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Apple is a global company in the field of innovation and electronics Featured

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Table of Contents
Product 3
Market 4
Rivals 6
Comprehensive capabilities 7
Brand power 8
Financial performance 8
Apple Retail locations 8
Tailored software and hardware systems 9
Innovation 9
Competitive strategy 10
Differentiation 10
Premium pricing 11
Blue ocean strategy 12
Recommendation 14
Executive summary 15
Reference 17

Apple is a global company in the field of innovation and electronics. Apple Inc is the first American multinational successful personal computer firm that was established in 1976 by Steven Wozniak and Steve Jobs (Apple, Inc, 2012). The company manufactures, designs, and markets personal computers, computer hardware computer software, and mobile devices such as iPod and Iphone. It also sells different accessories and peripherals such as a speaker, printers, headphones, and storage devices. Apple has been leading in the technology industry, and it manages to win its competitors through being an innovator in the technology market. In the past ten years, Apple Inc has been experiencing a dramatic increase in demands for its products and services (Jinjin, 2013). The main factor that helps the company to gain a competitive advantage is that the company usually continuously strives a new way of offering innovative products to its consumers and also tries to increase their market share. Due to several success factors, Apple has become an outstanding company in the technology sector.
In the past five years, Apple’s shares soared 255% and most investors attribute the growth to the popularity of the IPad and Iphone (Apple, Inc 2015). The company has managed to become a diversified design powerhouse that focuses on innovating products that revolutionize and define industries and also reshape the customer’s perception of the products and functionality. Regarding profit, market capitalization, consumer cachet and revenue, Apple tends to rank top. The Iphone in its seventh generation and the ninth year is seen as the company’s golden goose that tends to be generating about two-thirds of the company’s revenue (Jinjin, 2013). Some familiar Apple products such as Mac Book computers and IPad tablets tend to account for 10% of the company’s sales and the services that the company offers like App Store, iTunes, and Apple music does add about 10% to the sales.
The main market of Apple Inc is located in the western countries. The countries include United Kingdom, France, United States, Italy, Germany, Canada, China, Australia, and Netherlands. Most of the markets where the company operates are usually located in the developing countries. Among the products that the company produces, Iphone tends to be the most popular product in the developing and developed countries. The main products sold in the developing countries are usually more expensive, and they have higher technology than the main products sold in the developing countries (Apple, Inc, 2012).
Apple’s target group is people between the age of 15 and 45 who are in the high and middle living standards (Jinjin, 2013). The main products that include iPod, iPhone, and iPad are on the middle level. Their prices tend to be fit with the living level of then developing countries (Burrows, 2010). The developing countries tend to have bigger populations than the developed countries and by Apple expanding the market in the developing countries; it is a good way of increasing the company’s sales.
Apple normally operates through five operating segments which are Europe, Japan, Americans, and Retail (O’Grady, 2009). With the use of online stores and the retail stores, Apple sells its products across the world to different consumers, government, enterprises, and customers. The company does distribute its products through resellers, national and regional retailers, and wholesalers. Apple also sells most of its products and third-party products directly to customers using its sales force in its retail and online stores (Apple, Inc, 2012). This strategy as used by Apple benefits the company in several ways. The firm makes a lot of money on direct sales, and it does not have to compete against the marked-down prices that are offered by its resellers (Bajarin, 2014). Because Apple’s retail operations are the most profitable in the world, undercutting the prices for the sake of a wider distribution networking will be counterproductive.
Apple has been very important to the growth of the economic market regarding technological competitiveness. Apple has been very good to American’s competitiveness regarding the global technology leadership. The iPod kicked off the trend; however, the Iphone has managed to set it in stone. Some of the most desired consumer technology products that are bought by many people come from Apple (Burrows, 2010). Apple has managed to achieve success in the market due to developing products using unique features and a command premium price (Jinjin, 2013). During the introduction of iPod, the company was considered to be a digital company instead of a computer manufacturer. With the invention of iPod, it has resulted in a great change in the portable music technology. The competitive advantage that enables the iPod to dominate the market was the sleek design, large storage capacity, and simple user interface (Apple, Inc 2015). Each new product that Apple usually produces tends to be a new form, function, and feature.
As an organization that specializes in the design, the company has sought to redefine the boundaries of the industry through innovating products that look different from what the competitors are offering and also design products that are easy to use and are consumer friendly (Bajarin, 2014). When Apple launched its first generation of iPhone in 2007, it applied the differentiation strategy as the main strategy when the company was making a bold entry into the smartphone industry.
Apple has been able to increase its growth through expansion. With the increase in technology, Apple Inc has expanded into global markets, which have helped the company to record unprecedented levels of revenue and profits (O’Grady, 2009). One of the strategies that the company uses for international expansion is Joint venture. Apple did file for a trademark Joint Venture in China. The Joint Venture is an agreement between two or more parties to take a particular business, where the parties share the loss and profits of the enterprise. Using the Joint Venture trademark, Apple offers technical support, maintenance support, consulting services, and training services (Bajarin, 2014). The acquisition is also another strategy that Apple uses in expanding in other markets. The use of acquisition has provided the company with a competitive advantage. As Apple acquires different companies, it manages to increase the sales growth of its products through diversifying its customer’s need. In 2010, Apple acquired Siri that was a software company, which developed a voice-command technology (Apple, Inc 2015). With this technology, the company uses it in its Iphone to make a conversational interface, which greatly helped Apple to capture the attention of Iphone customers.
Apple provides a broad range of products and services, and the company tends to be a fierce competitor in several industries. The products and services that Apple Inc offers are highly competitive and Apple tends to be confronted by aggressive competition in all business areas (Apple, Inc 2015). The markets are normally characterized by frequent product introduction and the rapid technological advances that do have increased capabilities and also the use of mobile communications and media devices and personal computers.
The smartphone industry tends to be dominated by Samsung and Apple that over the last six years have taken together 88.1% of $215 billion profit generated. When comparing these two leaders, Apple took away around 62% of profits while Samsung stood with 26.1% (Jinjin, 2013). Samsung tends to be the main competitor of Apple; however, Google, which is the developer of Android software, is also a major competitor of Apple in the smartphone operating system market. Google tend to be a major competitor in several platforms including cloud storage with the Google drive against the iCloud service of Apple.
HP is also a major competitor. The firm provides hardware and software services to medium, large, and small-sized businesses across industries. HP does have an extensive range of IT products to provide, and it is Apple’s competitor in regards to computers (Burrows, 2010). As a competitor of Apple, HP does control the largest segment of the business market, but it does not provide other products other than personal computers and accessories. Microsoft is also an Apple competitor that tends to control about 94% of the operating systems (Apple, Inc 2015). The company usually makes products that last a long time and its OS is compatible with everything.
Comprehensive capabilities
Apple Inc has been a leader in innovation for a very long time. Apple may not be the first to introduce a product; however, in most times, they are usually the first to lower the price of a product and mass produce a product (O’Grady, 2009). Some of Apples competitive capabilities include high-quality customer service, innovation in mobile device technology, strong marketing team, strong brand reputation, and a strong financial performance. By focusing on these competitive capabilities, Apple has managed to create a range of core products that not only perform as a means of fulfilling a need, but also a representation of a lifestyle.
Brand power
Apple has a very powerful and a good reputation. With the super-eminent customer-focused services strategy and its aggressive advertising strategy, the excellent reputation and image have been built up among consumers. Forbes has listed Apple’s brand as the most valuable in the world (Apple, Inc 2015). Apple’s brand is the most reputable and recognizes across the world. It I the leading position in the smartphone marketplace and its wide ecosystem of products has led to the brand awareness that any other technology company cannot match.
Financial performance
Another capability of the company is its strong financial performance. From 2012 to 2015, Apple’s revenue grew on average by 16.44%, and during the time, the profits of the company grew by 27.94%. The company has been observing a successful growth, and it has managed to maintain a high profit margin (Zylla-Woellner, 2013). Both the high profit margin and the revenue growth indicate the ability of the company to manage its operations efficiently.
Apple Retail locations
The introduction of the Apple stores has offered the company with a significant physical present to act as a sales location and an advertisement. These stores usually allow Apple to tightly control the image of its brand and also offer excellent customer service. Apple tends to top most of the retailers in the in-store sales. The Apple stores are of great value to the company and success, which tend to be a relative rarity in the industry (Jinjin, 2013). The retail stores aim to ensure that the Apple personnel offer valuable services of advice to consumers and consumers also have a real touch of the products resulting in a unique consumer experience and also a direct reach to the end consumers. With the use of this channel, Apple is capable of controlling the customer experience including sales support, shelf placement, and customer service.
Tailored software and hardware systems
A major capability of Apple is its ability to develop and build highly integrative systems with software that are designed specifically for the hardware that it runs on (Jinjin, 2013). The Apple’s closed system style is normally unique in this industry, and this typically relies on the third party software. Such a capability originates from the combination of the software development teams, design teams, and hardware engineers that are employed by Apple Inc. there tend to be no other company in the industry that has a system like that of Apples, and it is likely to cost billions of dollars so as to imitate it.
Apple does focus so much on creating an innovative product that has a unique design and of high quality. Some of the innovative products from Apple are Iphone, Imac, IPad, and Ipod. The innovative aspect of the company has enabled it to gain a powerful brand name and to emerge into the electronic market (Zylla-Woellner, 2013). Such innovative spirit has greatly contributed a lot to the creation of the Apple chain of world class online, retail stores and the revolutionary iTunes Stores. As a leading innovative company, Apple has approved its capability of offering high-quality products with outstanding design.
Competitive strategy
A competitive strategy that Apple uses is product differentiation. Apple uses differentiation to separate its products from those of other electronic manufacturers. Apple employs a differentiation strategy so as to be able to target the section of the consumer market and also send a powerful message that its produces are unique. Apple does a very good job of creating products and services, which are special and unique (Meyer, 2016). The Apple brand tends to be very strong that even when the competitors catch up regarding the product performance, people still think that the Apple product is unique and different. The differentiation strategy that Apple uses helps the company to drive down costs.
With differentiation strategy, Apple products are always designed to be ahead of the market compared to its peers (O’Grady, 2009). Irrespective of high competition in the industry, Apple always succeeds in creating demand for its products and give the company power over prices through innovative advertising, product differentiation, the hype around the launch of new products, and ensured brand loyalty (Zylla-Woellner, 2013). Through focusing on the customers who are willing to buy more and maintain a premium price, Apple has been able to set an artificial entry barrier to the competitors. The differentiation strategy means that Apple is always seeking to set itself apart from competitors through features that are beneficial to the customers.
The differentiation strategy used by Apple tends to be a major strength for the company. Apple’s products are normally designed with the aim of addressing the concerns about the lifestyle of consumers that make the graphic system and design of Apple’s products to be superior to its rivals’ products in the same market segment (Meyer, 2016). Apple’s Inc software is different from other competitors, and its product’s hardware is also in the upper class. All of the products produced by Apple are made using high-quality materials such as aluminum combined with comfortable designs. All the features considered when making the products tend to make consumers feel that they have a valuable and unique product when they have an Apple product (Apple, Inc 2015). The company’s ability to differentiate its products has helped to generate a competitive advantage. The company’s ability to think differently in its design of products has helped it to keep its competitors following Apple rather than truly leading the market forward by themselves.
Premium pricing
Apple has always been a leader in the market, and its premium pricing strategy has contributed to the success of the company. The products sold by Apple are relatively expensive when compared with similar products from other companies. For instance, an Iphone may be three times or more expensive than the flagship Android smartphone of other competitors. Apple has been charging a premium price without losing sales, and still its customers love their products. Apple does not compete on equal playing ground with its competitors. Because of its differentiation, Apple normally writes its rules and come up with innovative ideas that no one dreamed of the year in year out (Zylla-Woellner, 2013). Due to the innovative capability of Apple, they have been able to charge a premium price for all of its products and the company has been enjoying remarkable sales growth and margin for a very long time. It is possible to recognize an Apple computer in the middle of hundred others because of their distinctive casing and the signature logo (O’Grady, 2009). When the computer makers are fighting for sales with low prices, Apple Inc tends to hold its ground and command premium. The pricing strategy that is used by the company tends to be effective as it prevents retailers from competing directly with the Apple’ stores (Meyer, 2016). The strategy also ensures that no one reseller do have an advantage over another. With this strategy, Apple can keep its distribution channels clean and also make more money using direct sales.
Some of the cheapest products by Apple are usually in the mid range; however, they ensure a high-quality user experience with their features. The user interface and hardware are designed to offer a lot of value for the price that ensures that profits are always high (O’Grady, 2009). The premium pricing used by the company has enabled Apple to promote and maintain a favorable perception among its loyal customers. Some Apple customers do not show any concern about the price because most of them believe that expensive products tend to enjoy exceptional reputation or it represents an exceptional quality (Zylla-Woellner, 2013). Thus, Apple usually positions its products as superior over those of its competitors. The premium pricing strategy used by the company completes its reputation of offering more innovative and superior products.
Blue ocean strategy
The blue ocean strategy tends to be a development tool that most companies use so as to gain competitive advantage and also to sustain their market position. In many cases, businesses usually succeed through focusing on the activities of competitors. However, the blue ocean strategy is commonly used by companies so as to help identify the uncontested market space (Alumair, 2016). Considering the competition in the industry, the Blue Ocean strategy used by Apple has enabled the company to increase its market cap. The blue ocean strategy has helped Apple, Inc to improve its innovative strengths (Alumair, 2016). In the case of Apple, the company has ventured in blue oceans to improve its internal processes. When using this strategy, instead of competing for head on with the market leader, the strategy does define a new market and drafts the boundaries of the space showing usability and applications.
Apple has used the blue ocean strategy to remain relevant in the digital industry. The company has experienced a problem with trading down through free file sharing network and the subscription based services (Alumair, 2016). In this situation, Apple looked across the strategic groups and realized that there was untapped demand in the channeling of digital music. Apple aimed at maximizing the opportunity through offering an extensive selection of music at an affordable price (Meyer, 2016). With iTunes music store, Apple managed to attract the potential buyers. When using the blue ocean strategy, Apple has been able to identify its pace, where it can design, sell, and increase profits using exceptional products in the potential new markets. With the blue ocean strategy, Apple, Inc has continued to introduce groundbreaking new products that are perfectly timed so as to achieve a first-mover advantage (Alumair, 2016). Apple also uses the strategy to continually reinvent itself to enter new product categories and also avoid being obsolete in the competition of maturing product markets. Apple continues applying the blue strategy, and it is always seeking to create and capture new demand instead of just competing in the market for traditional products.
Apple’s competitive strategy has focused on building strong customer loyalty through meeting the needs of the customer more effectively with their unique designs and product innovations. The strategy has been of significant advantage to the company and has kept Apple in front of the competition in the new product introduction and updates of the existing products (O’Grady, 2009). The business strategy used by Apple enables the company to control its unique ability to design and developing its operating system, application software, hardware, and services. A recommendation for Apple that can help the company improve its comprehensive capabilities is to consider developing a close relationship with suppliers.
Apple needs to know that there are few suppliers of key components needed in the personal computer manufacturing; hence, developing close relationships with the suppliers is of significant importance. Instead of searching for suppliers of a lower cost, maintaining an exclusive and collaborative business relationship can help to mitigate the power of suppliers and also lock in attractive component prices (Brassington & Pettitt 2007). Apple should also seek exclusivity arrangement with third parties. As the company continues to build a relationship with third parties and enter into exclusive arrangements with them, it will help to lock out competitors; thus, enabling Apple to gain favorable business deals.
Apple has to continue innovating so as to maintain a competitive advantage because its business is highly dependent on rapidly changing technologies. The company operates in an industry that experiences high levels of completion and because there is a high presence of well-established players, for Apple to survive, it cannot afford to be complacent (O’Grady, 2009). Apple is usually known for developing products that are unique and user-friendly. Therefore, a recommendation for the company is to continue tailoring their products in simpler ways so as to make it easy for users of other platforms to build a comfort level that will attract them to the Apple products. Such an incident is very common in the PC industry where the traditional users of Microsoft tend to have difficulties adjusting to Mac. Therefore, Apple should consider a better way that will make the transition from PC to Mac easier.
Another recommendation for Apple is to continually invest in research and development so as to stay ahead of and lead the radical product and technology discoveries. As Apple Inc is following the blue ocean strategy, the future of the company tends to be highly dependent on its ability to continue developing improvements in the products and technology (Zylla-Woellner, 2013). Therefore, if Apple happens to fail to produce commercially viable innovations to enter the market as a fast mover, it should consider expanding its range of products and intellectual property through the acquisition of businesses, licensing, or joint development projects. Another way of improving the firm’s comprehensive capabilities is through continuing with the wise expansion of Apple stores. The Apple retail stores have been very successful and Apple can further this success through establishing new locations in the United States and abroad. With implementing the expansion, Apple needs to be very careful so as to avoid over-saturation so as to maintain their status as being a destination.
Executive summary
Apple is an innovative company that serves different industries including computer hardware, consumer electronics, computer software, and digital distribution. Apple Inc operates in more than 120 countries around the world. Apple has opened retail stores in more than 18 countries around the world. The primary competitors of Apple are, Samsung, Dell, Microsoft, Google, and many others (Zylla-Woellner, 2013). Irrespective of the competition, Apple has remained relevant to its customers and has emerged as a market leader in the industry. The company continues developing new products and technologies, and it also enhances the existing products that tend to expand the range of its product offering and the intellectual property through acquisition and licensing. Based on this analysis, it is clear that the main idea used by Apple revolves around the highest value deliver for its consumers. The competitive strategies used by the company has enabled the firm to provide high-end products as luxury technological advancement items for its consumers who are willing to pay a relatively high margin. Apple's competitive capability is that it maintains a close relationship with its mass customer segment and through the stand-alone retail store that tends to provide for value added (Zylla-Woellner, 2013). Apple has set apart from its competition by the combination of innovative idea, successful retail strategy, premium pricing strategy, strong brand image, product differentiation, and its financial performance. While there are several other factors that provide the company its competitive advantage, these factors tend to lead to its astounding success. For Apple to continue leading in this industry, it’s competitive strategy need to evolve.

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