Apple and iPhone in the United Kingdom’s Market

Introduction

Internal Environment

Brand

Apple’s unique iPhone brand has won the heart of customers across the UK market. To strengthen the competitiveness and equity of the Apple iPhone brand, the company has invested in the latest technology to modify the iPhone brand as the leading technology-oriented product to appeal to the UK market and beyond.

Focus on Product Line

The focus of Apple’s iPhone product is an innovation strategy, which is embedded in the budget and product performance. For instance, in the last quarter of the financial year, the company spent 425 million dollars (3%) of its budget on R&D for the development of the iPhone 6. The R&D strategy is consistent with the company’s mission ad vision of providing quality and innovative product to its customers. The mix of basic, applied, and engineering research has been appropriate and helped in the creation of the unique product such as the current iPhone 6 and integrated iTune, which accompanies the smartphone (Dediu 2012). As a result of integrated R&D, the Apple Company has become the leading smartphone vendor and offers the latest and most advanced iPhone 6 product.

Current Position

Apple has developed a unique market niche for the iPhone 6 product in the UK, where the innovation and stylistic design of the smartphone have become a household name (Apple Inc 2016). Apple Company’s iPhone 6 generated revenue of more than $400 million in the UK market. The establishment of many stores in the UK has pushed the revenues of the company by 17% for the iPhone 6 product. The brand is trusted by many consumers across the UK, making it easy to market the product in the local market.

Marketing Activities

Apple has adopted the product development strategy of constantly modifying its iPhone product series to suit the demands of the customers in the UK. The online music store as a product by the Apple Incorporation is the first of its kind to be customised in the iPhone 6 product. Moreover, the company has introduced discount rates such as the premium, regular, and ordinary offers to customers interested in the iPhone 6 in the UK (Luck & Moffat 2011). Customers who get these discounts have to pay even lower for the products as long as the conditions within the offer are met.

Macro-Environment (PESTEL)

The UK is one of the most promising business places with remarkable expansion in the corporate world. The Apple Company has taken advantage of the favourable UK economic condition to expand its market niche for the iPhone 6 product. The stable economy of the UK has been a pull factor for the company’s products since the purchasing power of many of its potential customers is high, especially for its iPhone brand. The Apple Company is a registered business entity that is licensed to operate in the UK. This has created an easy environment for Apples’ business activities since it is tax compliant.

The recent economic boom in the UK has resulted in the growth of many businesses due to increased demand for products and services. Being one of the most strategically located businesses, the Apple Company is positioned to benefit from the economies of scale and improved revenues since it has several brands within the UK and other parts of the globe (Dediu 2012). The iPhone 6 product provided by the firm is aligned with the socio-cultural needs of customers in the UK and other parts of the globe. All aspects of the firm such as sales, purchases, marketing, management, and operations have been aligned to appropriate and sustainable technology to suit the UK market (Apple Inc 2016).

Micro-Environment

Five Forces

The threat to market entry

In the UK, the Apple’s business magnitude together with that of its main competitors such as the Blackberry, Samsung, and Microsoft are well established and would easily enjoy economies of scale to the disadvantage of a new entrant (Baltzan 2014). The Apple Company is well position to survive in the competitive PC market through gaining from economies of scale, competitive price tags, and strong customer base in the UK.

Threat of substitutes

Samsung poses the greatest threat to Apple’s existence and business performance in the UK market. In the UK PC industry, loyalty to a brand plays an important role in customer behaviour (Baltzan 2014). Therefore, Samsung can offer an alternative perfect substitute to customers who may be unsatisfied with the prices offered by Apple in the UK.

Power of suppliers

Suppliers in the UK PC industry have more power owing to the existence of many PC companies. Suppliers may instigate market demand and supply variances due to difference in price tags for different PC products (Baltzan 2014). However, the Apple Company has endeavoured to use its deep reservoirs as a strategy for balancing the supply forces in the fragile UK PC market.

Power of buyers

Apple’s performance in the UK industry depends highly on the power of the PC users. The purchasing power determines the profitability and probability of survival of a business in the short and long term (Baltzan 2014). Fortunately, Apple has developed a unique market niche from the technology gauchos and early adopter of the latest smartphone brand in the UK. Currently, the iPad, iPhone, and iTunes products have a cult-like following among the young adult UK market segment.

Rivalry

Several PC companies are operating in the same industry with virtually all of them dealing in a variety of PC products and services (Baltzan 2014). In line with this, the Apple Company has heavily invested in technological development in its smartphone product line.

Customers

The customers of the Apple iPhone 6 are the young adults who are spread across the UK. These customers are seeking for high-quality smartphone products that incorporate the latest technology. The product also targets technologically literate adults.

Competitors

Apple Inc. has come under massive competition from its arch-rival, Samsung Corporation in the UK market. Samsung, just like Apple, has massively invested in research and development, and this has resulted in the production of quality products in the UK smartphone sector. Another threat is coming from the emerging electronic firms located in China that are interested in the UK market such as Huawei, Infinix, and Tecno among others.

These firms are fighting very aggressively for Apple’s UK market share, especially through offering cheaper smartphones that perform a similar function as Apple’s iPhone series. This has affected the profitability of Apple as its market share in the UK is under constant check. While Apple is struggling to increase its market share for the iPhone 6 series, Samsung is planning to introduce a similar product in design and functionality, a move that is expected to increase the competition even further in the UK market (Apple Inc 2016).

SWOT

Strengths

The innovative nature of this firm is a primary strength that has helped it achieve massive success in its operations. The iPhone and the iPad received massive acceptance in the UK market because they were unique products. This helped in improving its popularity in the market. The ability of Apple to meet the market demands with superior products has also helped the firm to be successful in the UK market. The firm has experienced massive financial success through the sale of its products in the UK market for the last five years. The image of the firm, especially the strength of its brand, has also helped in achieving success in the UK market (Wallace 2011).

Weakness

The main weakness that Apple has faced in the market is the inability to come up with new products that are incorruptible by the competitors. The firm has been engaged in legal battles with some of its fiercest competitors over breach of its copyright. This is so because some of its high-quality products have designs that can easily be copied by the competitors. Some consumers have accused Apple Inc. of misusing online marketing platforms in the UK. The pop-up adds on e-mails and other websites have been considered irritating (Johnson, Whittington, & Scholes 2011).

Opportunities

The electronic market has been rapidly expanding over the years. The mobile phone has almost become a basic need both in the developed and developing economies. This means that Apple has a massive market that needs its products. The recent rise in population of the middle class in the UK has also offered an opportunity for this firm to sell its high-end products, which are popular among this class. The emerging technologies have offered various opportunities to Apple. Technology has improved speed, efficiency, and effectiveness of the production strategies (Wallace 2011).

Threats

The massive competition, especially from the arch-rival Samsung, should be evaluated and corrected pronto. This competition may force the firm to engage in price wars that may erode its profitability. The legal battles that Apple has had with Samsung over patent issues may also affect the operations and image of the firm. The electronic market is so dynamic that it may not be possible to predict what the consumers will demand tomorrow. Apple Inc. spends a lot of financial and human resources to research to come up with new superior products (Dediu 2012). However, sometimes the products do not last in the market before they are considered old-fashioned.

Objectives (Goals, SMART)

Specific

The iPhone 6 product has an existing market distribution channel in the UK. Applying the costing strategy, the company has reduced the prices to a certain minimum to attract customers from the targeted segment and achieve the aim of the quantity maximization by increasing the number of items sold.

Measurable

Since the target market is specific, the success variables for the UK market share expansion strategy are measured through an increase in sales by an eighth of its current output. Sales records are reviewed bi-monthly and revised after every six months. In the first six months, the market share in the UK is projected to grow by a quarter of the one-eighth mark.

Achievable

Currently, the main challenger of the iPhone 6 product is the Samsung brand in the UK. However, Samsung lacks a reliable distribution channel to the advantage of the iPhone 6 product. The current distribution channel of the iPhone 6 product consists of more than 900 distributors across the UK with each selling an average of 100, 000 phones annually. In two years, the turnover is expected to stabilize at 6,000,000 pieces which is almost 20% increase in market share (Apple Inc 2016).

Realistic

Since the current distribution channel is already developed and iPhone 6 product preference stable, the objective is very realistic since marketing resources (distribution patterns) are fully operational to facilitate a market exercise on target and segmenting position for the iPhone 6 product brand. Besides, increasing production is within reach since the projected market share growth can support and sustain expanded production (Apple Inc 2016).

Time-specific

The market share increase is to be realized within twenty-four months with periodic updates activated after every month to facilitate progress and success measurement against projections of the market share expansion objective (Apple Inc 2016). Within the twenty-four months timeframe for implementation of this market strategy, the iPhone 6 product will further penetrate the young-adults market segment whose preference for this product has been predictable in the UK market.

Strategies

Apple’s strategy in marketing its products relied on the assertion that “products don’t just perform, they exhibit behaviour” (Kane & Rohwedder 2012, par. 8). This exhibits the nature of niche marketing by focusing on the utmost premium quality that customers demand or may not know that they require at that time. The company emphasized on creating trends. Apple’s iPad and iPhone series have become a symbol of status and culture across the UK industry.

Tactics of Marketing Mix (Programme Formulation and Implementation)

Product

This Apple’s unique iPhone brand has won the heart of customers across the UK. The company has developed a highly structured marketing distribution channel to capture the fastest growing UK. The business has adopted the product development strategy of constantly modifying its products to suit the demands of the customers.

Price

Through the good, better, best pricing strategy comprising of discounts for every iPhone 6 product sold in the UK market, the target clients have increased their dependence on the company. Therefore, applying the costing strategy, the company has been able to attract customers and achieve the aim of the quantity maximization by increasing the number of Apple products sold.

Place

For the Apple Incorporation to reach the target market, the company has used television, print, and social media to announce the product across different regions where the target market is easily found in the UK. The company also has a fleet of automobiles fitted with visible posters of the company’s services and discounts.

Promotion

The marketing plan of the Apple Incorporation comprises of a detailed calendar of the business advertisement. The year is divided into three segments January-April, May-August, and September-December for the company. The company chooses to use sales promotion through discounts and issuance of redeemable points. This choice was made since it helps the company to increase its sales volume within a short period. Sales promotion ensures that consumers return to the company whenever they need Apple products.

Action

The company should develop highly structured supply chain channels that operate independently of the mother company. The value chain of Apple may comprise of four stages which are knowledge acquisition, storage, dissemination, and application. The company should formulate strict branding restrictions for these stakeholders. The regulations dictate how the advertisements will look like and the information passed across to the consumers. In return, the mobile operators will be allowed to inform their customers that they have an Apple product (Miller, Vandome, & McBrewster 2011). This will boost the performance of the product in the UK market.

Control

Apple Company relies on data mining for the creation of knowledge. It uses data mining techniques and software to obtain customers information and use this data in modifying the products to suit the demands of the clients. The company has a relatively stable functionality within a competitive advantage parameter. The existing system monitoring strategies are periodically upgraded to introduce multiple operating system models. As part of the operation management function, the model is compatible with tracking and analysis of quality aspect in the company (Witcher & Chau 2010). For the implementation of the strategy, the management balances both the short term and long term strategic goals.

Conclusion

To ensure that the UK customers remain eternally connected to the Apple iPhone brand, Apple has developed a highly structured marketing distribution channel to capture the fastest-growing youthful customer market. The company has specific goals and marketing objectives, which are integrated into the innovative nature of the company’s iPhone 6 product. Despite competition from other brands, the company has remained competitive through product differentiation, multiple branding, and integration of the latest technology in the UK market.

Reference List

Apple Inc 2016, Business Application Development. Web.

Baltzan, P 2014, Management information systems: Business driven MIS in Business Driven Information Systems. Web.

Dediu, H 2012, Apple’s International Retail Strategy. Web.

Johnson, G, Whittington, R & Scholes, K 2011, Exploring strategy, 9th edn, Prentice Hall, Alabama. Web.

Kane, Y & Rohwedder, R 2012, Apple Strives for Global Markets. Web.

Luck, E & Moffat, J 2011, “IMC: Has anything really changed? A new perspective on an old definition”, Journal of Marketing Communications, vol. 15, no. 5, pp.311-325. Web.

Miller, F, Vandome, A & McBrewster, J 2011, Pestle analysis, VDM Publishing, London. Web.

Wallace, D 2011, Knowledge management: Historical and cross-disciplinary themes, Greenwood Publishing Group, New York. Web.

Witcher, B & Chau, V 2010, Strategic Management: Principles and Practice, Cengage Learning, Alabama. Web.