Overview of the company
Apple Inc. is one of the leading companies in the technology industry where it specializes in the production of electronic gadgets. Steve Jobs, Steve Wozniak, and Ronald Wayne incorporated the company in 1975 with its initial product being solely the Apple personal computer kit (Chang, Chen, & Zhou, 2009). At the time, the company’s operations were limited to the United States where it was headquartered.
However, after years of producing and selling the personal computer kits, the company expanded its line of products to include more electronic goods such as mobile phones. The expanded line of products facilitated its entry into the global market, and today, it has subsidiaries in different parts all over the globe. Being in the technology industry, the company manufactures and sells mobile and media devices, which have gained much acceptance amongst customers across the globe (Walker, 2007).
Besides, the company also markets a variety of software and it provides networking services. The company has built great confidence among its customers due to its strong brand equity, and customers tend to buy the products only because they are Apple branded.
Since its inception, the company has remained innovative, and it has continuously introduced new products into the market at close intervals. The company’s penetration into the Smartphone industry was a major boost to its mission of becoming the global leader in the technology industry. The company’s Smartphones have dominated the mobile phone industry apparently due to their exceptional customer experience. One of the brands that have pushed the company ahead of the rivals is the iPhone Smartphone. Currently, the firm has about six different types of iPhones, all with diverse features (Yang, Chang, Chang, & Ho, 2014). The company has tipped the possibility of introducing a more improved Smartphone, the iPhone 7, which is expected to take the Smartphone market by storm.
Overview of the iPhone 7
According to the Apple’s website, the company is set to launch one of the most recent Smartphones in its list, the iPhone 7, in September 2016 (iPhone 7 news and updates, 2016). The new Smartphone is a product of intensive research by the company, and it is expected to be an improvement of the iPhone 6. As it has been the trend over the past decades, the company innovatively adds additional features to the existent Smartphones to increase the customer experience. The company plans to launch three different models of the said Smartphone contemporaneously with the following labels – iPhone 7, iPhone 7 Plus, and iPhone 7 Pro (iPhone 7 news and updates, 2016).
The three models are expected to retail at different prices depending on the individual features, with the iPhone 7 Pro selling at a premium. Some of the leaked features present on the iPhone 7 include dual lens camera, scratch resistant screens, high-quality camera, virus resistant software, and a smart connector, which allows connected peripherals to share power and data contemporaneously.
This paper focuses on developing a marketing plan for the latest Apple’s Smartphone, iPhone 7. To achieve the stated objective, the paper analyzes the internal and external environment of the firm with specific reference to the iPhone 7. The analysis of the internal market is achieved through an assessment of the strengths and weaknesses (SWOT) of the brand. On the other hand, the external environment of the firm is assessed using the PESTEL tool that assesses the political, economic, social, technological, environmental, and legal environment of a firm or product. Lastly, the paper analyzes the competition in the industry using the Porter’s Five Forces tool.
Overview of the product (iPhone 7)
Internal environment analysis
|Strengths ||Weaknesses |
|Opportunities ||Threats |
Table 1: SWOT analysis.
One of the iPhone 7’s major strengths comes from the company’s strong brand equity. Since its inception, the company has maintained a good name among the customers. Therefore, the consumers tend to buy the firm’s products just because they are Apple branded (Burrows, 2010). Apple has a history of introducing highly inclusive Smartphones whenever it launches new products into the market. Besides, the iPhone 7 has a patented touch screen that is one of its kinds in the current Smartphone market. Additionally, the Smartphone has additional features that make it attractive to the customers. Some of the notable features include scratch-resistant screens, high-quality camera, and virus-resistant software.
The greatest weakness of the Apple’s iPhone 7 is its high price. The Smartphone is the most recent product among the existing iPhones, and it has exceptional features. The added features are a result of high investments in research and development (R&D) which translates into the high prices (Chang et al., 2009). Therefore, the phone is not affordable to the low-income earners who make the largest group of the target population, the youths. The other weakness is the bad brand reputation amongst entrepreneurs. It has been argued that the iPhone’s features are not compatible with the corporate environment.
Apple’s iPhone 7 stands to gain a considerably high market share across the world due to the rapid evolution of the middle class. The mentioned group of people is ready to pay a premium price for a quality product (Mylonas, Dritsas, Tsoumas, & Gritzalis, 2011). The size of the middle-class has been growing over the past few decades presenting a good opportunity for the company to expand its new Smartphone’s market. Moreover, the rapid embracement of the Internet across the globe is a great strength for the company. The Internet allows firms to market their respective products at reduced costs. Apple may utilize the Internet for promotional purposes to lower the marketing costs hence reducing the prices for the product. Lastly, the company may partner with the various industry players across the globe to ease its penetration into the global market.
The company’s iPhone 7 faces great competition from other Smartphone companies across the globe. Reputable companies such as Samsung, Palm, Sony, and Blackberry have Smartphones in the market, which poses a great challenge for Apple (Yang et al., 2014). Changes in legislations may also affect the turnover of the iPhone 7 in the future. Some individuals are concerned that Smartphones contribute to environmental pollution if poorly disposed.
External environment analysis
Apple is an international company, which derives about 52% of its total revenue from foreign countries. In that regard, the political situation in the respective countries of operation may affect the firm’s iPhone 7 sales. The challenge may be complicated by diplomatic rows between the US and any country in which Apple has an established market. Under the World Trade Organization, the member countries are obliged to prevent the violation of copyright rights. However, the concerned country carried the responsibility of enforcing the principles of copyright protection. Therefore, political animosity between the US and other countries may offer an incentive for Apple’s copyright rights infringement. Internal political conflicts may equally affect the iPhone 7’s sales.
Apple’s iPhone 7 is set to retail at a considerably higher price than the previous iPhones owing to the huge investments made in R&D. The highly priced iPhone penetrates the global market against the backdrop of the slowdown in the economy of the developed countries. Therefore, Apple must seek to establish new markets in the developing countries to diversify risks (Trelease, 2008). Besides, the Smartphone sales may be affected from time to time by the economic downturns that are experienced globally during certain times such as the 2008/9 economic meltdown. Currency fluctuations may also be a great challenge for the newly introduced iPhone.
Apple’s iPhone 7 is designed to fit the lifestyles of the youths who like being associated with classy Smartphones. Apple’s iPhone 7 meets the needs of the youthful customers. Its software allows the installation of mobile game apps that most youths value. Additionally, it has a strong Internet connectivity, which enables the customers to access high-speed Internet and the social media. Therefore, the phone’s features favor the social lifestyles of the majority of people across the globe hence the phone is set to gain much acceptance.
The technological factors are set to present both opportunities and challenges for the iPhone 7. One of the advantages of the technology to iPhone 7 is that it presents an opportunity for the company to market the product at a lower cost through the Internet. The Internet-based marketing will facilitate the reduction of the advertisement costs and allow the collection of the customers’ feedback. Such feedback may be used to seal the gaps in customer satisfaction.
However, inasmuch as the technology favors the iPhone 7’s marketability, it also presents challenges. The rapid technological advancements pose a great challenge to the future of the Smartphone as they facilitate the introduction of highly innovative products into the market by the rivals. The absence of barriers to entry and the less emphasis laid on the copyright infringements may favor the rivals hence heightening the competition in the industry.
The environmental pollution may be a great challenge in the future of the iPhone 7 across the globe. The Environmental Pollution Authority (EPA) has linked the Smartphones’ industry to environmental pollution (Mylonas et al., 2011). This observation may lead to the enactment of strict legislations to control the vice against the backdrop of the climatic changes being experienced across the globe. The company has to guarantee the customers and the authorities in countries of operation that it will control the pollution caused by its products. This goal may be achieved through buying back the used phones at the end of their life cycles.
Given that the iPhone 7 is set to sell globally, changes in legislations may affect the company’s sales in the future. Some of the legislations that may greatly affect the company are laws touching on importation and levies (Trelease, 2008). In countries with protectionism laws, the company may be forced to set the prices of the iPhone 7’s high hence making it unattractive to the consumers.
Porter’s five forces analysis
The company faces heightened rivalry from its competitors who include Samsung, Palm, Blackberry, and Sony mobile. The listed companies have their products in the market, which have similar features as those in the iPhone 7. Besides, the firms are big enough to enjoy the economies of scale, which lowers the operations costs leading to competitive pricing (Schultz, Wulf, Zarnekow, & Nguyen, 2011).
Suppliers bargaining power- low
Apple is a big company with subsidiaries in many countries across the globe. Additionally, the company’s products have wide acceptance among the customers, which facilitates high turnover (Trelease, 2008). Therefore, the company can procure the raw materials in bulk to enjoy purchase discounts. Moreover, competition among suppliers increases the company’s choice.
Availability of substitutes- moderate
Reputable companies, which take advantage of the technology advancement to create powerful phones, dominate the Smartphone industry. Therefore, the customers have a wide variety to choose from during purchase. However, Apple’s iPhone 7 is considered more powerful than the rivals’ Smartphones owing to its additional features.
Buyers’ bargaining power- High
The buyers’ bargaining power is high owing to the availability of substitutes. The customers have a wide choice to choose from based on the quality and the prices of the products (Burrows, 2010). Hence, iPhone 7 may encounter resistance from customers if the prices are overly high.
Threat of new entrants- Low
Currently, the Smartphone market seems saturated owing to its domination by big firms such as Apple, Samsung, Palm, and Blackberry. The firms control about 90% of the market and they are big enough to benefit from the economies of scale (Walker, 2007). Therefore, a new entrant may be suppressed before it establishes a profitable market share.
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