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Apple Marketing Strategy

In: Business and Management

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Vision and Mission Statement

Apple, Inc.’s Vision Apple, Inc.’s vision is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and
Internet offerings

Apple's Mission Statement

Apple Computer is committed to protecting the environment, health and safety of our employees, customers and the global communities where we operate. We recognize that by integrating sound environmental, health and safety management practices into all aspects of our business, we can offer technologically innovative products and services while conserving and enhancing recourses for future generations. Apple strives for continuous improvement in our environmental, health and safety management systems and in the environmental quality of our products, processes and services.

Various Management Objectives at many different Levels

Apple, Inc.’s Business Strategy and Goals

The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative design. The company believes continual investment in research and development and marketing and advertising is critical to the development and sale of innovative products and technologies.

As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-party digital content and applications through the iTunes Store. As part of the iTunes Store, the company’s App Store and iBook store allow customers to discover and download applications and books through either a Mac or Windows-based computer or through “iOS devices,” namely iPhone, iPad and iPod touch. In January 2011, the Company opened the Mac App Store to allow customers to easily discover, download and install applications for their Macs.

The company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings. The Company’s strategy also includes expanding its distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience.”(Apple’s Annual Report, 2011).
Now that Apple Inc.’s strategy and goals have been shown, a look at what effects the decisions of the executive staff in regards to the general environment is needed.

Business level strategy
When we talk about business strategy, we have to talk about the cost. Apple has made their costs to the lowest they could offer, but still high in the market. But their strategy is that when every newer generation is released, the older generation gets 100 dollars off from the original price. This means that the version that is two generations before the newer version is free with a plan provided by either AT&T or Version. This attracts many costumers for returning to Apple generation after generation. As we all know, Apple has 394 retail stores over fourteen countries. This is quite unbeatable by other companies. It is a technology based company, but they made it seem like a well-known luxury clothing brand that opens retail stores all over the world. This business strategy surely gained them success in money making, because not only people in the United States demands for Apple, but people all over the world are demanding for their products, maybe even more.

Corporate Management Objectives

The business model for the iPhone is that Apple controls and coordinates the portions of the value chain where they can add value, leaving the other areas to organizations with specific competencies. In this way, Apple maintains control, but is able to provide a better product/service to consumers. Within the business model, Apple controls and coordinates the device, platform, application portal, online/offline mediation as well as acting as a service provider through the applications they develop for iPhone. Apple controls the pieces of the value chain where it has core competencies, leaving the network provision to AT&T and majority of service provision (i.e. application development) to third parties.

A business environment can be defined as internal and external factors that affect it profitability and growth. Its important for business to always carry out business environmental analysis to understand their environmental competitor at present time to formulate the best current strategies to compete with them.

External Environment Analysis
These are factors that the business organization cannot control but they can minimize the risk
The external factors can be evaluated using PEST i.e politic factors, economic factors, social factors and technological factors. These factors are valuable strategic tool for identifying the business positions, size, and growth, feasible route for operations and market development and decline.
Political Factors
This consist of laws, government agenesis, geopolitical uncertainties, war against terrorism, authority to work and health issues which can affect the sale of Apple’s product worldwide. There cannot be control by the company. Some times this laws create new business opportunity which affect the compete sources from apple. As to reduce operating cost, Apple has outsourced in different countries like Ireland, China, Korea, Czech Republic and Cork if these countries face any political instability or any current and future taxation policies. The political environment can impact business organizations in many ways. It could add a risk factor and lead to a major loss.
For example in United Kingdom VAT rate is going up to 20% from 17.5% it will cause Apple's product prices will go up. Government policies in USA, problem which causes to delay in manufacturing operations, will led to spoil the Apple likeness in the eye of consumers and its dealers (Netnews 2012).
2.2.2. Economic Factors
The available purchasing power of Apple’s products in any country, depends on the that economy current income, prices ,savings ,dept and credit availability. Developing countries like china, South Korea etc are target by apple company because of the recent boom of this economy leading to and increase in the purchasing power of the individual in the economic unlike Africa whose individual have a low purchasing power due to the level of income.
World economic condition is also becoming one of the factors that influence Apple inc business process as this company is recognized internationally.
Inflation , recession and currency are the three important economic factors that Apple noticed . for example , during inflation period in the USA ,the purchasing power of all the people decreased and sales of apple products also decreased .To minimized the effect of inflation, Apple corporation has purchased itself foreign currency . by doing so, the revenue of their products in international market will increase.
Consumer & Social Factors for iPhones

Two factors always have been on forefront of Apple product throughout the history, the design and the quality which really affect our social life.
These factors are; firstly, sub variable would be families, friends and colleagues as they strongly contribute to a person's choice of mobile phone. This includes interaction with various membership, reference, and organizations. A person often buys an item because it fulfills the desire to be acknowledged for it by family, peers and other people he is related to or affiliated with.
.The second sub variable we'll be looking into would be the reference group. Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the product is visible such as dress, shoes, car etc then the influence of reference groups will be high. Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics). The reference group has a great impact on the consumer behavior because reference group are the one who serves as a point of comparison for an individual in the formation of either general or specific values, attitudes, or behavior. You bring your reference group with you for the following reasons: To get information or advice, to satisfy the expectations of others and to be like a certain type of admired person a consumer identifies with and wants to join.
Technological Factors
Nowadays technology’s market becomes wider, thus meaning the competitors of Apple Inc will also rise. But with the corporate culture of apple of Innovation/Vision,they always provide new and needed produts because they accept risk inherent in order to achieve their goals and vision to develop leadership products that will satisfy thire customers.
Apple is beating chipmakers at their own game by using Superior silicon chip
The competition also gets harder as technology changes and innovation develop much faster . As a result all of technology has a short lifetime . that is why Apple needs to upgrade their product more often so they will out do their competitors easily. In this case Apple will invest a lot of their capital to the research and product Development. One of the example is that Apple installs its own brand operating system , which increases its production cost, and on the other hand Dell as its competitor uses Microsoft’s operating system in all of its products . Apple always takes advantage because of its innovative and high technologies products . The large amount has invested in research and developments. Apple is beating chipmakers at their own game by using Superior silicon chip THE INTERNAL ANALYSIS OF APPLE.
This are factors within the control of the company. we use the
SWOT and Porter's value chain analysis to explained the internal environment of Apple .

Apple Value-Chain Analysis

Michael porter Value-chain analysis, is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the business. Figure 1 below illustrates the essence of value chain analysis. He identify primary and secondary activities.

Figure 1 Value-Chain Analysis
Primary Activities

Inbound logistics. Inbound Logistics: the process of acquiring and depot of raw materials . In case of Apple the inbound logistics are the new ideas, product designs, Intel chips and other required raw material Operations: Apple's software products are developed in US and all the hardware products e.g. computers, music players and mobile phones assembled in China and other Asian countries and Europe.
Apple works with hundreds of suppliers around the globe and maintains a highly sophisticated supply-chain management as illustrated in Figure 2 below.
Figure 2 Apple’s supply-chain management
Operations. Apple operations are conducted by 92,600 full-time equivalent employees and an additional 4,400 full-time equivalent temporary employees and contractors. Majority of Apple’s “hardware products are currently manufactured by outsourcing partners that are located primarily in Asia. A significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often in single locations”
Outbound logistics. it is the process of distributing and warehousing of products.
Apple’s net sales through its direct and indirect distribution channels accounted for 28% and 72% of total net sales respectively. Apple strives to minimize the volume of its inventory due to cost considerations. Marketing and sales. the process of identifying customer's requirement and creation of sales. When the Apple product is ready to enter in the market, Apple advertise it itself showing rich features and Apple suppliers advertise it as well to generate awareness among the consumers
As it is illustrated in Figure 2 above, Apple sells its products and services via four channels of distribution. or 2012.
Service. it is the process of feedback after the products and services are sold to customer. Apple feedbacks from its customers are always good about its products and services it is because of the quality Apple provide to its customers.
Apple is famous for exceptional quality of customer services during all three stages: pre-purchase, during the purchase and post-purchase. The company maintains Apple experience centers in major cities around the globe where anyone can use its products to become convinced about the quality. Apple sales assistants are usually trained and polite young males and females who are technically savvy and happy to demonstrate product features and capabilities. Post-purchase customer service is also impressive with unique iPhone trade-in programs that allow iPhone users to upgrade their phone to newer models with additional payment.

The Supportive Activities of Value Chain of Apples is. firstly,
Firm Infrastructure: it focuses on the organizational culture, structure and organizational control system. Apple is an American multinational organization . operation is influence by its background and consideration of consumer needs in the world
Human Resource Management: represents the recruiting of employees, development, training and compensation. Apple , recruits the local staff and trained them about their products so they can help and satisfy Apple's customers.
Technology Development: the important part of any organization it focuses on improves and new technology introduce to system it gives organization a competitive advantage. Apple itself a technology business so keep introducing new and beneficial technology to its business.
Procurement: it focuses on valuable purchase of inputs such as raw material equipment and supplies. Apple main raw material is to buy chips to produce good quality and moderate products.


. Strengths
• The major strength of Apple has its strong market position and consumer trustworthiness, which raises due to “Apple’s ecosystem”, which in turn to increases Company’s competitive advantage. Second, Apple has a full variety of software, products and apps, which are interlinked and maintain each other. Third, iTV and other new products will be released soon.
• In 2012, 3rd time Apple chosen as the most pioneering company in the world.
• At the end of 2012, Apple holds approximately $10,000,000,000 in cash. Company has no debts and the gross profit margin is also higher than its competitors.
• Apple was the second valuable brand in 2012 and its brand value was at $76.5 billion.
• High quality customer experience is a key of Apple’s retail store by providing a direct speak to well-informed staff which increases brand awareness.
. Weaknesses
• High price is the major weakness of Apple because there is a strong completion in market now, and the consumer of Apple products can easily obtain the similar function products by its competitors in a lower price.
• Decreasing market share can be caused to less influence its customers to using closed ecosystem of Apple.
• Apple Company is often blamed by other companies to disobeying their patents and also it has lost some trials as well. Such type of things can damage Apple’s reputation in market.
• In 2012, Tim Cook became a new CEO because of the death of Steve Jobs, which was the biggest loss for Apple Company. After some time John Browett and Scott Forstall left the firm, this will have a negative impact on management.
• In tech industry, Apple’s gross profit margin is highest but according to fear of forecasters that Apple’s current margin will not be continued due to increasing in prices and tough competition.
3.2.3. Opportunities
• Apple’s market share will be increase due to high demand of iPad and iPad mini in tablet market and this will help company to use as competitive advantage.
• Apple TV sales will be increased by the launch of iTV which will release soon.
• Smartphone and tablet markets are growing which is a good opportunity for Apple to expand their market share in these markets.
• Collecting damages from competitors because companies sometimes violated Apple’s patent. So such types of factors can be used by Apple as to damage the competitor’s image on market and collecting damages from them will led to increase cash reserves as well.
• The growth of mobile advertising is an opportunity and Apple allows advertising on iPod touch, iPhone and iPad by developing the platform named iAd advertising.
• The requirement of cloud based services is increasing, so Apple can enlarge its services relate to iCloud and software as well (Strategic Management Insight, 2013).
• Rapid technological change is the biggest threat which Apple and its competitors are experiencing now days. As customers are become more technology lover and they want more and more new products in very short time due to this, companies are facing pressure. So competition is very high and the one who cannot remain themselves with rivalry shortly be unsuccessful.
• Increment in Tax in USA will affect the Apple’s growth.
• Samsung is the only one who provides application processors to Apple and it has asked to pay higher price for it. It should be asked Apple to pay more because there are no feasible substitutes who could provide Apple to application processors (jung, 2012).
• The main competitor of iOS is Android OS in mobile market. The power of Apple iOS can be dominated by Android
• Availability of wide range of music stores like Wal-Mart, Amazon and online music companies like sound cloud and spotify will threat for Apple music store


Basic Characteristics of the Environment - market definition, size, growth and share
The global smartphone market has been experiencing explosive growth for the last several years. Competition has remained fierce all throughout, but the numbers don't lie. Two technology titans dominate the market, taking a whopping 92% of market share for themselves. These two companies are Google and Apple. Data regarding smartphone sales during Q4 2012 has come out during the last several days, evidencing how much people all over the globe want to get their hands on a smartphone. After a quick look at the information, it becomes evident that the high-end phone market is a one of the most extreme oligopolies of the 21st century. With the release of Blackberry 10 just two days away, investors are starting to ask if there really is any room left for Research In Motion's latest offering. (Deshkovich, 2013)
Future Smartphone sales forecast
More startling, smartphone sales will exceed 1.5 billion units per year by 2016.
Smartphone sales will be driven by two main factors, BI Intelligence says:
• Replacement of nearly 5 billion "dumbphones" with smartphones (smartphones currently make up only 10% of handsets worldwide)
• Price declines. The average price of a smartphone will drop from about $315 last year to $200 over the next several years
This will obviously have a huge impact on the mobile Internet economy, which is already exploding from the growth of smartphone penetration in the past few years.
Some other highlights from the report:
• Smartphone unit sales will grow at nearly a 30% compound annual growth rate over the next five years
• Smartphones will represent about two-thirds of all mobile phone purchases by 2016,
• Smartphones will be a $320 billion market by 2016.
These forecasts are much higher than those of other industry analysts, who generally expect smartphone unit sales to hit about 1 billion a year by 2015. (Gobry, 2012)

For creating a Growth-Share we need two measures. One relative market share and two market growth. I used a chart which developed by IDC (International data Corporation) to gather market share informations about Apple iphone and its rivals.

Figure 1 World Smartphone Market Share
According to this chart Apple iPhone share market is 15% of the overall market for 3rd quarter, 2012. And it takes second place after Samsung with 31.3% share market. Black Berry (Research in motion), ZTE, HTC are 4.3%, 4.2% and 4% respectively. For developing the BCG matrix we need relative market share. It means we should compute one brand's share to its largest competitor: (Wikipedia)

Brands Samsung Apple RIM ZTE HTC
Market share 31.35% 15% 4.3% 4.2% 4%
Largest competitor 31.35% 31.35% 31.35% 31.35% 31.35%
Relative market share( approximately) 1:1 1:2 1:8 1:8 1:9

For Market growth rate I used the table above and derive the table below:
Smartphone brands 2012 sales* 2011sales Market growth rate
Apple 148.4 93.1 %59
Samsung 177.4 95.2 %86
Research in motion (Blackberry) 41.4 52.8 -%21.5
HTC 39.2 44.6 -%12.1
ZTE 26.7 14.9 %79.19
* In millions

Figure 2: BCG Matrix for iPhone and its Competitors
15 % market share in 2012 is a fair figure for Apple iPhone. However Samsung is dominating the market by share of 30% as a result of perseverance in combination with Google’s Android during recent years. According to data and calculation iPhone is categorized in stars segment. It means high market share within a fast-growing industry.
Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. (Quick MBA)
For 2013 and 2014, the table below shows the sales record

According to the firm’s data, Samsung sold 89 million smartphones into channels in the first quarter, up from 69.4 million units in the same quarter of 2013. While that figure represents remarkable on-year growth, the low-end market grew even faster and Samsung’s smartphone market share actually declined to 31.2% from 32.4% in the year-ago quarter as a result.

This marked the first time in four years that Samsung’s global smartphone market share declined.

Apple sold 43.7.Like Samsung, Apple’s first-quarter smartphone sales were up substantially from the year-ago. quarter but they could not keep pace with the market. As a result, Apple’s global smartphone market share dropped to 15.3% from 17.5% in Q1 2013.
Huawei and Lenovo found themselves in the Nos. 3 and 4 ., with 13.4 million and 13.3 million units shipped, respectively. LG12.3 million smartphones shipped globally rounded out the top five.
Finally, as has been the case in the past several quarters, Samsung’s smartphone shipments in the first quarter were greater than shipments from all of its top competitors combined .
Strategy Analytics says that total worldwide smartphone shipments in Q1 2014 came in at 285 million, up from 213.9 million in the same quarter last year.
“The combined global smartphone marketshare of Samsung and Apple has slipped from 50 percent in Q1 2013 to 47 percent in Q1 2014,” Strategy Analytics analyst Linda Sui said. “There is more competition than ever coming from the second-tier smartphone brands. Huawei remained steady with 5 percent global smartphone marketshare in Q1 2014, while Lenovo has increased its global presence from 4 percent to 5 percent share during the past year. Huawei is expanding swiftly in Europe, while Lenovo continues to grow aggressively outside China into new regions such as Russia.”
Sui continued, “If the recent Lenovo takeover of Motorola gets approved by various governments in the coming months, this will eventually create an even larger competitive force that Samsung and Apple must contend with in the second half of this year.”
Table {1}below, shows the data for 2014 and 2015 both in different quarter.

The share of individual producers / Gartner

In the period from July to the end of September 2015, the world has sold nearly 353 million smartphones, up by 15.5% more than in the same period of the previous year. So phone market is still growing, which seems to be quite surprising, because often you can hear that it is already glutted. As you can see fairly slow development of this industry, especially in the middle shelf, do not bother users to acquire new products.

Let us now focus on sales results by individual manufacturers. In the third quarter of this year, Samsung sold (83.5 million), earning himself 23.7% of the market, up 0.2 percentage points less than a year ago. Koreans in the quarter decided to focus primarily on competing with Apple in a class premium . Apple sold in this period 46 million iPhones, which gave her a share of 13.1% (higher by 0.6 percentage points than in the same period of 2014). The last place on the podium is Huawei, which boasts a growing popularity in China, Europe and the world, where it has sold more than 27 million smartphones with, seizing for itself 7.7% of the market. Huawei probably waiting for a bright future. The share of individual systems / Gartner

For operating systems, the first place is Android, which has further increased its influence. In the third quarter of this year sold nearly 300 million devices running Google on board, and the share increased from 83.3 to 84.7% follow by ios
The biggest loser of the whole statement is Windows Phone which still ranks third, but its share shrunk to a level of 1.7%(down 3%), which in my eyes is the result of downright disastrous
The essence of formulating competitive strategy is relating a company to his environment. The relevant environment is very broad encompassing social as well as economic forces. The key firms environment is the industry or industries in which he competes. The collective strength of theses forces ,determine the ultimate profit potential in an industry.

Analysis Of Industry Competition
We will use Michael E Porter 5 competitive forces to analysis how Apple compete in the smart phone industry. This forces are theoretical framework, based on 5 forces, describes the attributes of an industry and thus suggests when opportunities will be greater, and threats less, in these of industries.
Attractiveness in this context refers to the overall industry profitability and also reflects upon the profitability of the firm under analysis. An “unattractive” industry is one where the combination of forces acts to drive down overall profitability.
This are rivals which also use similar appplicatios like Apple such as firms:
-Who use Windows OS and media player for playing music and video such as ( Microsoft )
- Competition to Mac OS X (Linux)
- Alternative sources of computer hardware (Dell,HP,Lenovo)
- Similar stylish Mp3 player (creative, Samsung , Sony)
- online music stores similar to itunes stores (Napster)
The more players there are, the more intense the competition for the same customers.Apple always invest heavily on R&D to introduce new products like ipone to meet the needs of the consumers. As companies struggle to differentiate themselves, its easy to make pricing the focal point. Apple still succeed among this rivals because;
Firstly,Apple avoid price- based competition thus far by staying away from low end markets where price is the main differentiation . secondly, Apple products never go on sale. By generating a superior products to the Android phones , rivals tablets and eReaders, its compete base primarily on quality , services and unique ecosystem.

They include competitors who :
- Who stream audio and video with V-cast (Verizon, Samsung mp3/ sony mp3)
- Demand online services (similar to i-tunes)
- New entrants with disruptive technology (the “next google”)

Apple has block this new entrant through the following way:
-By making a strong brand image , innovation and customer services . Making it difficult for new entrant to compete with him
-Tim Cook’s supply chain expertise is a great defense against low end disruption from new entrants .New entrants will have difficulty matcjing or beating the supply chain cost structure.

These are different products from different firms that satisfy the same need. Apple substitute are:
- Entertainment media , media and music (xbox ,ps20
- Ipod > Samsung mp3 and Sony Mp3 player
- Ipad> Samsung tab
- Ipone> Samsung galaxy note ,Sony Ericson ,Nokia
Apple success come because firstly ,his brand is well know and recognized . secondly ,invest heavily on R &D to produce better products better than his competitors by releasing new version of his products every time. From iphone 1 – ipone 6. And also ipad 1 ipad 6. This is to meet the need of the consumers.

Customers objective is to lower price or demand high quality or both. Apple oonsumers does not have this power because ;
- Its has million of customers (individual and large corporation )
- Keeps switching cost high by keeping critical products features same and easily transferable among devices i.e contacts , calendar , pages , Number ,icloud ,iphone , imovie ,iOS
- He always use iOS to broadens its innovation products Bargaining Power Of Supplers Supplies of Apple include;
- supplies of processors and computer memory (Motorola , IBM ,Intel)
- Strategic alliance / Supplier of Mac ( Microsoft )
- Supplier of tv and movies (Disney ,ABC ,Fox , Sony)
- Sources of music (BMG ,Sony , Warner , Universal )
The bargaining power of supplies is determine by the uniqueness of supplier’s products. Apple influence this suppliers by ;
- Reducing the power of chip makers by designing its own chips
- Reduced the power of manufacturers like Focconn ,by buying manufacturing equipments and only allowing the equipment to be used for apple products
- Reduced the power of the distributors by taking over retail distribution and products services through Apple store
Apple target market are:


Teenagers are considered one of Apple Inc.'s target markets. Teenagers use iPods for many reasons. Some of these reasons are to socialize with friends, listen to music and go on Facebook, MSN, twitter etc. There are also many gaming apps that appeal to them. IPods have become quite a trend with teenagers.

College and university students are also targeted by Apple Inc. These students use Apple Inc. products such as iPad's, MacBook's, iPhone's etc to quickly record notes. These notes are kept organized in their devices. Also these products are light which makes carrying devices to and from school much easier.

Business people are very intrigued by Apple products. All Apple devices (iPhone's, iPad's, MacBook's etc.) have a business quality that is very useful. These devices are used to finish work efficiently and to communicate with clients easily. In addition, sending documents is easy and organized.

Apple products are also useful to young children and kids. The reason for this is that devices such as iPods and iPads are easy to use due to their touch screen quality which is good for children. Parents can download learning game apps on Apple devices to teach young children and kids.

Adults are also one of Apple Inc.'s target markets. iPhone's are useful to adults for their everyday needs such as phone calls, map directions, internet connection, documents and cameras. Carrying these small devices makes adults lives much easier for communicating daily.

Customer Marketing Strategies That set Apple Apart

If you’ve ever walked past an Apple store on the eve of a new product launch, you’ve undoubtedly seen the line-up of devoted Apple fanatics waiting anxiously to get their hands on Apple’s newest smartphone or tablet. Apple has succeeded so well in cultivating a generation of fanatically devoted customers that their revenue model has been compared to that of a subscription service or a utilities provider –In a recent Bernstein research study, an incredible 90% of iPhone users indicated an intention to purchase another iPhone as their next phone.
Apple has also managed to set itself apart from its tech competitors with an unparalleled level of customer management. Apple has consistently scored the highest for customer service in the personal computers category of the American Consumer Satisfaction Index (ASCI), has been continually ranked number one in Vocalabs phone support satisfaction surveys, and has also achieved the highest customer satisfaction scores in Consumer Reports questionnaires – amongst a long list of other customer satisfaction accolades.
Apple’s customer management goes well beyond forward facing customer support, it’s about consistently delivering a customer experience that meets and even exceeds expectations. Here are 5 customer management strategies that Apple has used to set itself in a class above its competitors. Create A Channel For The Perfect Customer Experience
Rather than leave its primary customer interaction to random employees of big box stores, Apple took the risky and expensive step of creating its own chain of retail stores. By creating the Apple store – a store devoted to selling Apple’s own products – Apple created an environment that allowed them to manage every detail of the customer experience and dictate the customer’s interaction with Apple as a brand. Design An Environment For Customers To “Hang Out”
Not only did Apple’s retail gambit help them build the most valuable brand in the world, the Apple stores themselves are the most profitable retail spaces in the world, generating an average of $5,600 per square foot of retail space.
Despite the incredible profitability of Apple stores, the majority of customers that enter an Apple store don’t actually make any purchases. Instead, teenagers, young professionals, and middle aged parents all congregate to the Apple store to hang out and play around with Apple’s cool new products. Rather than have their staff pressure customers into sales, customers are greeted by smiling, knowledgeable, passionate employees who encourage customers to experience the product. Apple managed to turn shopping for computers and phones into an enjoyable customer experience. Minimize Customer Service Problems With Tight Quality Control
If you’re going to be one of the world leaders in customer satisfaction, your customer service has to grow from the very core of your company’s business model. No matter how well trained your technical support staff, how friendly your retail staff, no matter how carefully you’ve selected your customer management outsourcing partners, a company that produces shoddy products will have problems with customer loyalty and retention.
While high quality standards are a must for any major consumer electronics company, Apple has taken quality control to a new level. Apple is well known for exercising tight control over every aspect of their business, from the famous veil of secrecy that shrouds upcoming products, to their notorious control over the iOS. This has allowed Apple an unprecedented level of control over the user experience and allowed them to stand in a class of its own when it comes to customer satisfaction.
Apple has taken unprecedented steps to ensure that the user experience for their smart phones and tablets are strictly controlled at a scale never before seen in mainstream operating systems. In their App store, Apple vets every piece of software before it can be installed onto an iOS device. Apple was even willing to neglect support for Flash – a piece of multimedia software required to view more than 75% of all video on the web – in their iOS software. Despite initial user uproar, Apple was willing to make this decision for the sake of maintaining a quality environment for users of their iPhone and iPad products
View Customer Management as a Long Term Investment
While tech companies traditionally viewed customer management as an expense to be ruthlessly minimized, Apple viewed it as a long term investment in customer loyalty and brand building. Apple has made important customer-oriented decisions such as refusing to move the heart of its North American phone support offshore, and maintaining a hassle-free approach to replacing broken devices. Studies have shown that these decisions have been directly responsible for Apple consistently placing number one in customer service satisfaction studies. These policy decisions all stem from viewing customer management as a long term investment towards building customer loyalty and improving retention. Have A Laser Targeted Business Focus
Despite being the richest technology company in the world, Apple only makes a handful of products. In fact, nearly every customer waiting outside an Apple store on the eve of a product launch could likely recite Apple’s entire product line by heart. This is no accident. Steve Jobs understood that the key to great customer management is to be able to answer the question, “What is our business?”. Perhaps more importantly, Jobs understood that this question had to be asked from the perspective of the customer.
Steve Jobs understood that Apple was delivering more than just computers, phones and portable music players, Apple was delivering cool, elegant, reliable products that stood out from the crowd, and thus allowed its users to stand out from the crowd. By focusing only on delivering this experience to customers, Apple was able to build incredible – nearly fanatical – customer loyalty and user satisfaction.
Whether you’re working with an in house customer management team or a customer management outsourcing partner, it’s crucial that everyone from senior managers to customer facing personnel can answer the question: “What is our business to our customer?”. Knowing the answer to this question is the key to developing a customer management strategy that stands apart from the rest.
Consistency : All of Apple's products have the same basic architecture. Because of this consistency, customers who already own Apple products have a good idea of what they'll be getting before they make a purchase. They know that it will be easy to adapt to new hardware, and this makes them more open to making a repeat purchase.

Corporate Strategy
In Corporate Strategy, Collis and Montgomery explain there are two kinds (diversified) corporate strategy —linked and constrained. Companies using linked diversification enter new businesses when it relates in some way to another business they are already in (it is linked to it), but does not necessarily have any connection to their other businesses.

Apple uses constrained diversification corporate strategy. Apple is, inherently, a personal computer company (hardware and software), and their businesses utilize their competencies in developing hardware and software. The Macintosh, I Pad, I Phone, iPod and Apple TV are all computers, which allow Apple to share resources between businesses. For example, the Macintosh, I Pad, I Phone and Apple TV all run OS X, Apple’s operating system. This creates economies of scope, which, Collis and Montgomery point out create cost savings for the company because their resources are shared across multiple businesses.

Rather than just have related businesses, though, each business is a focused platform with no extraneous products or product types. The Macintosh, for example, consists of two kinds—desktop and notebook. These separate products lines each share resources and complement each other. The iMac and MacBook Pro are both primarily constructed from aluminum and glass, so not only do they share the same materials (which reduces costs), but they resemble each other, creating unity between product lines.

Crafting Competitive strategy
In the June quarter, 173 million people owned smart phones in the U.S., with Apple Inc.’s (NASDAQ:AAPL) IPhone accounting for the majority of the handsets. While I Phones helped Apple capture 42.1 percent of the U.S. market in the second quarter of 2014, this because of the best competitive strategy of apple
Apple shows that its generic strategy is a major determinant of advantage against other firms like any other firms. Also, Apple’s intensive strategies for growth support the firm’s ability to maintain its strong position in the global market. With a high rate of innovation and emphasis on excellence in product design, Apple succeeds even with its relatively high selling prices. This successful position indicates Apple’s effectiveness in using its generic strategy and intensive growth strategies. Apple’s generic strategy, based on Porter’s model, aligns with the company’s intensive growth strategies. In particular, the intensive growth strategy of product development is key to fulfilling this generic strategy and supporting Apple’s success.

The concept of differentiation has been widely adopted by Apple Inc in enhancing its competitiveness and profitability. This has been achieved through designing and production of unique products (Furrer 2010: 231). The aspects of advertisement have also been adopted in ensuring product differentiation from competitor products. Despite that differentiation has been a cause of higher costs to the company; it has enabled it to distinguish its products and services from those of competitors. It is worth noting that differentiation has enabled the products of Apple Inc to appear unique, thus fetching higher markets (Ireland et al 2008: 124). Apple Inc has been much conscious about the increased costs following the adoption of differentiation, thus enabling it to maintain its competitiveness.
Apple’s “design voice” embodies a user-centric point of view that bridges gaps unseen or unaddressed by others.
• In computing, make to download and listen an mp3 easily and the iPhone applied the connective power of smart phones beyond mimicking desktop email to a constellation of new mobile applications.
Apple limits the innovations in each new product generation. They focus on a few that sparkles while re-using much of the original product design. Besides, Apple uses familiar engineering design disciplines such as reviews and schedules
• By focusing their resources on a few highly differentiated innovations, Apple brilliant marketing wows customers by inflating the innovations’ contribution while controlling cost, resources and maintaining stability.
Apple differentiates itself from the competition by focusing on design quality. Apple has a strong reputation because of its high quality design in personal computer history.
In US Apple stores have a genius bar for technical support, daily workshops, one-on-one support, and the most important their products out for people to play with before making a purchase. Instead of focusing on offering low cost computers, Apple differentiation strategy focuses on manufacturing products that are innovative, high quality and design, and user-friendly.
Cost Leadership strategy
In Apple’s case, their cost leadership strategy is achieved by the direct low cost inputs to produce the cheapest high quality product possible. Apple has a very powerful management and company culture, which promotes innovation in everything they do, from their products, marketing, and delivery, which is key in differentiating their brand from the competition. Apple also achieves cost leadership by developing long-standing business agreements with companies so that they can focus on creating innovative products and solutions to problems.
Cost leadership strategy has been highly adopted by Apple Inc in its endeavors of ensuring competitiveness and success in the technology industry. The company’s management has been able to draw policies and strategies that are aimed at ensuring that the company is the lowest cost producer and distributor (Roth 2001: 24). By strategizing on cost efficiency, the success and sustainability of the company is enhanced. By lowering the cost of production and management, Apple Inc has been given golden opportunities on determining prices of its products, thus enhancing its competitive edge. Lower cost of production and distribution has enabled the company to put competitive prices on its products as well as enhancing its gross profit margins (Bowerman and Wart 2011: 63). Some of the practices adopted by the company in executing the cost leadership strategy is through minimization of operating costs, lowering distribution costs, tight control on labor costs as well as reduction of input costs

Focus strategy (Focus on particular market niche)
The focus of Apple Inc on digital music environment has been a vital element of success and innovations. This strategy of specializing and putting more focus on digital music has reinforced the company’s competitiveness in the digital market. Specialization in this product line has been aiming at capturing the young generation. Unlike other companies, the products of Apple Inc have bee widely focused on the young generation as well as the elite. This is much evident through iMovie, iTunes as well as the GarageBand. Focus on these products has influenced new innovations like the 18th-month-old music editing software. Unlike competitors who are characterized by concentration on broader range of customers and products, the company has been able to enhance differentiation and cost leadership. By so doing, the competitiveness and profitability of the company has been enhanced, thus leading to its present success (Ireland et al 2008: 124).
Marketing Positioning
Implementation Corporate Strategies

Implementation of strategy is the process through which a chosen strategy is put into action. It involves the design and management of systems to achieve the best integration of people, structure, processes and resources in achieving organizational objectives

Institutionalization of Strategy
The first basic action that is required for putting a strategy into operation is its institutionalization. Since strategy does not become either acceptable or effective by virtue of being well designed and clearly announced, the successful implementation of strategy requires that the strategy framer acts as its promoter and defender. Often strategy choice becomes a personal choice of the strategist because his personality variables become an influential factor in strategy formulation. Thus, it becomes a personal strategy of the strategist such a feeling creates commitment.
Setting Proper Organizational Climate
Setting organizational climate relevant for strategy implementation is important for making strategy to work. Organizational climate refers to the characteristics of internal environment that conditions the co-operation, the development of the individuals, the extent of commitment and dedication of people in the organization, and the efficiency with which the purpose is translated into results. Organizations whose strategy is implemented with conducive climate are more effective than those whose are not. People are the instruments in implementing a particular strategy and organizational climate is basically a people-oriented attempt. A top manager can play an important role in shaping the organizational climate not only by providing standards for what others do but also what he does because organizational climate is a matter of practice rather than the precept
Developing Appropriate Operating Plans
Operating plans are the action plans, operational program and decisions that take place in various parts of the organization. If they are made to reflect desired strategic results, they contribute to the achievement, of organizational objectives by focusing attention on those factors, which are important. For example, in budgeting, more resources will be allocated on those factors, which are critical to the success of the organization as spelled out during the strategy formulation process. There are various ways of making sure that operating plans contribute. If every manager understands strategy, he can certainly review the program recommendations of staff advisers and line subordinates to see that they are consistent with the requirements of the strategy. Appropriate committees to see if they contribute positively can review major program. This lends an aura of formality to the program decisions and their influences on strategy may become clear.

Developing Appropriate Organization Structure
Organization structure is the pattern in which the various parts of the organization are interrelated or interconnected. It prescribes relationships among various positions and activities. For implementing strategy, the organization structure should be designed according to the needs of the strategy. The relationship between strategy and structure can be thought of in terms of utilizing structure for strategy implementation because structure is a means to an end, that is, to provide facilities for implementing strategy. Therefore, both should be integrated. In the absence of such integration, outcome may be confusion, misdirection and splintered effort within the organization. There can be various ways of designing an organization structure. However, the major issues involved in designing the structure to fit the strategy involve the answers of following questions.
1. What should be the different units of the organization?
2. What components should join together and what components should be kept apart?
3. What is the appropriate placement and relationship of different units?
Periodic Review of Strategy
There should be periodic review of strategy to find out whether the given strategy is relevant. This is required because even the care-fully developed strategies might cease to be suitable if events change, knowledge becomes more clear, or it appears that the environment will not be as originally thought. Thus, strategies should be reviewed from time to time. What should be the frequency for such a review is not universal but major strategies should be reviewed at least once a year. In fact this is done by most of the organizations who believe in relating themselves with the environment.

The implementation strategy of Apple competitive strategy with its competitors is through its unique ability of market development or innovation, market penetration and market development and this implemented by the strong staff combination and structure.
To manage its operations, Apple follows an M-form functional structure. Under CEO Tim Cook there are 10 Senior Vice Presidents: CFO, COO, Operations, Hardware Engineering, Software Engineering, iOS software, Worldwide Product Marketing, Industrial Design, Retail and General Counsel. The management duties are separated out, but they ultimately report to the few at the top. Apple’s board of directors oversees the Chief Executive officer and other senior management in the competent and ethical operations of Apple on a day-to-day basis to assure that the long-term interests of shareholders are being served. Directors are expected to be proactive and to have a focused approach to their positions. More importantly they are expected to set standards to ensure that Apple is committed to being successful. Apple’s governance structure was designed to encourage moral actions, effective decision-making and monitoring of compliance and performance. Apple executives meet daily to talk about all of the business. They discuss current goals and projects and market changes and where the company’s direction is going. Apple is an incredibly collaborative company; they are great at figuring out how to divide tasks up into great working teams promoting communication amongst teams

Major Function

Resources and Competences
A strategic capability is the adequacy of the resources and competences of an organization for it to service and prosper (Johnson, Scholes and Whittington 2005).
In an organization, resources and competence are very important to gain competitive advantage. Having adequate resources is not enough by itself but the competency which is the way how organizations deploy its resources in a proper and effective way is a very crucial factor to help organizations to accomplish a competitive advantage.
In Today's global competitive market, companies should strive to compete in the emerging market and meet customer's requirement in order to survive. Organizations need to know the threshold resources needed to achieve their strategies. Threshold capabilities are essential resources and competence for the organization to be able to compete in the given market (Johnson, Scholes and Whittington 2005).
The following table show the resource and capabilities of Apple.
Apple Company Resources and Capability

Resources Importance Relative Strength
Threshold Resources
Tangible Resources
Employee (programmers, Designers, Engineers, etc )
Retail Stores
Intangible Resources

Apple Company Capability

Knowledge/Skills of employee
Brand name
Customer's Database
Capabilities for Competitive advantage
Unique design capability
Innovation Capability
Powerful Brand image
Threshold capabilities

Figure 8: Resource and Capabilities for Apple Inc
Apple's Threshold capabilities
Threshold capabilities are categorized as Tangible and intangible asset. Without the threshold capabilities, it is almost impossible for companies to survive in the market. In addition, knowing the required threshold competency is very useful for the company to deploy resources to meet customer's minimum requirement (Johnson, Scholes and Whittington, 2005). Apple's tangible resources are the smartest chief executive officer Steve Jobs, designers, programmers, engineers, hardware, software, retail stores and suppliers.
The founder and the CEO of Apple, was Steve Jobs the current Tim Cook is a key and valuable asset to the company. Their unique approach and vision to business leads Apple to be on top in the electronic industry. "It would be a disaster," said Gene Munster, an analyst with piper Jaffray and Cos, "he would be impossible to replace" (BBC News 2009).
Apple has highly talented professional programmers, designers and engineers which can produce industry award winning software like OS X Operating system and revolutionary product like Iphone and ipod. The company design its own system software for the hardware it runs on. For example Apple's Macs, the best personal computers in the world is designed along with OS X, iLife, iWork, and professional software. It has gained popularity in the entire computer industry and able to compute with its high competitor like Microsoft on the same level. In addition there are over 300,000 applications available in the App store all designed specifically for iphone providing almost unlimited functionality (Apple 2010). There are also thousands of different applications for business, entertainment, games, etc. In Addition, the hardware platform of apple is another key resource that provides advanced technology and ease of use.
As of September 25, 2010, Apple had 317 retail stores, including 233 stores in the United States and 84 stores internationally (Apple 2010 Annual Report). Apple stores acts as a sales location and an advertisement. By offering an outstanding customer service, it helps the company to gain a good brand image and customer loyalty. Apple's retail stores are very important resources which contribute a lot for the success of the company.
Apple's capabilities for competitive advantage
An organization should have unique capabilities to have a long run existence and to gain a competitive advantage, having only threshold capabilities do not create a competitive advantage. Unique resources are resources that critically underpin competitive advantage and that others cannot easily imitate or obtain.
Core competences are the activities and processes through which resources are deployed in such a way as to achieve competitive advantage in ways that others cannot imitate or obtain (Johnson, Scholes and Whittington 2005).
Unique design capability
The designs of electronic products have been almost similar for long time. But Apple came with a unique user interface design by considering the screen, touch pad, battery and other better functionality in its products. The unique design of the company's products like Ipod , Imac and Iphone has a major impact for the success of the company and for the products to be on top over the competitors. Apple always focuses on quality and differentiation for a better looks. The competitors of Apple like Google, Microsoft, HP, etc should have to be aware of the unique design of Apple to be able to compete in the electronic market.Â
Innovation capability
During the competitive pressure of today's rapid advanced technology, Apple focuses its competing strategy on innovation. By combining technological knowledge with a new idea of selling music online, Apple came up with a revolutionary Ipod music player and Itunes which becomes most popular in the whole music industry. Apple continues designing its innovative products like ease to use desktop computers, iphones and Ipad to maintaine its reputation from its consumers.
The company invests little in research and development when compared to other competitors. It spends only 3.7 percent of its revenue on R&D. The founder and CEO of Apple Steve Jobs doesn't believe that innovation has something to do on investing a lot of money on R&D rather innovation is about the knowledge of the people that the company has and the way how to deploy them and how much to get from it (Plantes 2008). Rather than focusing on existing products and services, Apple's core competitive strategy is innovation of new product design with exceptional elegant easy- of-use around customer experience.
Powerful Brand Image
Apple has a powerful brand name which is highly recognized in the entire personal computer industry as well as in the consumer electronic industry. The company's product strategy is to create innovative products and to satisfy its customers through its high quality of services.
The Apple brand personality focuses on simplicity and the removal of complexity from people's lives; people-driven product design; and about being a really humanistic company with a heartfelt connection with its customers.
The popular innovative creations of Apple products are Imac, Ipod, Iphone and OS X operating system. It also revolutionized the music industry through its ITunes. The launch of this products helped Apple to gain a reputation of its high brand image and customer loyalty.
As mentioned earlier in the company's strength, Apple's brand value $ 21,143 billion during 2010 and become the fastest growing worldwide. The Brand also considered as a symbol of technological modernity and the company uses it to compete with its high competitive market. Having a powerful brand image is a unique competence which helped the company to gain a competitive advantage by gaining customer loyalty.
Critical Success Factors Analysis
Critical success factors (CSFs) are product features that are particularly valued by a group of customers and, therefore, where the organization must excel to outperform competition (Johnson, Scholes and Whittington 2005).
Critical Success Factor
- Consistency
- Ease of Use
- Differentiation
- Innovation
As of University of Michigan's American Customer Satisfaction Index (ACSI) in the year 2010, Apple scores the highest ranking which is 86 out of 100 and become on top of its competitors in the PC industry. As shown in the figure below, Apple has the highest score for seven consecutive years. During 2010, the entire PC manufacturer improved their score, but still could not reach on Apple (Fortune 2009).
Figure 10: Fifteen years of ACSI ratings for the PC industry
(Source: Fortune 2009)
The company is committed in innovation and unique design and can differentiate itself from other competitors through its unique product like: imac, iphone, ipod and ipad. For example few years before, mobile phone market was dominated by few companies like Nokia, Motorola and Samsung. But Apple came with its new innovative iphone with unique features that differentiate it with other products and able to be recognized as top in the mobile market. By using product differentiation as an advantage, Apple attracts its customers and gains a high reputation of customer loyalty.
Apple also differentiates from other competitors by offering different applications and operating systems to be used in its hardware products. For example, using the ipod, users can download music via ITunes and mac computers use its own operating system OS X which is developed in Apple. In Addition Apple provide different apps which offer almost unlimited features to Apple iphones. Providing such complete solutions strengthen the customer loyalty.
The retail stores are also other factor which differentiates the company from other companies. The architecture of the stores is designed in a friendly way to attract customers and help to explore the technology that the company provide. It helps the company to interact with its current customers as well as with new customers and encourage them to get excited with the new technology that it provides them (Cnet News 2010).

In Today's rapid changing technology, it becomes very challenging for firms to compete in the multinational competitive market. As of business week 2009, Apple is recorded as the most innovative company in the world.
Apple is always committed to innovation and uses its resources effectively in the way to create value for its customers. The company started its innovation during 2001 with the launch of its innovative portable digital music player ipod. In addition Apple introduced the idea of selling music online through its ITunes store, which becomes the largest retailer of music in the world. Apple continued its innovation and came up with its unique design of Iphone and Apple TV. The company's latest innovative device is the Ipad, which is a revolutionary device with most advanced technology. During its three months of release in the market, the iPad sales brought revenue of nearly $2.2 billion (CNN Money 2010). Being focused to innovate helped Apple to gain a competitive advantage in the global electronic industry and gain the capability to be a leader in the consumer electronic industry. By using this critical success factor as an advantage, Apple creates an opportunity for growth and widen its customers' base.
In any type of business, consistency is the key principle which leads a business to succeed. Apple uses similar basic structural design to develop its products. Due to the consistency of the quality of the products and services, it is easy for customers to adopt new Apple products and make a repeat purchase.
Ease -of- use
The main focus of Apple is to provide quality customer experience by creating ease of use functional products which perform flawlessly for customer. The company prioritize its customer experience at every phase of the product development to produce an ease to use products to provide strong visual and emotional attraction.
Apple always tries to improve the design of its products concerning its look and feel to attract its customers. Usability is the key performance feature that the company give high priority to influences speed to accomplish user task or for users to learn the features and contents that the product offers. The ease of use features of Apple products provide usability for customers in different age level and knowledge area to cope with the new technology. By using this critical success factor as an advantage, Apple attracts its customers.
Findings and Conclusion
In conclusion, there are many aspects needs to be addressed while analyzing Apples' success; but its core competence to create opportunities in new arenas is its differentiation strategy.
Differentiation strategy is offering a unique service that is distinct from its competitors, and which customer value. (Boddy 2008). Apple uses differentiation strategy which focuses on offering a unique product in the industry which has a unique advantage from other competitors other than offering a low price.
The main focuses of Apples' differentiation strategy to achieve its core competence to create opportunities are Product differentiation and value creation to customer.

Product Differentiation
Customers have too many choices of products or services in today's global competitive market. The basic reason for customers to select a product/service among different options is differentiation. Apple focuses on innovation and maintains its product quality to differentiate itself from other competitors to satisfy customer preference.
Unique Product feature
Apple takes the advantage of innovation as a core competence to be a leader in today's global electronic market. The innovative Apple products like mac, Ipod, ITunes, Iphone and Ipod leads the company for a great success because they have a unique product feature of ease of use and elegant design. Through innovation of unique product which is not easily imitated by other competitors, Apple differentiates itself and got the opportunity for marker expansion.
Unique Product Performance and Quality
By using innovative technology and creativity, Apple offer high level of quality and performance. This strength helps the company to gain strong brand identity as well as customer loyalty. The innovative effort enables the company to provide a potential product performance of high quality which satisfy the needs of customer and have longer value. With its product of high quality and excellence performance, Apple offer value to the customer and convince them to become loyal through its innovation, creativity and strong brand image.
Value Creation
The willingness of customer to buy a product depends on the value that the product offers them. Apple focuses on creating value for customers to enhance the market growth of their products and services.
Management Control
For employees to use their talent for innovation and to explore their new idea, they need to be encouraged by the managements. As mentioned in the corporate structure and management style, the CEO of Apple Steve Jobs works with top 100 employees of the company and encourage them to be free to share their new ideas. Management decision making on what employees work on and how customers gain value determine the long term capability of the company.

To fulfil what customer value, Apple focuses on innovation and creates revolutionary new products like Ipod, ITunes, Iphone and ipad. Innovation help Apple to gain high market share in the pc and music industry. And achieve brand loyalty. Through its innovation, the company introduced new technologies and added value not only to the customer but to the whole world.
As mentioned in the company strength above, diversification strategy is one of the strength which helps Apple to revive the image of the company. In today's ever changing technology, diversification enables Apple to understand what consumer's value. The company created value to consumer by offering diversified products with high quality and enhance customer relationship and loyalty.

Evaluation and Advices on Apple Company
Reviewing Performances

Apple Technology Company is an American multinational technology company headquartered in Cupertino, California, that designs, develops and sells consumer electronics. The founders of Apple are Steve Jobs, Ronald Wayne and Steve Wozniak.
Smartphones are rated using a combination of subjective criteria (eg. design, ease of use) benchmarks, (eg. The battery, audio and display tests) and synthetic benchmarks (e.g. Geek bench for speed, 3D mark for graphics). Photos are also taken in different lighting conditions and compare the results.

According to the findings of my research, the smartphone war is a constant game of leapfrog, and apple has vaulted past Samsung. The iPhone 6s plus is apple’s top pick because of its innovative 3D touch display, immersive live photos feature and class leading A9 processor.

With the above explanations, apple phone is seen as the best smartphone based on its features, performance and overall value. Apple releases a new iPhone each and its always the best iPhone Apple Company has ever made. The company switched up its game plan a bit in 2014 and released the same in two different sizes, so now the title of “best iPhone ever” is shared by two devices at a time.

According to a market research firm, sales of Apple’s iPhone will continue to help the rapid expansion of the global smartphone market. Below is a table elaborating the above mentioned information:

Global Smart Phone Shipment Ranking in Q2 2011 (Ranking by Unit Shipment in thousands)
Rank Brand Q2 2010
Shipments Q1 2011
Shipments Q2 2011 Shipments Q2 2011
Market Share Sequential Unit Shipment Growth Annual Units Shipments Growth
1 Apple 8,398 18,647 20,340 18.4% 9.1% 142.2%
2 Samsung 2,800 12,600 19,600 17.8% 55.6% 600.0%
3 Nokia 24,000 24,200 16,700 15.1% -31.0% -30.4%
4 RIM 11,200 14,800 13,200 12.0% -10.8% 17.9%
5 HTC 5,079 9,603 11,966 10.8% 24.6% 138.6%
6 Motorola 2,700 4,100 4,400 4.0% 7.3% 63.0%
7 Sharp 1,078 1,386 1,480 1.3% 30.8% 309.6% Others 5,545 17,364 22,717 20.6% 30.8% 309% TOTAL 60,800 102,700 110,400 100.0% 7.5% 81.6%
Sources: HIS iSuppli October 2011

Figures from the above diagram shows that Apple’s market share in the second quarter of 2011 was 18.4 percent, putting it ahead of Samsung, Nokia, RIM, HTC, Motorola and Sharp.
The Second quarter of 2011 was the first tme that Apple had been the world’s largest smartphone brand, boosting its shipments from 18.6 million in the first quarter to 20.3 million. It shipped 8.4 million units in the second quarter of 2010.
Apple was helped by a 31 percent decline in shipments at longtime market leader Nokia.


Apple could fare well depending on its focuses on the high end of the market, or introduces a lower-cost iPhone in order to target developing markets. With the continued expansion of Apple’s sales channels, the company should continue to maintain its momentum in the smartphone market and beyond. In June 2011, the US government had an operating cash balance of US$13.8 billion, while Apple boasted a whopping US$76.2 billion. According research conducted, consumer satisfaction among initial buyers of the iPhone has been rated very high. Through research, it is found out that 74% of iPhone buyers are ‘Very Satisfied’ (compared with 43% of RIM buyers) ( Given that iPhone wireless services are provided by AT&T, it is also important to look at consumer satisfaction figures for AT&T in the US. While only 31% of AT&T customers gave a “Very Satisfied” rating (versus 50% for Verizon) (www.changewave/cell-phone-service-providers) more people indicate they will switch to AT&T. It can be inferred that the iPhone compensates for lower AT&T customer satisfaction figures, thus indicating the success of iPhone.
Sales, market share, growth of iPhone is successful due to simplicity of its usage. It simply being used to play games, music and for voice communications. Accoridng to statistics from M-Metrics, a mobile research organization, iPhone users are far more likely than other Smartphone users to utilize mobile data services ( In addition, M:Metrics cited data showed that 85.9% of iPhone subscribers in the US used the device to go online in their first three months of us. This data shows that iPhone is successful as a mobile data interaction device, more so that other Smartphone products.


According to a news report by a Research Firm Comscore, iPhone is far and away the most popular smartphone in the US. From the information collated, 169 million cellphone users in the US, use Apple smart phones representing around 70 percent of all mobile users. According to the Wall Street Journal, Apple’s share of profits is remarkable.
Apple sold over 42 million iPhone unit in the 30th months after its launch in July 2007 to December 2009. Analysts predicted anywhere between 10 and 45 million iPhone sales in 2009, a number which Apple met when they sold approximately 25 million iPhones in that year. The iPhone has achieved strong market share since its launch, from a 4% market share in July 2007 to 30% in September 2009.
Apple Overtakes Microsoft in the Mobile Phone Market Apple is now ranked second in the global mobile phone market
• In last year 2014, Apple managed to improve its position in the global mobile phone market from third to second, overtaking Microsoft (MSFT). This insight comes from a report from Strategy Analytics, which mentioned that Apple’s share in this market improved from 8.2% in 2Q14 to 10.9% in 2Q15.
• This achievement is commendable since Apple doesn’t sell feature phones and only sells smartphones in the form of the iPhone. Feature phones are quite popular in emerging markets (EEM) like India. Samsung (SSNLF) still leads this market, but its share continues to decline, as the chart below shows. Huawei, on the other hand, managed to grow its share fast in this market, mainly because of the popularity of its 4G models, such as the Mate7.

Microsoft lost market share as consumers await the Windows 10 release

• The popularity of the iPhone 6 and iPhone 6 Plus helped Apple grow its share in the mobile phone market. Microsoft lost considerable ground in this market as users await the release of new models based on the Windows 10 operating system. Microsoft’s Lumia line of smartphones had a great March 2015–ending quarter in India, as its sales grew by a year-over-year rate of 20%, according to a report from Counterpoint. However, Lumia smartphones have failed to attract customers elsewhere.

• The some key principles that make it very hard for competitors to compete with Apple. Service Providers – Maintained control through content access and distribution: Apple understood that applications content are best left for third parties to develop, but maintaining control over access and distribution (including security) were the key elements of the value chain where it had core competencies.
• Technology: While iPhone understood that applications and content were most important, an element of control over the hardware and technology was necessary for success. The iPhone achieved success through Apple’ core competency in product innovation, ensuring that iPhone was highly functional and capable of producing a rich mobile internet browsing experience. Thus it is highly important to ensure that technology plays a strong supporting role to applications and content.
• Business Model – Developed a business model based on core competencies: The device-centric business model of the iPhone has been the strongest factor in the success. The iPhone launch went against traditional wireless business models and showed that device manufacturers could successfully control the necessary portions of the value chain and allow all players to be profitable and successful.
• Regulatory – Apple made regulations worked for them: Instead of working against regulations, Apple has accepted the regulatory factors, and worked within them to launch products and services that comply yet achieve high levels of success.
• Demographics – Apple targeted the right group of adopters: Apple targeted young, technology savvy individuals rather than business. While other Smartphone and mobile data and Internet services targeted business (e.g. RIM), iPhone proved there is a strong market in personal use rather than assuming an initial target of business, and expecting consumers to follow, it is possible to reverse this, targeting personal usage first with business usage following.
• User Preferences – Understand and meet preferences: Apple focused on entertainment applications and services rather than business applications, clearly meeting the needs of their consumers. By fully understanding user preferences and designing content and applications that meet these preferences, there is a large untapped market potential in mobile data and Internet products and services.
• Culture – Find and exploit cultural niches: While culture varies by country and within countries, Apple finds it relevant for the iPhone to find cultural ‘niches’ that it could fill. These cultural niches have been filled for the most part through the applications and services provided, rather than the mobile devices, indicating that regardless of the hardware platform, cultural preferences can be met through software and content.
• Marketing – Focus on fulfilling consumer needs: For the iPhone, Apple markets the services provided, rather than the hardware, focusing on what the products and services can do for the consumer, rather than the specifications, Key to success is not focusing on products, but rather the fulfillment of consumer needs
• Apple stays at least two years ahead of its competitors
This is the one that scares Apple’s competitors the most. While those competing with Apple are just getting products to market that are competitive, Apple is already working on the products at least two years out. For example, the new iPhone on the market was designed and signed off on two years ago. This is a nightmare for Apple’s competitors and will continue to be for some time with this strategy of Apple Company on iPhones. Apple CEO Steve Jobs watches a video of the new iPhone 3G as he delivers the keynote address at the Apple Worldwide Web Developers Conference June 9, 2008 in San Francisco, California.
Technology has been a consistent bright spot in the U.S. economy over the past few years, and no company has epitomized that better than Apple. With the help of Steve Jobs, a business genius, who, executed the most successful corporate turnaround so far in this century.
• Infrastructure – Apple took the advantage of the available infrastructure in the US by working within the infrastructure of the individual countries and exploiting areas underserved due to infrastructure issues, the iPhone has been able to succeed. Due to the strong fixed lone infrastructure in the US, Apple stressed richness in its applications, attempting to replicate user experience with fixed lone Internet. Much like the regulatory factors, by working within and taking advantage of the existing infrastructure, companies in the mobile industry can achieve success.
Failure factors of Apple (

1. The stock is expensive
Blodget argues that Apple stock is cheap since he claims it trades at a P/E of 9 — less than the market average of 15. Moreover, he argues that if Apple just keeps generating cash at the rate of $40 billion a year, an investor could buy the company today for $390 billion, pocket its $150 billion of cash and just wait six years to get Apple’s business ”free and clear, for nothing.”
But both of these arguments only make sense if the assumptions about Apple’s future financial performance are correct. For example, if you believe that a stock is cheap when its P/E is less than its earnings growth, then Apple is very expensive. That’s because its earnings shrank at a 17% rate in the first quarter of 2013 and are expected to fall nearly 1% for all of 2013. Nor is it clear how these trends will yield $40 billion a year in cash flow.

2. Apple has nothing new in the pipeline
Blodget writes that “excitement should begin to build about the iPhone 5S, the new iPad Mini.” He admits that these products are nothing new. Moreover, based on the bored reaction from my students last fall to the iPhone 5′s announcement, many may shrug should Apple release these “new” versions of old products.
Many will conclude that there is no compelling reason to replace their current iPhones. Or, perhaps they will buy the latest offerings from Samsung and other Android makers.
• Without Jobs, Apple’s management has lost the ability to innovate

Blodget argues that the team that helped Steve Jobs introduce new products is still at Apple. The absence of innovative products from Apple since Jobs death is compelling proof that his team is not able to take over where he left off. In fact, the fiasco with Apple Maps shows that the team can do harm — rather than merely fail to innovate.

• A cheaper iPhone marks the end of Apple’s leadership
Blodget argues that a cheaper iPhone is in the works and that’s good for Apple shareholders. But if Apple goes ahead with that cheaper version, its margins will shrink and that will mean further profit declines.
• If a company is going to attract capital, it must have a competitive advantage. There are two ways to get that — Differentiation — delivering a better product for which customers pay a price premium or Low Cost Producer — making an adequate product, charging customers the lowest price and profiting by lowering costs below competitors’ levels.

• Apple’s competitive advantage used to be Differentiation – it made better products for big existing markets like MP3 players, smart phones, and tablets – that caused Apple’s appeal to investors and customers to soar.

• A cheaper iPhone marks a fundamental shift in strategy to Low Cost Producer. And it is highly unlikely that Apple — with its enormous fixed costs including a $5 billion headquarters complex under construction in Cupertino – will be able to lower its costs below competitors’ in order to win as the industry’s low cost producer.


Introducing Apple to developing countries can be seen as an opportunity to make market expansion. This day's developing countries like Indonesia, India and some part of Africa (like South Africa) have started showing interest in international market strategy. Apple can consider price reduction in terms of product quality and design to fit the emerging market in developing countries.
For better business opportunities, introducing online social networks can be seen as an advantage for Apple to build good relationship with its customers. Social networking can be a great benefit for customers to share their experience with each other about the product they purchase. And it will enhance customers' knowledge about different Apple products and technology. The company can also benefit in getting feedback from customers experience. Feedback about product or serviced offered helps the company to make further development and to understand what consumers expect and value from a product/service and this gives an advantage to improve band image.

The broad differentiation generic strategy has Apple must continually develop innovative products so that the firm always stands out against competitors. Competitors eventually catch up with new products, so the broad differentiation generic strategy compels Apple to always innovate to keep itself always ahead of competitors. Thus, continuous innovation is one of Apple’s strategic objectives based on the broad differentiation generic strategy. In addition, the company must ensure that it keeps expanding its market reach. In this generic strategy, Apple does not focus on any specific market segment.


Apple is a technology company, which designs produces and sells goods of the computer, Music and Mobile-phone Industries. It is differentiated by its brand perception and identification. Over the last couple of years, Apple has become a cult-brand, thanking its Life, iTunes, and QuickTime and iMac lines. Apple’s short term goal is currently increasing the sales of the just launched iPod (the most innovative web=browser in market). In the long-run, Apple aims for the top of the market, becoming the number one leader.

Apple has incorporated numerous features that are unique and well known in the market today. We consider that there are several Apple products with several appealing features such as iMac, iPod, iPhone and iPad. These products represent a revolutionary ear for the development of Apple. By placing such products in the market, Apple has attracted a lot of customers in one way or another. Highly advanced technology, simplicity and design, and the sense of luxury are the main features integrated in the mobile phones of Apple. Moreover the comfort and convenience that iPhones provide are very crucial.

“Think Different”

One of the main reasons which will inspire you to choose iPhone is its unique, simple and luxurious image that Apple has created in the market over the years. “Think differently” which is an inspiring motto, made us believe that simplicity and creativity combined with luxury can lead to a successful and profitable company, such as Apple. Another component that we found to be challenging for us was to understand Apple’s goals, objectives and their secret of being successful. A very important fact about Apple Company today is that its iPhones are globally spread. This has created among us the idea that iPhones are no longer luxuries but real necessities due to the technological developments. Owing an iPhone today definitely will make your life easy and simple.

• Akan, O., Allen, R. S., Helms, M. M., & Spralls III, S. A. (2006). Critical tactics for implementing Porter’s generic strategies. Journal of Business Strategy,27(1), 43-53.
• Allen, R. S., & Helms, M. M. (2006). Linking strategic practices and organizational performance to Porter’s generic strategies. Business Process Management Journal, 12(4), 433-454.
• Apple Inc. Form 10-K, 2014.
• Apple Info.
• Bajarin, T. (2014, July 14). Understanding Apple’s ‘Continuity’ Strategy. Time.
• Kosner, A. W. (2015, February 16). Can Apple’s Expanded Strategy Push It To $1 Trillion Market Cap? Forbes.
• Parnell, J. A. (2006). Generic strategies after two decades: a reconceptualization of competitive strategy. Management decision, 44(8), 1139-1154.
• J. West and M. Mace, “Entering a Mature Industry through Innovation: Apple’s iPhone Strategy

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