Apple Company Viability

Executive Summary

Apple Company has been in the PC market for more than two decades. The company is known for its innovative products and technological excellence. The company has products which perform well, such as the iTunes and the iPhone brands.

Since the Tech Shield Company has excess funds to invest in a feasible business, this research will review the viability of the Apple Company in terms of financial overview, current market situation, and business strategies. These variables are vital in establishing the sustainability of Apple’s business strategy against the focused returns on investment. Through an explicit analysis of these variables, the Tech Shield will review the potential of the Apple Company to sustain the proposed investment.

Apple’s Financial Overview

The Apple Company has enjoyed stable growth over the last five years with the highest growth rate recorded in the year 2011. Reflectively, the company’s revenues have steadily increased from 48,678 million dollars in the year 2009 to 170,910 million dollars by the end of the year 2013. Fortunately, the company has not experienced any loss over five years.

The profit for the company has increased steadily over the period with the highest profit recorded in 2012 as 68,662 million dollars. The stock prices have also been on an upward trend with the highest price recorded in 2012 as 644 dollars. From the above overview, it is apparent that the Apple Company has experienced steady growth over the years, despite the serious economic meltdown of 2009 (Google Finance 2013). This is summarized in the table below.

Apple’s 5-year Financial Performance

Years 2009 2010 2011 2012 2013
Revenue 48,678 65,225 108,249 156,508 170,910
Profit 23,678 25,684 43,818 68,662 64,304
Profit Margin 23.2 24.1 25.2 26.3 24.1
Growth Rate 4.3 48.1 45.3 34.1 32.6
Stock Price 213.95 326.66 426.70 644.00 549.42

(Source: Google Finance 2013)

Current Marketing Situation

Market Description

Segmentation

Consumer segment

The Apple retail model targets PC consumers who form the majority of its market catchment. Since this target group frequents Apple distribution stores, the company is in a position to conveniently direct the customers to their designated delivery points and stores without having to deliver directly. The company has merged the strategy with advertisements since this group of consumers has access to social media.

Due to exposure to information sources such as newspapers, television, radio, and magazines, product announcement through these avenues has enabled the company to double its market base (Apple Inc 2014). The decision on the best product relies on information feedback after multiple exposures to different competing products.

As forecasted in the market research, this strategy has been successful towards dominance as it offers a variety of options to consumers, while at the same time, maximizing benefits of economies of scale to the company (Apple Inc 2014). Apple’s innovative products are among the most visible PCs across the globe.

Business segment

The Apple Company has a partner which medium businesses are retailing products similar to those of its competitors, such as the PC retail stores across the US. This strategy has enabled the company to expand its market, and besides making it easy for customers to access the products.

To attract this segment, the company offers free delivery, delivery on credit, and a series of discount based on the sales volume from retailers. Since it is properly implemented, the company is well-positioned to counter the Samsung strategy of reaching the customers through proxy retailers (Jobber 2012). This strategy will ensure company sustainability amidst competition.

Targeting

Apple Company is currently the leading PC retailer in the global computer arena and offers some of the latest and most advanced personal computers and smartphones. Every household consists of potential customers of Apple since computers and phones have become basic needs. Recent studies indicate that the majority of this population recognizes the need for affordable, efficient, and reliable PC (Apple Inc 2014).

Thus, the most attractive segment to enter for the company would be a business segment to make the product easily available to the customers. This strategy has ensured that the company is steady in expanding its market in all the continents without having to incur the cost of renting retail premises. Besides, the company is in a position to micro-manage its operations from a single distribution point (Jobber 2012).

Positioning Strategies

In the overcrowded global market for PCs, product position is directly linked to the success in the short and long term, especially for the Apple products. To achieve the desired goals, Apple has positioned itself to emphasize the difference between its products and those of its competitors.

To diversify market operations, Apple Company has continued to create multiple brands through its innovative team to keep the company ahead of the other competitors such as Samsung, Nokia, and Motorola (Apple Inc 2014). This has created an environment of its competition and blocked other competitors from encroaching into the company’s local and global markets (Jobber 2012).

Product Review

Product development entails the innovation process aimed at modeling the existing product or improving on it to balance with the changing preferences of the customers. As a result, the older version will be phased out of the market as preferences change. Apple is the leading company in the PC industry in terms of design and innovation (Apple Inc 2014). The company is associated with innovations and attractive designs that appeal to its customers across the world.

The Apple Company has benefited from this strategy in terms of market expansion, especially among its early adopter customers. Specifically, through product development, the Apple Inc Company has been in a position to optimally exploit opportunities available in the innovation market segment and has gained a significant share in the mobile PCs market at the global level (Jobber 2012).

Competitive Review

The 5Ps of the marketing mix is defined by Product, Place, Price, and Promotion, and People as part of market segmentation. The Apple’s iTunes, iPhone apps, and iPad apps give the company a competitive advantage over its competitions since it is in a position to create a barrier for its competitors by proliferation the products (Apple Inc 2014).

For instance, this strategy was beneficial for the Apple Inc Company when it became the first company in the world to provide online music services through its iPod and iTunes products. As the first in the online music service, the company reaped from the first-mover advantage and expanded to countries such as China, the UK, and South Africa (Apple Inc2014).

Apple’s strategy in marketing its products relied on the assertion that “products don’t just perform; they exhibit behavior” (Jobber 2012, p. 34). 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 emphasizes on creating trends and affordable prices.

Apple’s iPad and iPhone series have become a symbol of status and culture across the global PC industry (Apple Inc 2014). To boost the revenues for the company through increased market share, it is vital to review the latest market data on customer preference in the market segment. Thus, through effective advertisement, the target segment is projected to increase their purchase of the Apple products. This variable indicates that the company has unlimited potential for growth.

Channel and Logistics Review

The company has developed a highly structured marketing channel that operates independently of the mother company. As a result, the company has been in a position to capture the fastest-growing markets such as France, the UK, China, and Japan, where the innovation and stylistic design of Apple iPhone 4 have become a household name. Apple Company’s stores have improved on their performance to $19.1 billion by the end of the year 2013.

The establishment of many stores outside America has pushed the revenues of the company by 17%. At present, “the Apple stores are a key part in major cities. There is a community effect that’s quite powerful” (Jobber, 2012, p. 28). The structured marketing channel has managed to penetrate the following markets, as indicated in the pie chart below.

The product development variables at the Apple Inc Company are connected at the central point of strategic planning, which encompasses cost, speed, quality, flexibility, and dependability. The variables are meant to create a smooth continuous operation tracking model in the competitive PC industry. Therefore, the major part of the success puzzle for operations management strategy operates on the periphery of the soft skills involving the timeless vision of organizational principles, defining the value of the business, and determining requirements.

Besides, the operation strategy helps in clarifying the vision, building teams, mitigating task, resolving issues, and providing direction as incorporated in the operations management system of Apple Company (Jobber 2012). In line with this, the Apple Company has heavily invested in technological development in its smart PC product line.

The corporate strategies of the Apple Company are based on production, marketing, human resource, and efficiency monitoring units that are distributed to meet the global business standards. The Apple Company has been able to open an average of 40 stores per year across the world since 2003. This is a clear indicator of growth in the company’s market share. This has been possible through the introduction of the unique iPhone brand that has won the heart of customers across the world.

Through modification of the iPhone brand of the Apple Company products, the company has been declared “the fastest international roll out” (Apple Inc 2014, par. 21). Through this, the company’s revenues have grown by 32%. In the year 2013, the iPhone 5 introduced by the company became available in more than 64 countries within one month.

Business strategies

At its inception, the Apple Company concentrated in the local market of America. The company has experienced growth in the last ten years and has substantially expanded its markets beyond the traditional domestic market of America. At present, Apple is one of the most profitable international companies in the global business arena.

Apple controls a substantial share of the mobile communication market across the global PC industry. To survive and control a sizeable share of the global PC industry, Apple Company has endeavored to remain competitive through the non-competitive business strategy.

Reflectively, product proliferation as a strategy is designed to create opaque barriers for other competitors. This strategy has been beneficial for the Apple Company since it has always maintained the market leadership position, by becoming the first company in the world to provide online music services, through its iPod and iTunes products.

As the first in the online music service, the company reaped from the first-mover advantage and expanded to countries such as China, the UK, and South Africa. Later, other companies’ endeavor to participate in this niche only decreased rivalry as the competition was increased.

Conclusion

Conclusively, the Apple Company has a strong presence in the global PC industry. The company has successfully used business and generic strategies to ensure a competitive advantage over its rivals such as Samsung, Nokia, and Blackberry, among others. From the analysis, it is apparent that the Apple Company has unlimited potential for growth.

Besides, the company concentrates on products that are unique and technology-dependent by emphasizing on creating trends. Apple’s iPad and iPhone series have become a symbol of status and culture across the global PC industry. Considering the stable financial performance, product innovation, and sustainable business strategies, I would recommend the Tech Shield Company to invest in the Apple Company.

References

Apple Inc. (2014). Business Application Development. Web.

Google Finance. (2013). Apple’s Financial Performance. Web.

Jobber, D. (2012). Principles and practice of marketing. New York, NY: McGraw-Hill Publishers.