Background of the Organization
Apple Inc. is one of the leading American electronic manufactures that has specialized in the production of personal computers, smartphones, iPod media players, tablet computers, and online services. It has its headquarters in California but has global market coverage. According to Lüsted (2013), Apple has 425 stores across 14 countries, but mostly it sells its products through retailers across the world.
Gillam (2012) says, “Apple is the largest publicly traded corporation in the world by market capitalization, with an estimated market capitalization of $446 billion by December 2013” (p. 35). Apple was named as the most valuable brand in the world in 2013, edging out Coca Cola that has maintained the top position for some time. The firm’s products have gained popularity in the global market despite the stiff competition experienced in this industry.
Business Problem and Charge for the Marketing Plan
Apple Inc. has come under massive competition from its arch-rival, Samsung Corporation. Samsung, just like Apple, has massively invested in research and development, and this has resulted in the production of quality products in the electronic industry. The two firms have been fighting for the global market share in the Smartphone, laptop, and television markets. The stiff competition between these two firms is unhealthy because they spend a lot of time in court battles on issues of copyright on various products. Their attention is more focused on how to fight themselves than how to deliver continuous quality products to the customers.
Another threat is coming from the emerging electronic firms in China. A number of Chinese companies are also entering the electronic market that has been dominated by Apple and Samsung. They are very aggressive in fighting for the market share, especially in the emerging markets in Africa and parts of Asia. This has affected the profitability of Apple as its market share in these markets has been reduced. While Apple is struggling to increase its market share for iPhone 7, Samsung is planning to introduce a tablet called Galaxy MiniS, a move that is expected to increase the competition even further.
The task at this stage will be to find an effective marketing plan that this firm can use to manage the threat posed by the competitors. It is clear that the level of competition may not go down because other new firms are emerging in various parts of the world. The only option for this firm would be to find a superior marketing plan that will enable it to go above the market competition. The plan must enable this firm to distinguish itself as a superior brand to other existing market brands in order to be in a position to maintain its attractive sales in the market.
Issues under Investigation and the Relevance of Marketing
In this study, the researcher will be interested in investigating the current marketing strategies of Apple Inc, and how effective they are in addressing the issue of competition. It is a fact that this firm’s brand was ranked the most valuable in the world in 2013. However, this does not mean that it will translate into positive sales in the market if the firm fails to use appropriate marketing strategies. The problem that this firm faces can be addressed by an effective marketing plan. The plan must clearly stipulate how this firm will distinguish its products from those of competitors, and convince the market that they offer superior quality.
In order to develop an effective marketing plan for Apple, it is important to conduct a situation analysis in order to understand the current forces at the firm (Emerald Group Publishing, n.d., para. 3). It is important to investigate the external environment, customer environment, and the internal environment of this firm.
External Environment Analysis
The external environment analysis of Apple Inc is important in bringing a clear understanding of the issues under investigation. This analysis can be done using PESTEL Analysis tool. The political environment within which Apple has been operating is varied. As mentioned, Apple is operating in the global market. However, the major market for its products has been the United States and Europe. These two regions have experienced a prolonged period of political stability. Other than the ongoing political strife in Ukraine, Apple has enjoyed a peaceful market in Europe. The political environments in other markets such as Egypt, Syria, Kenya, and Nigeria have been affected by political instability in recent times.
The economic environment has been marred by a number of challenges in the recent past. The United States, the largest market for Apple’s products, was affected by the 2008 economic recession that reduced the purchasing power of the customers. Europe and other markets around the world were also affected. However, these regions have recovered from this recession, and this has stabilized the sales of the firm.
The social environment for this firm has been varied in many countries. There is a consistent rise in the size of the middle class in many Asian and African countries, making these two markets very attractive. The desire for high-end products by this class has created a massive market for Apple’s iPads, iPhones, laptops, and many other products.
The technological environment has offered Apple a rare opportunity to develop sophisticated products that meet the needs of its target market. According to O’Grady (2009), Apple has been keen on studying the technological changes and modifying its products to reflect these changes. The iClouds and other online products launched by this firm is a clear indication that Apple is making the best out of the emerging technologies. However, the emerging technologies have also made it easy for the rival firms to copy some of the products manufactured by this firm. Samsung and many other Chinese firms have been accused of copying some of the models of iPhone without obtaining permission from Apple. This is affecting the ability of Apple to enjoy the benefits of its creativity.
Environmental issues are some of the factors that Apple has been forced to deal with within the market. The environmental bodies have accused Apple, and many other electronic firms, of massive environmental pollution. The e-wastes pose serious environmental challenges and health hazards if they are not disposed of appropriately. The substances used in the manufacture of these electronics may be very harmful to human beings and animals if they are not carefully disposed of. Apple has been accused of failure to come up with measures that can help control the harmful nature of their e-wastes. This has affected the image of the brand, especially because of the sensitivity of the issue of environmental pollution.
The legal system has worked both in favor and against Apple Inc. The legal battle between Apple and Samsung has been taking different twists over the years. The two firms have been engaged in a prolonged legal war over the issue of abuse of copyright laws. Apple has won some of the cases, while others have gone in favor of Samsung. Such legal battles are very costly, and they divert the attention of this firm from developing new models to the need to win the cases. Each of the countries has clear legal structures that Apple has to adhere to when operating in those markets. Some of these laws are inhibitive, affecting the ability of this firm to operate freely.
Apple is facing stiff competition from numerous electronic firms in various countries around the world. The main competitors in almost all the sectors that Apple operates in are Samsung Corporation. This giant South Korean company is currently considered the largest electronic firm in the world (Sutherland, 2014). It has been keenly following the trends taken by Apple, the fact that it has enabled it to produce almost similar products as Apple. Just like Apple, Samsung has global market coverage, with its presence in the emerging markets being stronger than that of Apple. Nokia is another serious competitor in the field of Smartphone. Lenovo, Toshiba, and HP also offer this firm, stiff competition in the field of laptops. These competitors have constantly posed serious competition to Apple as they struggle to increase their market shares.
Customer Environment Analysis
The customer environment analysis can be done by classifying the customers of this firm into different groups based on their demographic factors. According to Jeffery (2010), customers can generally be classified as the low class, middle class, and high-class individuals. The main target market for the products of this company is the middle class. The high class is another major market, only that it has fewer people. Apple brand has been characterized by high-quality products. Customers who buy Apple products are always attracted to its quality. These customers are always interested in the high quality that these products offer to the users.
According to Gillam (2012), customers in the high class give a lot of emphasis on the quality of the products. Their decision may not necessarily be influenced by the price of the product. They are always willing to pay high prices for the products they purchase as long as they are assured of the quality of the products. Most of the customers who fall in this category are in the United States and European countries. The middle class are always price sensitive, but they highly value the quality of the products they purchase. They are willing to pay a little more for the products they buy when they are assured that the quality is high. The middle class consumers for Apple products are in China and Africa.
Customer environment analysis can be done on a geographic basis. The customers in the United States and Europe are always keen on accessing new products as soon as they arrive in the market. There are cases where some customers would pay for new products in advance before they are released into the market because of their trust for the Apple brand. On the other hand, customers in Asia and Africa prefer to follow on the path that is already confirmed to be effective. When handling these two types of customers, the marketing unit of this firm must find a way of meeting their differing needs.
Apple Inc recently made some efforts to form collaboration with some of the organizational buyers in Africa as a way of boosting the sales of its products. The firm has been supplying the electoral bodies in some African countries with Smartphone to help in relaying data during election. This was witnessed in the last election in Ghana where it provided laptops and Smartphone to the electoral body.
They partnered in an effort to ensure that there is free and fair election in that country. This collaborative approach has been beneficial in boosting the sales of the firm’s products to the organizational buyers. Apple has also been actively participating in the promotion of security at various airports across the world by developing screening gadgets used at the airports. This has not only boosted its image in the market, but also increased its sales volume and profitability.
Internal Environment Analysis
According to Jeffery (2010), it is important to understand the internal environment of this firm in order to determine its capacity to compete against its market competitors. SWOT Analysis can be very important in understanding the internal environment of Apple Inc. The strength of this firm lies in the value of Apple’s brand in the market. The brand is trusted by many consumers across the world, making it easy to market the product to the global market. The marketing strategies used by the marketing unit have also been superior, especially the social media marketing. Apple’s long years in this industry offers it the experience it needs to manage competition and the emerging technologies.
The huge profits of this firm give it the much needed financial strength to support research and marketing strategies. Despite these beneficial factors, Apple has some areas of weakness that may affect its operations in the market. Critics have accused this firm that it was riding on the wave of Job era as it has been unable to find a perfect replacement for him (Sutherland, 2014). This may affect the trust that people have towards this brand. The recent cases of defects in the charging system of its latest iPhones are other weaknesses that should be addressed effectively in order to maintain the customer trust.
The market offers opportunities that this firm must find a way of exploiting maximally in order to improve its market share. The growing size of the middle class in China and Africa offers this firm a wide market to exploit. The fact that barriers to international trade is reducing also offers Apple a perfect environment to export its products to all parts of the world. However, there are some threats that this firm must be aware of in the market. The stiff competition, the threat of terrorism, the rising cost of production, and dynamic technologies may affect the ability of the firm to achieve success in the market.
The management unit of this firm has been restructured in order to ensure that this firm remains successful in post-Job era. The massive profits that this firm has been receiving have been used extensively in research and design to improve the quality of the firm’s products. The management has also invested a lot in marketing.
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Gillam, S. (2012). Steve Jobs: Apple icon. Minneapolic, MN: ABDO Pub. Co.
Jeffery, M. (2010). Data-driven marketing: The 15 metrics everyone in marketing should know. Hoboken, N.J: John Wiley.
Lüsted, M. A. (2012). Apple: The company and its visionary founder, Steve Jobs. Minneapolis, MN: ABDO Pub.
O’Grady, J. D. (2009). Apple Inc. Westport, Conn: Greenwood Press.
Sutherland, A. (2012). The story of Apple. New York: Rosen Central.