Apple Inc.’s Strategic Actions and Marketing Approaches

Abstract

The emergence of new competitors has made it impossible for Apple Incorporation to remain profitable in its market segment. Nonetheless, the company has continued to use ineffective marketing strategies that fail to consider the needs of the global consumer. This discussion, therefore, identifies the unique threats and challenges that will affect the company’s future performance. The current business practices and marketing strategies can no longer make Apple a leading competitor in the industry. The paper proposes several strategic actions and marketing approaches that can change the playing ground and eventually make Apple the brand of choice to the greatest number of consumers.

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Introduction

Apple Incorporation remains one of the most revered organizations in every corner of the world. The trick to its successful performance is “the ability to deal with weaknesses and threats” (Hasan 12). The company has been embracing the power of research and development (R&D) to produce revolutionary products. Such products continue to pose a challenge to the existing substitutes. As well, the managers at the company use different strategies to maximize growth and performance.

The concept of outsourcing makes it easier for the company to minimize production costs while at the same time safeguarding its brand image (O’Grady 9). The corporation has succeeded to market its devices and smartphones to many consumers across the globe. However, Apple Incorporation is characterized by several weaknesses that might affect its future performance (Hasan 83).

The marketing model used by Apple is unsustainable and might not support its future business objectives. This discussion examines the nature of this marketing challenge affecting Apple Incorporation. The research will analyze the major threats that might arise from the firm’s marketing strategies. Useful recommendations and action plans are presented to ensure the company retains its performance.

Background Information

Statistics indicate that “Apple is the largest information technology firm based on annual revenues” (Khan, Alam and Alam 963). It also commands a lead in the industry because of its assets and innovative capabilities. The firm continues to produce new devices and superior apps that empower the global consumer. The company was started in 1976 by three business partners named Steve Wozniak, Ronald Wayne, and Steve Jobs (O’Grady 12).

Since the year 2007, the company has been concentrating on consumer electronics and devices. Some of “the major products innovated and marketed by the company include iPhones, iPads, Mac computers, computer software, and iPods” (Hasan 11). The leading software applications include iOS, iTunes Store, and iCloud (Glowik and Bruhs 15).

O’Grady believes that Apple Incorporation has remained one of the most successful companies in its industry (89). This has been the case despite the major challenges and downturns experienced in different parts of the world. The death of Steve Jobs was seen as the end of this successful company. However, the new leaders at the company realigned every issue to do with business management. They also used the business model designed and supported by Steve Jobs.

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The same leadership philosophy has been embraced throughout the company in order to improve the level of performance. The first half of 2014 was characterized by numerous difficulties such as slow economic performances and unpredictable markets (Hasan 46). Despite such issues, the company continued to produce and market superior products to its consumers.

The concept of R&D has been supported by the corporation for years. The company’s innovators and engineers collaborate to produce superior technologies that have the potential to transform the experience of the final consumer. Every “new product at Apple becomes an immediate sensation and eventually improves the level of sales” (Glowik and Bruhs 18). The current focus on consumer electronics has been effective for this giant multinational company.

The firm has also introduced several wearable electronics in different markets. Such products have improved Apple’s performance and profitability. The firm focuses on the ever-changing needs of different consumers in every market segment (O’Grady 23). This knowledge is used to guide innovation and production of specific products.

The company uses rapid innovation to maintain its competitive advantage in the international market. The concept of innovation is used to develop new technologies that have the potential to address the demands of its customers (Johnson et al. 11). The strengths associated with Apple have been outstanding within the past decade. Such strengths make it hard for new players to compete directly with Apple. The strong brand image sustained by Apple has continued to support its marketing processes.

Hasan observes that Apple is “one of the strongest and most valuable brands in the consumer electronics and information industry” (53). Apple always introduces superior products that are supported by its strong brand personality.

This personality ensures every marketing process is capable of delivering quality results. The company has also retained standard prices for its devices. Consequently, the approach has led to high-profit margins in every market segment (Khan et al. 960). In order to record positive results, Apple hires and trains more marketers who can fulfill the needs of the targeted customers. These marketers are empowered using the best resources and incentives.

This approach has made it possible for Apple Incorporation to remain one of the leading players in different market segments. However, Apple has been unable to expand its business model in every corner of the world. The emergence of disruptive technologies is also a major challenge that might affect Apple’s sustainability and profitability (Glowik and Bruhs 39). The weaknesses affecting its marketing model might make it less competitive in the future.

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Issues Affecting the Company

Apple Incorporation is one of the leading competitors in the developed world (Hasan 34). However, analysts and marketers believe strongly that the playing ground has changed significantly within the past decade. The emergence of companies such as Samsung Group, Tecno Mobile, and HTC is something that threatens the performance of Apple. In the recent past, many people preferred “Apple products because they were deemed to be superior, elegant, and innovative” (Khan et al. 960). Today new products have emerged that are superior and capable of addressing the changing needs of many customers.

Companies such as Samsung have produced different products that have the potential to compete directly in Apple’s market segments. For example, Samsung has become the leading brand because of its Android-based smartphones and handheld devices (Kim 22). These products have changed people’s views and perceptions. Samsung has “introduced a powerful marketing approach that is characterized by fully-developed distribution networks, sustainable business practices, and pocket-friendly prices” (Johnson et al. 23). As well, the other upcoming companies in the industry have produced and marketed cheaper devices that deliver similar solutions.

These developments have transformed the nature of competition. Apple is no longer competitive because these new products are attracting the greatest number of consumers. The other unique challenge is that Apple lacks an effective distribution network. Hasan indicates that Apple concentrates on developed markets in different parts of the globe such as North America and Europe (72). On the other hand, Samsung and other emerging companies have managed to establish superior supply chains that deliver quality products to more customers in every corner of the globe. Moreover, Samsung has focused on emerging markets in China, Africa, Latina America, and Asia (Kim 39).

These markets have been characterized by many youths who are technology-savvy. The company has managed to introduce new handheld devices in order to empower more people in these emerging economies. By so doing, Samsung (and other competitors) has managed to attack Apple’s market segment.

The 2015 financial statements showed that Apple made revenues of 233 billion US dollars (“Apple Incorporation” par. 3). This profitability was a clear indication that Apple was still a leading player in the world. On the other, Samsung’s financial documents during the same period indicated that it commanded 17 percent of South Korea’s Gross Domestic Product (Kim 94). These financial statistics show clearly that Apple’s marketing strategy is becoming less sustainable. Failure to embrace new marketing processes and models will make it impossible for the firm to remain competitive in this changing global environment.

Apple is no longer commanding a lead in the consumer electronics market segment. Samsung and other companies have embraced the power of technology to produce superior devices that attack the famous Apple brand (Hasan 94). The power of disruptive technologies shows clearly that companies that fail to consider the emerging changes in the marketplace will become obsolete or less profitable.

The other “major challenge affecting Apple Incorporation’s marketing strategy is its limited distribution network” (Khan et al. 962). The company “uses a strategy known as a policy of exclusivity” (Hasan 93). This approach ensures that specific dealers are selected and authorized to market its products to different consumers. This approach has therefore made it impossible for the company to deliver its products to more customers. As well, the firm targets specific markets in developed nations. The company’s failure to consider every emerging market might affect its future performance.

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Apple Incorporation also “uses a premium pricing strategy for its devices and smartphones” (Hasan 94). This pricing strategy makes it impossible for lower-class consumers to purchase their products. The approach has continued to limit the sales recorded by the organization. The middle and lower classes represent the highest percentage of potential customers in every market segment. High-end markets are always targeted thus limiting the firm’s sales (Hasan 97). These aspects continue to make the company’s marketing model less profitable and unsustainable.

Proposed Strategies and Recommendations

Hasan argues that Apple has the potential “to remain competitive in the global market because of its superior products and brand image” (102). Many people in every corner of the globe believe strongly that Apple’s brands are still superior and admirable. This notion has established a powerful brand image that can be used to address the major challenges affecting the company’s profitability. The important issue to consider is the power of a proper marketing mix.

Marketing is the only process that delivers completed products to the consumer (Johnson et al. 12). The process also determines the profits and losses made by a company. Companies that want to achieve their business goals must always focus on the ever-changing expectations of the consumer. A powerful marketing approach should, therefore, be implemented in accordance with the needs of these targeted customers.

That being the case, Apple will have to consider the aspects of an effective marketing mix. The major issues to consider will include promotion, place, and price (Hasan 121). The promotional strategies used by Apple have been inadequate. This is the case because many people believe that the Apple brand belongs to the middle and higher classes in society. These classes comprise a small percentage of the market. Apple Incorporation’s marketers should, therefore, use the most appropriate practices and promotional approaches to ensure more people are informed about the superiority of the brand (Hasan 109). This understanding will make it easier for more potential customers to embrace the brand and purchase different products.

Competition has become a reality for Apple. This development is attributable to the business initiatives undertaken by companies such as Samsung and HTC. These competitors are delivering their products to many customers in different corners of the world. Apple should use the concept of the place to widen its distribution network. Johnson et al. believe that more customers in the developing world prefer superior brands that can support their needs (32).

Apple’s products have the potential to attract a large number of customers in different parts of the world. The company should, therefore, collaborate with different marketers and retailers in every emerging market. This move will attract more customers and eventually increase Apple’s profitability.

Pricing should also be taken seriously than ever before at this corporation. Apple is one of the companies that has benefited from the power of outsourcing. The production processes for most of its devices are outsourced in an attempt to minimize costs. This approach explains why the firm should lower its prices. Reduced prices will make it easier for more customers to purchase different products marketed by the organization (Kim 82).

A new market approach characterized by competent personnel will make a difference for this company. Many customers do not get adequate information about the major brands marketed by Apple (Hasan 31). This means that there are some weaknesses associated with the firm’s marketing strategy. A competent team will sensitize more people about the brand and eventually increase the company’s sales.

Conclusion

Apple Incorporation remains one of the most celebrated companies in the world. It also produces quality devices that satisfy the needs of the global consumer. However, the company should accept the fact that the future might be unsustainable. The current level of competition should force the company to develop a new marketing strategy that is guided by the practices undertaken by its immediate rivals such as Samsung Group (Johnson et al. 38).

It will be appropriate to rethink the current exclusivity policy in an attempt to market its devices to more potential buyers. Emerging markets also offer new opportunities that can make Apple successful. Competent marketers should be hired and trained in order to deliver more products to more customers. These strategies will make it easier for Apple Incorporation to increase its sales and profits. By so doing, the company will become the favorite brand of choice in different parts of the globe.

Works Cited

Apple Incorporation 2016. Web.

Glowik, Mario and Sarah Bruhs. Business-to-Business: A Global Network Perspective. New York, NY: Routledge, 2014. Print.

Hasan, Rajibul. Apple Inc: An Analysis. New York, NY: GRIN Verlag, 2015. Print.

Johnson, Katherine, Yang Li, Hang Phan, Jason Singer and Haong Trinh. “The Innovative Success that is Apple Incorporation.” Marshall Digital Scholar 1.1 (2012): 1-42. Print.

Khan, Usman, Noor Alam and Shabbir Alam. “A Critical Analysis of Internal and External Environment of Apple Inc.” International Journal of Economics, Commerce and Management 3.6 (2015): 955-967. Print.

Kim, Chunhyo. Samsung, Media Empire and Family: A Power Web. New York, NY: Routledge, 2015. Print.

O’Grady, Jason. Apple Inc: Corporations That Changed the World. New York: Greenwood, 2009. Print.

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