Apple Inc. (NASDAQ: AAPL; NYSE: AAPL) was founded in April of 1976, and since then it has become one of the most successful enterprises on the planet, with revenues of $14 billion in 2010 (Apple Inc.,2010). Apple Inc. reported revenue of $14 billion for 2010, up from $12 billion in 2009. Profit grew by 95 percent to $5.99-billion US in 2011, at the end of March 26 that year.
Apple’s earnings for the same period were $3.07-billion, or $3.33 per share (El Akkad, 2011: p. 4). Analysts had predicted Apple earnings per share of $5.37 on revenue of $23.3-billion; however these expectations were overly optimistic (Gartner, 2010a: p. 15).
Prices start at $12
Prices start at $11
Prices start at $12
In the first quarter of 2011, Apple shipped 4.69 million iPad tablets, far fewer than the 6 million analysts predicted (El Akkad, 2011: p. 4). The iPad 2 has been difficult for Apple to satisfy consumer demand for; nearly all Apple stores were sold out of the iPad2 in April 2011, and the business is now “heavily backlogged” (El Akkad, 2011: p. 4). Apple’s mobile devices appear to have a “halo effect,” with more customers converting their hardware, desktop computers, and laptops to the company every day. Every year, Apple’s computer sales rise by 28 percent; iPhone sales continue to climb, and shipments increased by over 50 percent in 2011 (El Akkad, 2011: p. 4).
According to El Akkad (2011), “iPods are the only Apple product that is decreasing,” however this is due in part to many customers shifting from low-end MP3 players to more high-tech – and pricey – Apple gadgets. According to BCG Financial’s Colin Gillis, “Apple is the business that best captures income and profits from the mobile revolution.”
Apple has a very strong advantage in the fight for users, particularly when it comes to mobile phones. There is no other firm in the business that can compete with Apple’s platform and ecosystem when it comes to generating money and profits. While several firms have respectable market share, none match Apple when it comes to income or profitability, according on our view (El Akkad, 2011: p. 4).
Apple’s worldwide strategy continues to develop; since its founding, the company has prioritized innovation and outside-of-the-box thinking, and the corporate culture has always been one of Apple Inc.’s major strategic accomplishments. With its iPad technology and perennially evolving iPhone—once thought of as a toy for consumers but now rapidly becoming a business necessity—Apple Inc. is continuing to push into the commercial world.
Apple’s retail strategy is also critical. By placing outlets in high-traffic areas of metropolitan settings, Apple Inc. has established a key worldwide retail plan that controls and regulates the consumer experience while simultaneously promoting its brand effectively. Global handset shipments increased by 13% in the third quarter of 2010 to 327 million units, and Apple ranked in the top five handset retailers, according to Strategy Analytics senior analyst Alex Spektor (The Mobile Internet, 2010: p. 12).
Apple Inc.’s market share “set a record 4 percent, surpassed RIM and Sony Ericsson, and narrowed the gap on LG,” according to The Mobile Internet (2010: p. 12). Apple Inc. embraces globalization in its customer base, actively promoting not only as a provider of technology but also as a lifestyle that affects not just consumer behavior but frequently sets the standard for technological development and progress.
One of Apple Inc.’s most successful global campaigns has to do with corporate culture. Apple Inc. actively strives for a culture that seeks talent on the world stage and rewards it when it is accepted into the fold. The iPod is used as an example in Global Strategic Management by Ungson and Wong (2008) to illustrate the efficacy of this approach (p. 343). Apple’s iPad launch, “backed by its competence in computer technology,” allowed it to “challenge Sony with a digital music player that provided more features than just music playback” after which any counteroffensive became ineffective (Ungson and Wong, 2008: p. 343).
The power behind the iPad came from a “reinvigorated culture at Apple, led by Steve Jobs, that has since catapulted the company into market leadership in this sector” (Ungson and Wong, 2008: p. 343). Apple Inc.’s corporate culture promotes a “systemic corporate culture of innovation that includes an ingrained belief in relentless and continuous improvement, particularly out of the box thinking,” according to Ungson and Wong (2008: p. 343).
The natural consequence of this corporate culture is innovation management; Apple Inc.’s worldwide strategy follows the adage that “nothing remains constant in managing innovation” (Ungson and Wong, 2008: p. 343). The creation and marketing of the iPad by Apple Inc., which PC Magazine (2011) recognized has come “a long way from being called a toy [and is quickly] being respected as a computing tool,” is an example of this global strategy in action during recent years.
“Many users find it easier to work with a program that is more organized and structured, which means less time searching for information” (n.p.). “I’ve been reading through your eight-year history of posts on In the Media’s In The Kitchen blog, what you’re good at seems to be working in digital entrepreneurship – so I’m wondering if maybe this might help you get started.
Apple Inc. released iOS 4.3.1 to address problems with enterprise Web support and launch a “specialized support plan for small businesses, called Joint Venture” (n.d.). Apple Inc. also teamed up with Unisys to sell the iPad in the business and government sectors. “Companies from JP Morgan to Mercedes-Benz began testing first-generation iPads in the office last year as a result of the iPad global strategy’s success,” according to PC Magazine (n.d.).
The worldwide sales of the Apple phone hit 14.1 million in 2011, up by 91% in just 12 months (PC Magazine, 2011: n.p.). “Apple has passed Research in Motion and Sony Ericsson to become the world’s fourth-largest phone maker…only three years after releasing its first model…. It sold 8.4 million iPhones in the second quarter and 8.8 million phones in the first” (n.p., 2011).
According to Apple’s 2010 annual report, global business strategy “utilizes its distinct capacity to design and develop its own operating systems, hardware, application software, and services in order to give new goods and solutions with better ease-of-use, seamless integration, and creative industrial design” (Apple Inc.,2010; p. 1).
Apple’s worldwide strategy also entails “continual investment in research and development” (Apple Inc., 2010; p. 1). Apple recognizes that innovation is critical to its success, and it considers it to be “essential to the creation and improvement of cutting-edge products and technologies” (Apple Inc., 2010; p. 1).
Apple’s expansion has not only caused the company to expand globally, but it has also altered its business model in response. As a result of Apple Inc.’s successful global expansion, the firm continues to use the same platform for the discovery and delivery of third-party digital content and applications through iTunes (Apple Inc.,2010; p. 1). In addition, Apple supports “the development of third-party software and hardware products that complement its services” (Apple Inc.,2010; p. 1). The goal of Apple’s business model is consumer loyalty and good sentiment with the brand, thus it “expands…its distribution to effectively reach more consumers and offer them with a high-quality sales and post-sales support experience.”
“As a result, the Company is ideally positioned to offer superior and well-integrated digital lifestyle and productivity solutions” (Robin, 1997: p. 33; Apple Inc., 2010; p. 1). By developing a global brand image and customizing goods for local cultures in various countries, Apple Inc. has successfully transformed itself into a worldwide player “(Thompson & Marton, 2010: 668; Doler, 1990: 117). Apple Inc. now has 317 retail outlets, including 233 in the United States and 84 abroad, as of September 2010. The Company’s stores have been generally positioned at high-traffic sites in high-quality shopping malls and urban shopping districts.
“By operating its own shops and placing them in high-traffic areas, the firm is better positioned to control the customer buying experience and attract new consumers. It also stands to benefit from lower labor costs thanks to Asia’s bargain basement pricing (Apple Inc., 2010; p. 2; Lasserre, 2007; Mintzberg, 2003; Morgenstern, 1996). Another important international plan Apple follows is to maintain dominance in its home market while recruiting inexpensive skilled workers from all around the world (Linden et al, 2009: p. 144).
The Apple brand has become legendary for its ability to turn what was once an American curiosity into a worldwide consumer product, but the company’s success may be attributed equally to its marketing genius. This marketing masterwork is so effective that it has virtually eliminated the leading competitors’ performance within months of launching.
Apple, for example, is a company that has taken significant risks in order to stay ahead of the competition. Through a combination of sharp business instincts, luck, effective relationships with foreign suppliers, and bravery, the firm continues to create value for its investors based in the United States while also providing high-paying, highly sought after employment opportunities worldwide for knowledge workers. As a result of these efforts from Apple and others like it around the world (p. 145), new blood and know how are continually injected into the talent pool so that it remains continually invigorated with fresh blood and expertise (p. 144).
According to Linden et al (2009), “if the iPod were made in the United States, most of the $150 bilaterally traded balance would evaporate, but overall trade deficits associated with each unit would only decline by a few dollars. The remainder would simply be shifted to countries where the components are produced since they will have to be imported to the United States for final assembly.”
“This is not to say that the US-China trade imbalance isn’t a big problem in a broader sense, but it demonstrates the need for more precise data to comprehend what that deficit means for each country.” (p 145) “This strategy keeps Apple’s “product design, software development, product management, marketing and other high-value functions in the United States.” (Linden et al., 2009: p 144).
The corporation produces the iPod in China, employing a worldwide network of suppliers. In this method, according to Linden et al (2009), “the greatest benefits from this innovation go to Apple, an American firm with mostly American workers and stockholders who benefit” (p. 144). Apple’s global approach has remained consistent with other major US multinational firms that base their operations in the United States.
The company does not follow this method, according to Linden et al (2009), because the US work force has superior skills in all of these areas, but rather because Apple has developed highly specialized expertise and methods of doing things that exist inside the organization and would be difficult to relocate outside.
Large companies like Apple are increasingly becoming multinational projects, yet “most businesses maintain a large presence of facilities in their nation…this home-country bias may be caused by historical inertia, top management preferences to live in their homes or other factors.”
“In the case of the United States and other large economies, their prominence as a key market serves as an additional anchor for businesses located there…However, supply linkages do not always extend to family ties” (Linden et al., 2009: p. 144). Apple’s worldwide plan also encourages competition among suppliers, as seen by Apple’s recent loss of PortalPlayer’s manufacturing contract with it for the new iPod generations to Samsung (Linden et al., 2009: p. 144).
Apple values innovation above all else, not just in its designers, thus the “producers of high value, critical components capture a large share of the value of Apple’s innovative product” (Linden et al., 2009: p. 144). As a result, Apple’s global strategy generally encourages firms from other countries that provide the greatest value; Apple’s most innovative resources then flow to “countries whose firms offer critical, distinct technologies” (Linden et al., 2009: p. 144).
The firm also pays a higher percentage of revenue to suppliers in charge of the more valuable technical components. The company also distributes a greater proportion of revenue to suppliers in charge of the more expensive technical components, according to Linden et al (2009).
The 30GB Video iPod is a notable example. The authors of Linden et al (2009) note that the “hard drive and display, both supplied by Japanese firms, are the most valuable components. As a result of its companies’ technical strengths in these technologies, Japan captures the next greatest share of the value add from the iPod. U.S.-based circuit designers such as Broadcom and PortalPlayer supply less expensive inputs with greater margins but add significant value to the United States because of their high margins.
Apple Inc.’s worldwide strategy sees the entire world as a talent pool, and it continues to explore new ideas. Apple’s corporate culture of innovation successfully positions the company as a trend setter in the technology sector.
Objective: To establish a viable market need for Apple goods in developing countries, ensuring the longevity of the Apple brand. Details Apple Inc. is a multinational business with offices in 97 different countries across the world. It sells computers, televisions, and software among other things. Apple is recognized for producing cutting-edge technologies that are both user-friendly and aesthetically appealing.
In the computer world today, Mac and PC are closer than they’ve ever been in terms of hardware. The memory in a MacBook Pro is almost the same as a comparable PC laptop. So where do people choose to use a PC or a Mac? The first obvious distinction is the operating system, known as OS.
China is made up of a number of distinct social, economic, and cultural areas. China’s varied levels of income and consumption have led many multinational corporations to see the country as a single nation rather than one national market. While multinational businesses concentrate on the premium market, Chinese consumer goods firms compete for middle-class and low-income customers at home.
Changes in the labor law passed in January 2008 have improved labor protection and wage conditions, but most significantly has increased China’s factory labor cost, forcing foreign businesses interested in low-margin sectors to reconsider their operations.
China-made goods are also examined for quality, hygienic, and safety concerns. In a global climate beset by trade friction and financial uncertainty, these difficulties may make it even more difficult for China to achieve a successful year in the future.
According to China’s anti-dumping rules, a number of imported items enter the country at a price lower than their real export value and actually cause damage or represent a potential risk to domestic businesses. 4 – Employers are required by law to establish and improve labor rules and regulations in order to guarantee that employees have access to their rights and carry out their obligations.
According to Ideavist, owing to the rise in competition as rivals attempt to acquire a share of the market, enterprises employ a variety of methods to address these difficulties. The following are some marketing techniques that businesses may utilize for future success that Apple might find useful.
Today, the technology sector is dominated by numerous businesses all competing for a big share of the market, with fierce rivalry among many firms resulting in acquisition and renaming events like as Nokia and Motorola.
Apple can adopt the approach of representing a less profitable market to deter new entrants from taking that route because they will be demotivated by the poor return on investment that would result from low profitability levels. Apple must take and apply such bold measures of defense to protect its interests and stay profitable and successful in order for it to establish a niche for many products (Ideavist, 2011).
The entry of a new technology firm into the market would be detrimental to most firms already battling for market share since better priced and more dependable goods might imply customers shift their preference to the newcomer, resulting in a negative volume of sales for many already established businesses. Another option that Apple may utilize as part of its defense is pre-entry techniques that make it more difficult for fresh entrants to compete and enter the sector, such as continuous product improvement.
Apple might use a variety of offensive approach assaults, either direct or indirect, or perhaps moving and establishing a new market or product to break away from the already competitive sector. In cases where businesses or organizations have greater resources, launching a direct assault is the greatest method to combat them; however for firms in the same league as Microsoft, Google, and Samsung, an indirect attack using a frontal attack is the best method.
In the event of a significant loss from a direct assault, a counterattack by the firm is almost certain (Porter, 1985). On the other hand, because detecting them is difficult and if the assault did not target directly the company’s segments or non-core products, offensive techniques employed as indirect assaults have little chance of facing a retaliatory response.
In this context, the word “strategy” has a variety of meanings. However, in this scenario, strategy is defined as “Where do you want to be in the long run?” as stated on the tutor2u website (2015). Strategy is a pre-determined road that a business must travel in order to achieve its goals and objectives for success.
Every company’s plan is unique to them, depending on the kind of business and the market they operate in. However, there may be a few links between every firm’s strategies. For example, Apple’s approach is quite different from one another since they operate in two separate markets, but there are certain parallels between the two, such as high pricing.
The development of a marketing strategy is crucial, and it must be well-planned. Because the company may either accomplish all of its goals or fail completely, it’s important to have a well-thought-out plan. Every business has its own set of strengths and flaws. The company also faces opportunities and threats that can influence its performance.
In about 1974, three major airlines from the United Kingdom joined together to form British Airways (BA). In 1987, British Airways was privatized and sold its shares on the London Stock Exchange. Boeing and Airbus are two important Boeing and Airbus customers. Since then, they have grown considerably by increasing their services and destinations.