History of Apple Inc.
Apple Inc. is currently one of the world’s most recognised and remarkable brand in the technology field. Since its incorporation in 1976, the company has achieved many milestones in consumer electronics, software, hardware, and digital distribution industry. It is the first ever technology company that has reached a market valuation of $1 trillion (Davis, 2018). The company offers its services across the globe which includes major markets such as the United States, Canada, the United Kingdom, and China. Its headquarters is situated in Cupertino, California and it is a part of one of the big four of technology along with Amazon, Google, and Facebook (Rawlinson, 2017).
The company has opened 506 retail stores in 24 countries from which 272 are located in the United States (Macrumors, 2019). The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne and currently, its CEO is Tim Cook. The total number of employees of Apple has reached more than 132 thousand in 2018 (Statista, 2018). The organisation reported annual revenue of $265.6 billion in the 2018 financial year. It is one of the most valuable brands in the world with a positive brand reputation and a high rate of customer satisfaction rate. Due to its market share, the company has generated a competitive advantage over its competitors and built a loyal customer base.
Apple serves a wide range of customers that include children above 13 years to older people above 75 years. The customers of the company are diversified since its products are sold on a global stage. They belong to different race, caste and religion which require Apple to take appropriate actions to maintain and protect diversity interest of customers (Latif, Jaskani, Ilyas, Babar & Gulzar, 2014). Mostly, the mid to high-income individuals are the ones who purchase the products of the company; however, older generations products of the company are also popular among low-income individuals. Customer loyalty is strong in the case of Apple since customers are tied into its “ecosystem” after which they are likely to purchase Apple’s products in the future.
The mission statement of Apple provides that it designs various revolutionary products such as personal computers, OS X, iLife, iWork, and other professional software. The company also lead to the music revolution through its products such as iTunes and iPod. The company has also reinvented the smartphone industry by launching the iPhone and App Store. The organisation achieves this mission by complying with its core values are offering great products which disrupt industries which are highlighted by the mission statement of the company (Narayan & Ramu, 2018). The company also believe in collaborating with other experts while developing products and saying no to those products which did not focus on its core values. The company accepts its mistakes and maintain a sustainable ecosystem which is managed through its products.
Global Presence of Apple Inc.
The vision of Apple provides that it is committed to bringing the best personal computing experience for students, creative professionals, educators and consumers from all across the globe through its innovative software, hardware and internet offerings (Brennan, 2013). It shows that the company focuses on the interest of a wide range of stakeholders while developing its products to cater to their demands while developing its products. The company also prioritised its customers above anyone which shows that the company did not operate to maximise profits for its shareholders. The future of the company is supported by this vision, and through its core values, the company is likely to introduce products which will help a large number of people such as introducing ECG in its smartwatch which was considered as a medical marvel and it brings the healthcare and technology industry further (Dickey, 2018).
Apple Incorporation has adopted a growth corporate legal strategy to manage its operations. Based on this strategy, the company focuses on expanding its number of markets in which it offers its products and services. The growth of the company is achieved through increased revenues, market share and number of employees. The company sustains its growth by using concentration, horizontal integration, vertical integration and diversification (Nam, Nam & Kim, 2015). Particularly, the company focuses on innovation-based growth strategy through which it maintains its concentration on a specific number of products and improves them each year for its customers.
The company has control over both vertical and horizontal integration which enable the company to manage different parts of its manufacturing process. For example, the company closely handles and monitors its manufacturing process to maintain precision in its products which cannot be achieved otherwise (Kane, 2015). Moreover, it controls both the software and hardware ecosystem to ensure that its customers receive the best products. Lastly, the company focuses on diversification by launching new products and services to expand its customer base. For example, the company has recently launched news and music subscription service for its customers to diversify its offering.
Apple’s business-level strategy focuses on fostering innovation and promoting the development of its products through innovation. The company has adopted a focused differentiation strategy because it manufactures products which are exclusive and expensive for a particular customer base. The company focuses on improving the quality and features of its products and services each year while catering to the demands of customers (Chen & Ann, 2016). The focus enables the company to align its business strategy along with its core values. Due to this focus of the company on a few products and control over its operations from design to implementation to retain provides a competitive advantage to Apple. For example, the company offers a premium range of personal computers and laptops which are not customizable, and the customers can only select between the customisation options offered by Apple (Kapoor & Agarwal, 2017). The company also develop the software for its products, and it prohibits them from running third-party application on its devices. The objective of these actions is to provide a secure environment to its customers by closely monitoring different aspects of products and services which shows the focused differentiation strategy of Apple.
Customer Base of Apple Inc.
A key strength of Apple is its control over its supply chain of all its products which provides it a competitive advantage. The organisation controls hardware, software, selection of materials and retailing option for its products which is not the option for its competitors such as Google, Samsung, and Sony. This control enables the company to offer better customer experience and offer high-quality products and services to customers (Mayo, 2018). A large number of financial resources also provide a competitive advantage to Apple since it is the first technology company to achieve the milestone of $1 trillion market capitalisation (Davis, 2018). The company also has a positive brand image due to its sustainability practices which justify its high prices and increased its sales. For example, the company powers 100 percent of its stores from renewable energy worldwide.
Matching customer expectations is a major weakness of Apple since its customers expect the company to offer new services, designs and features in its products every year which is not possible due to which its sales have decreased in the past few years. Apple’s products and services are incompatible with third-party software and accessories which restricts users’ options, and it reduces its sales (Gupta & Prinzinger, 2013). Currently, the company only offers 7-8 products which are comparatively way lower than the product line of its competitors such as Samsung and Xiaomi that offers products for a wider range of customer segment (Latif, Jaskani, Ilyas, Babar & Gulzar, 2014).
Apple can diversify its product offering by introducing self-driving cars and smart home appliances which will increase its market share. Technological advancements will enable the company to improve its products while offering them at lower prices which will increase its customer base in developing countries. A recent study found that 73 percent of millennial customers prefer to pay extra for sustainable goods based on which Apple can use its positive environmental friendly image to increase the prices of its products and services (Curtin, 2018).
Market penetration in the smartphone industry is dominated by Android devices because 85.1 percent of the market share is held by android users whereas there are only 14.8 percent of IOS users (Jones, 2018). This is the case with computer products of the company as well because there are 100 million active Mac users whereas there are 1 billion Windows-powered personal computers across the globe (Warren, 2017). As the market of affordable smartphone increases, the sale of the iPhone has dropped in developing countries (Tiffany, 2019). The company has tried to increase its sales by launching cheaper phones such as iPhone SE and iPhone XR; however, only iPhone SE has been a success whereas others have failed.
References
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Chen, C. M., & Ann, B. Y. (2016). Efficiencies vs. importance-performance analysis for the leading smartphone brands of Apple, Samsung and HTC. Total Quality Management & Business Excellence, 27(3-4), 227-249.
Curtin, M. (2018). 73 Percent of Millennials are Willing to Spend More Money on This 1 Type of Product. Retrieved from https://www.inc.com/melanie-curtin/73-percent-of-millennials-are-willing-to-spend-more-money-on-this-1-type-of-product.html
Davis, R. (2018). Apple becomes world’s first trillion-dollar company. Retrieved from https://www.theguardian.com/technology/2018/aug/02/apple-becomes-worlds-first-trillion-dollar-company
Dickey, M.R. (2018). Apple Watch’s ECG feature is already proving its worth. Retrieved from https://techcrunch.com/2018/12/08/apple-watchs-ecg-feature-is-already-proving-its-worth/
Gupta, A., & Prinzinger, J. (2013). Apple, Inc.: Where Is It Going From Here?. Journal of Business Case Studies (Online), 9(3), 215.
Jones, C. (2018). Apple’s iOS Loyalty Rate Is Lower Than Google’s Android, But Apple May Steal More Users Each Year. Retrieved from https://www.forbes.com/sites/chuckjones/2018/03/10/apples-ios-loyalty-rate-is-lower-than-googles-android-but-apple-may-steal-more-users-each-year/#2e433dbb68a8
Kane, Y. I. (2015). Haunted Empire: Apple After Steve Jobs. New York City: Harper Business.
Kapoor, R., & Agarwal, S. (2017). Sustaining superior performance in business ecosystems: Evidence from application software developers in the iOS and Android smartphone ecosystems. Organization Science, 28(3), 531-551.
Latif, M., Jaskani, J. H., Ilyas, T., Babar, Z. K., & Gulzar, H. (2014). Issues faced by Apple Inc in smart phones industry. International Journal of Accounting and Financial Reporting, 4(2), 50.
Macrumors. (2019). Apple Stores. Retrieved from https://www.macrumors.com/roundup/apple-retail-stores/
Mayo, B. (2018). Report: Apple to tighten control on supply chain procurement, cutting manufacturers’ profits, starting with new MacBooks. Retrieved from https://9to5mac.com/2018/06/04/report-apple-to-control-more-of-its-supply-chain-procurement/
Nam, S., Nam, C., & Kim, S. (2015). The impact of patent litigation on shareholder value in the smartphone industry. Technological Forecasting and Social Change, 95, 182-190.
Narayan, S. V., & Ramu, M. (2018). A Study on Organisation Culture of Apple Company. International Journal of Pure and Applied Mathematics, 120(5), 3797-3808.
Rawlinson, N. (2017). History of Apple: The story of Steve Jobs and the company he founded. Retrieved from https://www.macworld.co.uk/feature/apple/history-of-apple-steve-jobs-mac-3606104/
Statista. (2018). Apple’s number of employees in the fiscal years 2005 to 2018 (in 1,000s). Retrieved from https://www.statista.com/statistics/273439/number-of-employees-of-apple-since-2005/
Tiffany, K. (2019). Apple is selling fewer iPhones than it would like. Retrieved from https://www.vox.com/the-goods/2019/1/3/18167072/apple-iphone-sales-down-china-upgrades-q1-2018
Warren, T. (2017). Apple reveals Windows 10 is four times more popular than the Mac. Retrieved from https://www.theverge.com/2017/4/4/15176766/apple-microsoft-windows-10-vs-mac-users-figures-stats
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