Apple Inc.’s Market Strategy

Apple Inc.’s Market Strategy

Introduction

Apple Inc., also known as Apple, is a leading electronic dealer in the world. Boasting a wide array of electronic types including phones, tablets, personal computers and television sets, among other technology equipment, the company sits top among leading electronic dealers in the world (Wright, 2012). Apple is attributed indirectly with the invention of Android phones software by Google in a bid to make competition stiff for it. For the purposes of this paper, a strategic analysis of Apple Inc. will be conducted with the aim of establishing the present business position, the long-term direction, resource and competitive capabilities, effectiveness of its strategy and its opportunities for gaining sustainable competitive advantage. The work will further outline the he challenges and opportunities of Apple Inc. in the global market environment. Of importance in this report is on the strategies that Apple can employ to penetrate the international market successively, especially into the untapped markets of regions like Africa and the Far East.

For a long time, the company was not well known since its inception in 1976. Rising from humble backgrounds, the company began as a computer manufacturing company before its shift to consumer electronics from 2007. Due to the various items that the company now deals with, it is classified now in the form of market segments. In the mobile phone segment, Apple comes third in terms of popularity behind giants Samsung and Nokia. In the IT sector, Apple ranks second in global rankings. With computers like Macintosh that cannot be attacked by malware, this corporation is rated highly by consumers (Nair & Leng, 2012). Over time, its technological innovations have been revolutionized. Items like iPhones are new additions, although the management has not been keen on expansion strategies. After the introductions of the iPhones, the company has revolutionized many other technological products although it has not been keen on expansion strategies. From the report, it will be possible to outline expansion strategies of Apple Products into newer markets, so that it attains a global appeal like the one attained by top performers like Coca Cola.

Apple’s SWOT Analysis

Understanding noteworthy strategic management of companies requires one to conduct a SWOT analysis. This enables one to identify the position of the company in the target market segment, potential hurdles involved and ways in which a competitive drive can be achieved. This leads to an effective strategic management venture. The SWOT Analysis applies four elements namely: Strengths, Weakness, Opportunities and Threats. From these four cadres of analysis, it will be possible to determine the position of the company in the target market segment and strategies that are to be put in place.

Strengths

Brand uniqueness is a major strength of Apple Inc. The uniqueness of the Apple brand has enabled Apple have a competitive advantage in the market arena. Despite beginning in the 70s, its committed and strategic leadership has enabled it rise over time. Apple’s leadership is committed towards innovation and creativity, and these two attributes have enabled it move ahead over time. Apple’s products are created in such a way that they are able to surmount common problems experienced in the technology arena. An example is the resistance of Macintosh computers to malware attacks. For this reason, many companies prefer Apple computers in the wake of cyber-attacks. Apart from the unique brand, Apple’s corporate culture is one that encourages individuality and creativity. These attributes have been responsible for the continual evolution of apple products. . The corporate culture has further established “The Apple Fellowship” which recognizes outstanding employees of the company with awards and promotions. Venturing into the new market with such a positive history and brand name is anticipated to favour the company in its competition (Cusumano, 2011, p. 27).

Weaknesses

Not much can be said about the weaknesses of the brand in the market. Apple’s problems are a normal occurrence in any brand that is rising to challenge top performers in the global market. Any criticism of a brand is meant to improve it. For instance, some time back, reliability and quality was compromised with the production of the iPod Nano. Consumers lamented that the item’s screen was fitted with a very brittle and delicate screen. Initial iPods also had batteries that were not long lasting. Apple Inc. responded by doing replacements for clients whose sales fell within the warranty period. Apple appreciates that these challenges will only serve to make them produce more quality brands. It is anticipated that the new market will be devoid of such challenges.

Opportunities

Apple Inc. has an excellent opportunity to dig roots deep into the global market segment and be a success like Coca cola. The manner in which Coca cola has established itself as the number one soft drink company in new markets like Africa can become a learning for electronic companies like Apple. Apple being a top electronic company should take this opportunity and expand in new markets, thereby having a global feel. Success in America and Europe needs to be replicated in areas like Africa. At a time when the economies of third world countries are growing, Apple needs to grab the opportunity and venture into these new markets early. Its wide array of products and the fact that they are of quality are added advantages for potential market success and profitable operations.

Threats

The biggest threat of Apple is Google, the internet super search engine manufacturer. Google developed Android software for mobile companies so that it can make competition tough for Apple. The best way to keep up with competition in the market is by coming up with newer ventures to counter those being advanced by competitors. Competition only serves to make companies better, and Apple must realize this and take advantage.  Apple for instance can manufacture quality and affordable iPhones for new markets in places like Africa and Asia. This way, it will have dealt with the threat of Google and that of Samsung and Nokia. The other threat to the market excellence of Apple is the electronic manufactures Nokia and Samsung. Not only are their products cheaper than those of Apple, but also, they are of high quality at that price. Apple needs to use the same strategy in keeping up with these companies. In the tablet and mobile phone arena, Apple lags behind Samsung because some of its applications, features and software can only be manufactured by Apple. This cuts down options for some consumers, and they opt for more user friendly gadgets like those of Samsung and Lg.

Apple’s long-term Direction, Strategy and Competitive Advantage

New Market Segment

Apple’s expansion into foreign markets needs to be motivated by the prevailing market conditions in such markets. Such a decision should be informed through a thorough analysis of the available markets. In view of its SWOT Analysis and current competitive advantage, the most appropriate market for Apple is the East African market. This is informed by the fact that the region is growing quite fast in terms of the electronic market and that East Africa has been identified as the point of entry into East, Central and Southern Africa regions. Countries like Kenya have invested heavily in technology, and with the current incorporation of IT into the educational sector, Apple will reap heavily marketwise. In Rwanda for instance, it is a requirement for children in primary school levels to be taught using ICT and innovation (Seed, 2007, p. 11).

While the Agrarian and Industrial Revolutions began in the West, Africa is in the contemporary era embracing technology and ICT in many quarters. Through technology for example, East African nations believe and rightly so, that development will be boosted. Kenya, one of the fastest economies in Africa, and the biggest in central and Eastern Africa is seen as the best entry market for any foreign markets to Africa. Companies like Zain and Barclays began in Kenya, and with time, they have spread to cover the entire continent. Apple needs to borrow a leaf from this. The World Bank has identified Kenya as the best investment hub for technology due to new inventions like mobile banking. It has been predicted that an economy that embraces technology is posed for noteworthy growth. It would not be a loss for Apple to try these new markets. Such will be a growth sustained on a strong foundation of reliable and affordable technological products.

Apple needs to capitalize on the principle dubbed “digital migration’ in setting tent in Kenya and spearheading the technological transformation of the region. This principle aims to rid the country of analogue signals and replace them with the efficient digital ones. Apple’s competitive advantage is a tool that can aid the company be a success in new markets like Kenya. With reduced costs of production, the company will be able to sell profitable at affordable prices and beat Samsung and Sony in technology products (Carare, 2013, p. 295). This market has opportunities that are able to supplement Apple’s wide range of resources and capabilities of creating a competitive market advantage. Establishing a manufacturing industry in the form of direct foreign investment would give Apple a competitive advantage over its competitors through direct customer contact and price reduction. Other concerns such as distribution will be addressed within the context of legal provisions. With the patent rights, Apple can appropriate return to its sources as its products are protected with a strong legal approval. The transaction costs for this direct foreign investment will be minimal as the company has little history of franchising. Even so, strategic partnering will help particularly in the entry period.

In this market, research shows that there is a rising quest for technology products. Farmers in the countryside rely on mobile banking to receive money and buy inputs. Another advantage is that technology products are cherished. The advent of social media has driven many youth into buying phones with internet capabilities majorly for social chatting. Given that Apple’s iPhone has these capabilities, it has a high market in this market.

Market Entry Strategy

Apple needs to design an entry strategy to tap the otherwise untapped East African market, notably in Kenya and Rwanda. Mastering a new environment is always a necessity for any company wishing to break into that market. A hybrid market strategy will be needed in mastering the environment fast. This strategy would be the most appealing and profitable. In order to master this environment very fast, a hybrid market entry strategy would be most appealing and profitable. The advantage of a hybrid approach is that it enables joint business ventures to run while at the same time the company explores the business environment before making a decision. The decision for this method is supported by comparison on how other firms operate in the international market arena.

 

In order to realize success, Apple needs to identify specific joint ventures. For instance, Apple’s competitor partnered with a mobile subscriber company called Safaricom in Kenya in order to launch its android phones and other mobile accessories. Another company, Tecno, used the same approach in marketing its products. Using this observation, Apple needs to partner actively with a mobile phone company in the East African market as a way of gaining competitive advantage in the market and break the monotony of Samsung and Nokia. One of the possible mobile phone companies to partner with is Airtel Communications Company. Airtel and Safaricom Communications Companies are the leaders in mobile communications in East and Southern Africa. Apple needs to utilize such companies.

One risk of this strategy, however, is that Apple’s competitors may respond with a similar strategy and the companies contracted may enter into deals with Apple’s competitors. To mitigate these risks, Apple needs to enter into contractual agreements with companies barring them to sign deals with Apple’s competitors on the same line of products.

 

 

 

References

A Slice of Apple’s History’ 2011. Professional Safety, 56, 12, p. 56, Business Source Premier,       EBSCOhost, viewed 13 December 2013.

Apple tops brand table as Samsung makes strides’ 2013, Financial Management (14719185), 42, 3, p. 9.

Carare, P., 2013. ‘Unfair competition: Samsung versus Apple.’ International Journal of      Innovations in Business, 2, 3, pp. 293-297.

Cavusgil et al., 2011. International Business: The New Realities. New Jersey: Prentice Hall.

Grewal et al., 2013. ‘Marketing Channels in Foreign Markets: Control Mechanisms and the           Moderating Role of Multinational Corporation Headquarters-Subsidiary Relationship’,          Journal of Marketing Research (JMR), 50, 3, pp. 378-398.

Nair, P, & Leng, Q., 2012. ‘The Sweet and Sour Apple: The Case of CEO Strategies at Apple       Inc.’, Vidwat: The Indian Journal of Management, 5, 1, pp. 21-24.

Wild, J., and Wild, K., 2011. International Business with MyIBLab: Global Edition. New Jersey: Prentice Hall.

Wright, A., 2012. ‘Analyzing Apple Products.’ Communications of The ACM, 55, 1, p. 27.