malls and education sector in Asian market.
By: Divya Mishra
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Company History The company started off as “Apple Computer” by Steve Jobs and Steve Wozniak, a pair of 20something college dropouts in 1976. Despite a strong brand, rapid growth and high profit in the late 1980s, Apple almost went bankrupt in 1996. Jobs then went to work and transformed “Apple Computers” into “Apple Inc” with innovative and technologically sophisticated non-PC products in 2000’s. By 2010, the company also viewed itself as a “mobile device company”. Apple became the fourth –largest PC vendor in the US market with an 8% share by the end of 2009. Its market capitalization went to $220 billion in spring of 2010. Through multi-million dollar marketing campaigns such as the successful “Think Different” ads and catch slogan, Apple promoted itself as a hip alternative to other computer brands. It also highlighted its computers as the world “greenest lineup of notebooks”. The goal of Apple is to differentiate its products amid intense competition in the PC and mobile device industry. Target Market The target market for Apple falls into the following categories: Home users, small and medium sized business, education segment, younger generation and creative individuals call the “Mac users”. Apple retail store concept helped consumers to look at the eye-catching products as well as directly use and experience Apple’s software. Products The successful product line of Apple Inc. consists of Macintosh, iPod series, iPhone series, iPad, iMac. Apple had two notable products that failed to live up to expectation namely Mac Mini and Apple TV. Competitors Jobs viewed Apple’s control of both hardware and software as strength. Apple has a highly innovative product line that aims to deliver a cutting-edge, highly integrated user experience. Since Apple Inc. has a diverse product line, it faces competition from mobile industry as well as PC industry. Products Macintosh and iMac iPod series Competitors IBM, Dell, Lenovo, Acer, HP Samsung, SanDisk, Creative, Microsoft’s Zune, Napster Amazon.com, Napster, internet radio sites like Pandora, Spotify RIM’s blackberry, Nokia, Google, Motorola Amazon’s kindle , Dell, HP, Samsung Microsoft Windows, Google’s Android OS
iPhone series iPad Operating system
1|Page
Situational Analysis Strengths 1. Pioneer of innovative and high-tech quality products like iPod, iPhone, iPad and Mac 2. Globally recognized brand name 3. Large segment of loyal customers of “Apple culture” 4. Strong Research & Development Department 5. Retail stores providing the eye-catching products and experience of Apple’s software 6. Strong presence in education segment 7. Visionary and charismatic CEO, Steves Jobs Opportunities 1. Good relationship through joint venture with other big companies coupled to bring out new “hits” 2. Constant growth of PC and mobile industry industry 3. More international expansion like Asian countries 4. Increasing demand of online music and others applications like cloud based services 5. Growing market of “Green” and energy efficient products Weaknesses 1. Failure of two notable products namely Mac Mini and Apple TV 2. Lower market share and higher price compared to Microsoft and other competitors 3. Decision to restrict iPhone to a single operator was unpopular in several markets around world 4. Steve job dependency, a risky tactic
Threats 1. Competition in technology with other PC industry giants like Dell, HP, Lenovo and mobile industry giants like Nokia 2. Expensive products as compared to other competitors such as Dell, Nokia, Microsoft 3. Poor health of Steve Jobs 4. High product substitution effect in the innovative and competitive technology market 5. Incompatibility with the windows platform
Key Situation The key situation is, whether Apple can continue its march to dominate the PC industry and innovative technology in the face of fierce competition from the big companies. Its products have marked a breakthrough in ease of use, design and technical elegance .But it is facing competition in its every product from the tech-world experts. So can Apples still be the exception in the highly competitive and fast moving IT consumables market in the next decade? Alternative Recommendations 1. Apple can strengthen the relationship with the PC industry giants like Intel and Microsoft and enter into joint ventures with others like Samsung and Motorola, to bring out new “hits”.
2|Page
2. Innovation and thinking differently has always been the key success factor of Apple. It has always been the first one to create technically elegant products and others have followed it. Apple should keep innovating new products to stay ahead of competition. 3. Apple should remove proprietary, and support open source development to attract more developers around the world to write applications for Apple products. 4. International expansion is a great opportunity for Apple Inc. to fight competition. Recommended Alternative 1. Apple Inc. presence in the United States and some parts of Europe is very strong. But it has not really broken the international barrier and taken any other countries by storm e.g. Asian market. In many countries like India and China, there is a huge population of younger generation, whose inclination towards innovative and technically sophisticated products is rapidly increasing. So if Apple penetrates into those markets, it could probably increase its market share and sustain its competitive advantage. Its competitors like HP, Lenovo, Dell, Nokia etc. have a strong presence in the US as well as in international market. If Apple has surpassed IBM, HP, Intel and rest of the tech-world experts in the US, it can win over them in other markets too. So Apple’s plan should be to go international, to grow and sustain its domination in the competitive industry. Implication for Marketing Mix Product: Apple should continue with its innovative products internationally. Mobile technology is a fast growing technology in Asian countries like India and China. So focus on mobile devices in Asian countries would be a smart step. Price: Apple should focus on the buying power of international market. It can go for medium pricing for the price sensitive Asian market and may be medium-high pricing for European and similar market. Promotion: Apple should continue promotion of its products on the ground of innovation, style and technical elegance, internationally. Place: Superstores like Wal-mart and best-buy in European market and online sale, shopping malls and education sector in Asian market.
By: Divya Mishra
3|Page
