Summary
Apple Inc. is a prominent technological company headquartered in Cupertino, California. Initially started by Steve Jobs and Steve Wozniak, the corporation is now recognized worldwide for its emphasis on innovation and its wide variety of unique products, such as the iPhone, Mac, and iPad. The company’s market value has grown at a tremendous speed during the last few years. Apple Inc. is a lucky member of the Fortune 500 and now proudly takes first place as the company with the most significant market capitalization in the whole tech sector. The company’s smart marketing strategies make it invisible, allowing Apple to expand further and win consumer loyalty worldwide.
Multiple factors, such as reputation, client satisfaction, sales, and strong brand, are highly reliant on advertising in the age of fierce competition. Apple is not an exception since the company is regarded as unbeatable. Starting from a small computer company in the garage, Apple managed to become one of the too big to fail enterprises with an extensive client base, strong brand image and reputation that precedes it. Steve Jobs was widely regarded as one of the most creative entrepreneurs in the tech industry’s history. Now, Jobs’ successor, Tim Cook, continues to maintain and boost the indicators and figures.
To start with, the VRIO framework that emphasizes the strengths and weaknesses of companies in order to define the competitive advantage captures the in-depth analysis and position of Apple in the market. Apple’s sector counterparts in both the smartphone and software sectors are countless. The competition for market dominance in the smartphone industry has become especially heated, with Samsung and Huawei being the company’s primary opponents (Van De Vliert, 2021). Nevertheless, there are key strategies that help the company facilitate its brand image and maintain popularity.
Diversified Product Portfolio
Apple Inc.’s wide and inventive range of products is one of the critical factors of success. While the smartphone is the business’s biggest product, accounting for more than half of its yearly net income, Apple has also introduced other computer, multimedia, and technology devices such as the iPad, Apple TV, Macbook, Apple Watch, and a vast choice of additional benefits (Kabeyi, 2018). The revenue of the company from products has grown substantially since 2019. Therefore, a company that once started with only one product now grows substantially each year.
Apple’s revenue from iPhone sales was $142.3 billion in 2019 (Curry, 2021). While many companies struggled during the pandemic, the revenue of Apple in 2020 experienced a mild decrease, resulting in $137.7 billion and experiencing an incredible increase in 2021, bringing $191.9 billion to the company (Curry, 2021). Meanwhile, Mac revenue was $24.7 billion in 2019, and the figure increased over two years, resulting in $28.4 billion in 2020 and $35.1 billion in 2021 (Curry, 2021). Thus, such figures show the demand for the company’s products, allowing it to diversify its portfolio further.
As a result, a diverse product portfolio boosts the corporation’s earnings growth. Apple products are mostly luxury items, and the corporation’s high-profit margins on every item cannot be surpassed by many other companies offering comparable goods or services. The distinctiveness and reliability of these items are a source of long-term competitive advantage for the organization, along with the basis for its recognition and success.
Innovation as the Driving Force
Nevertheless, Apple’s dominance in the tech industry is built not only on its significant sales of the products. Apple’s products are not able to provide a competitive edge unless they are distinctive and remarkable. Therefore, the corporation’s commitment to innovation is another crucial factor of success and competitive advantage. The company’s product line is known for its simplicity, as well as its convenience, which piques the interest of the customers.
As a result, all of Apple’s goods are in the highest demand. Organization’s goods mostly appeal to upper-class and upper-middle-class clients. Apple’s top items are priced accordingly. These goods, notably the iPhone and Macbook, are immensely popular and in great demand in many countries around the world due to their superior features and functionality. Excellent quality of the product is not only a determinant of demand but a determinant of profit (Amron, 2018). Furthermore, the superior quality of these items distinguishes them as one-of-a-kind and irreplaceable. A significant portion of the praise is also due to the operating system contained within these items. The company’s iOS and Mac OS are the major factors of distinction and demand boosters for the most important products.
The key objective of the company is to not only provide the customers with an unforgettable experience of the products but also make a change in their lives. Commercials and “Think different” campaigns are fundamental marketing strategies in this situation and reinforce the popularity of the products (Payne, 2017, p.53). Additionally, Apple strives to not only simplify everyday activities but to make a long-term impact by introducing artificial intelligence technology to customers and paying attention to long-term market trends.
As per Apple’s financial statements, the service ratios have grown between 2017 and 2020. While the company continues to release a variety of new goods and advertises them aggressively, these products will come into closer touch with customers’ lives and are progressively becoming the focus of consumers’ interest (Chen et al., 2021). Furthermore, innovative wearable technology will gain popularity around the world. According to estimates of Forbes, such gadget sales will increase and double in 2022, “which will have 233-million-unit sales and create a $27 billion market share” (Chen et al., 2021, p.3057). Thus, Apple’s concentration on innovative in-demand items will prove to be the most lucrative.
Additionally, the company’s success with Apple Watch and AirPods and strong consumer engagement demonstrate Apple’s opportunities to grow in this industry. Furthermore, independent growth is exceptional in the mobile sector. Apple has a chance with self-driving software technologies. Rather than manufacturing a standard automated vehicle, Apple may concentrate on artificial intelligence research and development (Chen et al., 2021). This approach to creating innovative products gives the company a chance to increase revenue.
International Expansion
Apple Inc pays immense attention to innovative marketing worldwide. It uses a variety of advertising networks for advertisement and branding. In 2018 the company had approximately 498 retail stores in 22 countries (Marrero, 2018). Nonetheless, the primary reason for its marketing method’s effectiveness is its emphasis on consumer loyalty. As mentioned before, Apple makes one-of-a-kind and creative goods, and its marketing approach is similarly inventive. Not only does the company uses digital means of promotional campaigns, but it also performs a lot of advertising via its own retail stores.
Since Apple has a worldwide approach, it is a part of the international standards strategy inside its corporate structure. The only alteration Apple makes to its devices in order for them to be sold abroad is the power source (Tien, 2019). Apple Inc.’s concept and manufacturing are regulated and handled by a single source (Tien, 2019). This technique has provided Apple with several benefits since it allows the company to enter new markets without modifying anything in the structure that oversees or manages its operations around the world (Tien, 2019). As a result, this practice turns out to be less expensive. Apple does not have to adapt to a particular country’s culture or lifestyle since it offers identical products to its clients.
Nevertheless, there might be a threat to the company involving international trading. Nowadays, global trading operations involve all kinds of goods transported worldwide and account for a significant percentage of almost every company’s revenue (Chen et al., 2021). Therefore, the revenues of such companies are tightly linked to a global supply chain. Many scholars argue that supply chains need to innovate in order to avoid uncertainties (Lockamy III, 2017). In case of disruption in the global supply chain, companies might experience financial problems. Especially during the pandemic, the situation might become aggravated.
Apple’s supply and production networks are, without a doubt, heavily reliant on China. Furthermore, the taxes remaining from the trade conflict between the United States and China will have an ongoing influence on the gross margin (Chen et al., 2021). According to the financial statements of Apple, the company experienced a mild setback in revenue in 2020. However, there are no guarantees that the corporation will not be susceptible to such incidents in the future.
ICON Matrix
As a result, it is clear that Apple employs a customer-oriented marketing strategy that involves collecting, processing, and analyzing consumer data, which has a beneficial impact on company performance. By focusing on consumers and their wants and needs, the firm increases its feeling of obligation in customer relationships, boosts customer information exchange, and makes it simpler to increase sales (Hsu et al., 2021). This method has proved to be effective throughout the years and sales growth follows stakeholder satisfaction since the company looks more attractive with positive indicators.
Additionally, keeping up with trends and innovation should be mentioned. On the one hand, the corporation satisfies customers’ needs, providing them with high-quality products. On the other hand, Apple delves deeper into innovation trends, conducting its own research and expanding its product line. Recent developments in automated vehicles will increase the stakeholder interest in the company. Therefore, by focusing heavily on artificial intelligence and robotics, Apple will be able to spread its influence and make a change. Such kind of competitive advantage drives the financial success of Apple.
Therefore, according to the ICON matrix, Apple should concentrate on shaping. In this situation, innovation shapes the market, and this technology-driven company relies on such innovation. Furthermore, prospective buyers may not realize they need or desire the advantages of a given invention until it becomes accessible. This approach is founded on the premise that, under specific conditions, innovation characterizes human needs and, as a result, dictates the nature of consumer demands by introducing new goods or services that cause changes in core behavior. Subsequently, by maintaining a customer-oriented approach and relying on innovation implementation, Apple will continue to be one of the driving forces of the technology sector.
Recommendations
Since the product line of Apple is aimed at consumers who are passionate about technology, the company has to broaden the market with many consumer products by introducing more functions fit for various occupations. As a result, paying attention to both the convenience and usability of the devices may help the firm engage more customers. As seen before, the sales of the iPhone have been increasing. However, the sales of Mac have been lagging behind, which should push the company to eliminate the concerns of clients and make changes to make the systems and products more convenient.
Moreover, Apple is confronted with numerous trade-related concerns, including national security obstacles. As a result, in order to enter markets of various countries, Apple should collaborate with firms in that country. Apple should leverage its possibilities to improve branding and marketing and push its capacity to extend its distribution network. In order to acquire the correct supply, Apple must carefully analyze consumer demands.
Hence, being the company with the most significant capitalization in the technology sector, Apple proves to be one of the most efficient companies. The corporation is customer and innovation-oriented, which helps it grow its revenue and sales year after year. The critical factors of Apple’s success are a diversified product portfolio, international expansion, and incorporation of innovation. While having opportunities like artificial intelligence and robotics development, the company might experience financial setbacks in view of the pandemic and trade-related policies. Therefore, the recommendations for the company would focus on these aspects. According to the ICON Matrix, the company needs to continue developing its products and introduce innovative technologies. However, the company needs to enter international markets and extend distribution networks.
Reference List
Amron, A. (2018) ‘The influence of brand image, design, feature, and price on purchasing decision of Apple iOS smartphone in Surakarta, Indonesia’, The International Journal of Social Sciences and Humanities Invention, 5(12), pp.5187-5191.
Chen, X., Liu, Y. and Gong, H. (2021) ‘Apple Inc. strategic marketing analysis and evaluation’, Atlantis Press, 607, pp.3053-2060.
Curry, D. Apple Statistics (2021). Business of Apps. Web.
Hsu, T.H., Her, S.T., Chang, Y.H. and Hou, J.J. (2021) ‘The application of an innovative marketing strategy MADM Model—SIVA-Need’, International Journal of Electronic Commerce Studies, 13(1), pp.33-68.
Marrero, A.G. (2018) ‘The rise of Apple Inc.’, Journal for Global Business and Community, 9(1), pp.2-12.
Kabeyi, M.J.B. (2018) ‘Michael Porter’s five competitive forces and generic strategies, market segmentation strategy and case study of competition in the global smartphone manufacturing industry, International Journal of Applied Research, 4(10), pp.39-45.
Lockamy III, A. (2017) ‘An examination of external risk factors in Apple Inc.’s supply chain’, Supply Chain Forum: An International Journal, 18(3), pp. 177-188.
Payne, B. (2017) ‘Brand positioning and its usefulness for brand management: The case of Apple Inc.’, Newcastle Business School Student Journal, 1(1), pp.51-57.
Tien, N.H. (2019) ‘International distribution policy comparative analysis between Samsung and apple’, International Journal of Research in Marketing Management and Sales, 1(2), pp.24-27.
Van De Vliert, D. (2021) ‘Apple iPhone: A market case study’, MacEwan University Student eJournal, 5(1), 1-12.