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Course Name – B.A. (Vocational) Small and Medium EnterpriseSubject Name- Marketing Strategy & Relationship MarketingSemester- VIClass Time- 11.30 AMTeacher’s Name- Navodita ChaudharyCase Study And Analysis On Apple IncApple Inc. (previously Apple Computer, Inc) is a multinational corporation that is establishedon April 1, 1976 in California and incorporated on January 3, 1977. The company for 30years 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 thecomputer market.Furthermore, the company for the year 2010 employs 46,600 full – time employees and 2800temporary employees and contractors.Apple designs, manufactures and markets a range of computer software, hardware productsand personal computers. Some of its products are the following:ProductsHardware ProductsApplicationSoftwareOperation System SoftwareDisplays & Peripheral ProductsMarketing ToolsSWOT AnalysisThe SWOT analysis is used inside a company in order to discover its strengths, itsweaknesses, its opportunities and its threats.The SWOT analysis is a strategic marketing planning tool that is usually used to help eachcompany understand and analyse its strengths and weaknesses, identify the threats of otherbusinesses and the various opportunities in the market share. The SWOT analysis is dividedin two sectors. The strengths and the weaknesses refer to the company and its products asinternal factors, while the threats and the opportunities refer to the external factors of thecompany in which it has no control. In SWOT analysis it is usual to list the strengths, theweaknesses, the threats and the opportunities in the same page. This is done by dividing thepage into four squares and entering strengths and weaknesses (internal factors) in the top twosquares and opportunities and threats (external factors) in the button square. The SWOTanalysis should be brief and interesting and should not exceed more than four or five pages.
STRENGHTSWEAKNESSESOPPORTUNITIESTHREATSThe number of individual SWOT analysis will defer from company to company. The mostcommon levels that SWOT should be undertaken are the following:For the organisation as a wholeFor every major CompetitorFor every major product or serviceFor every major market shareThe 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 ofsituations.A good example of Apple to explore their strengths, opportunities, weaknesses and threats isto 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 Applesuch a powerful company. This is obvious if we look its past: 1970-2001-Apple was makingchanges only to its computers (face-lift), end of 2001-Apple introduced iPod, June 2008Apple introduced the cinema displays, March 2007- Apple developed Apple TV, June 2007Apple 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 tokeep 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 healthycompanies in the World, it managed to adopt a large amount of loyal customers.This happened because Apple periodically, provides updates to all its application andoperating systems not only for the Mac computers but for Iphone, Ipad etc. With this wayApple 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 insidethe 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 developingnew 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 developed a partnership with Intel microprocessors in June 2005. This was veryuseful for Apple because it is addressed in a wider market. Furthermore, as Steve Jobsspecified ‘Intel is the strongest processor roadmap’. Therefore from then until now, Applecomputers is much stronger and more stable.Apple has managed to adopt loyal customers through its stable and reliable products.Therefore, in order to make some profit in the introduction phase of its product, it announcesa pre-order technique in order for the innovators to pre-order the product and pre-pay it. Withthis technique Apple gain a large amount of money and invest them in other areas.WEAKNESSES:Apple’s hardware and software products and services are very complex and high technologythat most of the times contain defects such as ‘bugs’. For example, when iPhone 4G came toproduction, everyone was complaining about the signal when they make a call. Therefore,Apple introduced an update to fix the problem. However, there is no guarantee that Apple isable to detect and fix all the defects in its products and services.This failure results in harming its reputation and sometimes losing customers because theyare not satisfied.In the US, Apple has made a contract with a specific carrier for selling and promoting iPhone.If this carrier cannot compete with others in the U.S. market concerning the quality, coverageand pricing or if he cannot promote iPhone correctly into the market so as for the customersto buy it, then this will have a negative impact on the sales and the profit for the company asit will not sell enough units.Furthermore, as Apple decided to make a contract with one carrier, it will lose the loyalcustomers from other carriersSteve Jobs, is simultaneously a strength and a weakness. During the departure of Steve Jobsfrom the company, Apple was facing many financial problems because it did not have anyinnovative products. Therefore, if Steve Jobs leaves again from the company then it mightface the same problems. Therefore Steve Jobs is both a strength and a weakness.When Apple announced in June 2005 that is going to leave from IBM and to switch to Intel,some specialists commented that it might lose the loyal IBM customers because the swapwould confuse them.Apple has very high prices in its products, so it addresses in a low market- share and not to allcustomers.OPPORTUNITIESDue to the high competitive market, Apple has to introduce new products, services andtechnologies and enhance existing products and services so as to simulate new and existingcustomers to buy the new and upgraded products and services.With the success of iPod and iTunes, Apple entered to the Consumer Electronics market. Byintroducing iPhone, Apple has expanded to the Mobile Communications market. Therefore,now Apple has the opportunity to expand to further markets like home stereo, TV or even agaming system like play station.
Apple made a contract with Intel to install their processors to Apple computers so as toprompt business to replace Pc’s with iMacs. They did this in order for their businessapplications to become stable and reliable. The first example of replacing their computerswith 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 goingto be less expensive.THREATSThe biggest threat that all the IT companies face is the high level of competition in thetechnology markets. The most common feature is the price competition. The competitorsreduce their selling prices and sometimes adopt the features of Apple products in order toattract more customers. For example, Apple has only recently entered the MobileCommunications market, so many of its competitors have greater experience and moreresources, so they could provide their products in a lower price with little or even no profit atall.for the company. Therefore if Apple stops investing a lot of money to research anddevelopment, it will lose its competitive position in the market.Furthermore, in these markets the product Life Cycle of all the products and services isextremely short e.g. for mobiles phone their lifecycle is around 6 months. Therefore, eachcompany has to introduce new products and services. In 2005 Apple won a legal case about ablog that pre-introduced new Apple products. With this trial, Apple force Bloggers to namethe source of their information because the company suspected that the information hadleaked from its employees.Therefore, Apple is always vulnerable to leaks from various employees. This informationmay 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 totechnological companies. This happens as with the unemployment and the decrease ofsalaries; most customers consider the market of a technological product unnecessary e.g. aniPhone, so the sales of the company are going down.Customers will download music from another free online program without having to payanything in iTunes. This will have an impact on iTunes and on the profit of Apple.Ansoff MatrixAnsoff Matrix is a well known marketing tool which was first published in Harvard BusinessReview. Many companies nowadays use it in order to help them decide for the developmentof their product and the market share.The matrix has 2 dimensions. The first one consists of existing and new products while thesecond consist of existing and new markets. Inside the matrix there are four main categorieswith suggested grown strategies for each one in order to help the company set the correctdirection of their business strategy. The four categories are:Market Penetration in which the company enter into an existing market with existingproducts or services.
Product Development in which the company introduce new products/services into existingcustomers.Market Development which the company tries to attract new customers with existingproducts or servicesDiversification occurs when the company tries to capture new customers with completelynew 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 anddevelop new products/ servicesMarket Penetration:In this strategy, Apple could aim on selling the existing products, e.g. Mac Computers to theexisting markets. More specifically, Apple:Should try to increase the market share of the existing product. This could be achieved byusing the appropriate marketing tools( lower prices, sales promotion, advertising) in order toattract new customers to buy its products. For example, more advertisement or reduced priceson Mac Computers could persuade new customers that prefer Windows operations system tochange to Macintosh. This is more highly to be achieved in the grown markets because inthere the product is at its rising stage.In order to increase its sales and its profit, could persuade existing customers to buy moreproducts. This can be done during an economic grown where customers are willing to spentmore money in technological items. For example, Apple could use more advertisement orsales 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 DevelopmentIn this strategic option, Apple could create new products for the existing customers. Withthem, Apple has already a strong relationship, so it knows their need and specifications forcreating a new product. Therefore, the company is innovating its products in order to keepsatisfied 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 October2001. This was the first entertainment tool from Apple for people to use in order to hear allthe time their favourite music. However it had a black-white screen and only 5 GB capacityfor songs. Therefore, in 2003 Apple introduced an iPod with the maximum of 40 GBcapacity. 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 Appleinnovate 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 releasedin 2007. The next year Apple introduced iPhone 3G. In 2009 Apple announce the iPhone
3GS and in 2010 it announced the 4G. All these products are aiming to the same marketshare, the customers who have already bought the first iPhone and want to replace it with thenew one.Market DevelopmentIn the Market Development, Apple could use different marketing strategies in order to sellexisting products/services to new markets and increase its profit. It can achieve that, either byexpanding to other geographical areas or by looking for users with that will use the product ina different way. A common example is by expanding to foreign markets or to expand fromthe private sector to the public.[4] Some examples of Apple are the following:Apple did not stayed on selling only to U.S but expanded on all over the world and in 2010 itis earning 24,298 from America sales and 30,929 from worldwide. [5]Another example is that when Apple introduces a new product to the market, it leaves theprevious one for some time in the market in order for the customers with low income to buyit. With this technique Apple gain a new market and make a small profit.Another example is that Apple in the beginning was only selling only to customer market buta few years later, it expanded to the area of education.DiversificationThis strategic option is the risky of all as Apple has to think of new products and introducedthem into totally new markets. This option has a very high failure rate as many products failto come up with the expectations of the customers, so the company has a loss instead of aprofit. [4]The most recent example of diversification to Apple is the introduction of iPad in 2010. Withthis product Apple was aiming in capturing the customers who use the Internet all the timeand do not want to carry a notebook or a netbook with them. With iPad Apple did not enter toa completely different market because iPad is like an iPhone with a bigger screen. Therefore,Apple knew how to handle this type of product.Another example is the introduction of iPhone. In 2007 Apple introduced the iPhone, the firstmobile phone from Apple. With the specific product, it entered immediately to the mobilemarket which was totally new to them and in which did not have any previous experience.Apple knew that it should have many competitors and it knew that the product will be either afailure or a success. Therefore, with appropriate marketing and management strategies,iPhone proved to be a success.A much older example is the introduction of iPod. Apple introduced the iPod in 2001. Like inthe case of iPhone, Apple was entering here into a whole different area from the computermarket. It was entering into the music market and was aiming for existing customers to buyan iPod and for new customers to try one and also try the services of Apple.Finally, Apple has already entered in the markets of Mobile Communications, Computers,TV and Music, therefore it could invest money on creating a gaming console, like Play
Station 3, in order to enter to the market of gaming. If it enters this area, it will make a lot ofprofit because young people spent a lot of money on gamingMarket PenetrationUsage of appropriate Marketing Tools(advertising, lower prices, etc)Persuade existing customers to buy more products.Product DevelopmentIntroduction of iPod, the first entertainment tool from AppleInnovation of iPhone each yearMarket DevelopmentApple expended WorldwideDiversificationIntroduction of IpadIntroduction of iPhoneIntroduction of iPodApple could create a gaming console
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 .
