Apple Case Study
Number of words: 1472
Steve Jobs vs. Tim Cook
Apple Inc. is one of the world’s largest technology companies with annual revenue more significant than the GDP of countries, including Kenya and Tanzania combined (Schultz et al. 53). In 2019, the company attained an income of over 200 billion dollars, and it is one of the companies with a well-defined strategy (Adyl Aliekperov 46). Apple’s success did not stat overnight as it is a journey that began with Steve Jobs, a college dropout who changed the way people view computer technology. Steve Jobs was a leader and a visionary; he developed an idea into a multibillion business. Jobs was a man that could change the world many times over. However, his successor, Tim Cook, is well defined and oriented than he was. Steve Jobs brought Tim Cook into the company in 1998 after his return to Apple, and since then, he enabled a business that was crushing to grow even more significant (Hunter et al. 426). He solved the company’s uneven supply problem by allowing Foxconn to assemble its products (Hunter et al. 427). The leadership of Cook is seen by the company’s leadership and competitive strategy in the sector. He introduced the Apple Watch, Airpods, and Siri products that have continued to increase its income even further. Jobs started the company, but Cook directed it to success; therefore, on a scale of 1 to 10, Cook deserves an 8.
Apple’s Go-To-Market Strategy
Apple has many products; however, this does not mean that these products are sold in the same way or in the same market. Apple’s PC market is different from the iPhone market, and more importantly, the products’ marketing strategies differ significantly. The Mac Pro was promoted based on value and designed for experienced people who needed to build high bandwidth capabilities (Hsu 227). Apple’s Mp3 player was created for the music lovers who loved music but could not manage the stress of carrying cd cassette. The Mp3 player completely redesigned how people listened to music. Likewise, Apple’s first mobile phone targeted both the phone market and the iPod market. These were the people who needed their music players but could not deal with the pressure of carrying both the music player and their phones. Another factor that made the iPhone popular is that it introduced an easy to use mobile phone software (Hsu 224). Apple has many other products, including the iPad and Apple Watch; however, two elements remain consistent in all these products: simplicity and differentiation. The company targets a consumer base that appreciates simple and unique products with great value. This generic go to market strategy allows it to gain a competitive advantage over other companies, including Samsung.
Additionally, Apple is a well-established brand with a cult-like following. This is one of the many strengths the company enjoys. Other notable strengths include a high-profit margin, which provides extra revenue to invest in research and development. Also, the company has an effective rapid innovation process that enables it to maintain market leadership. On the other hand, its weakness includes a limited distribution network triggered by its exclusivity policy. Apple carefully selects and authorizes sellers of its products, and in some countries, particularly in Africa, it can be challenging to locate Apple shops (Adyl Aliekperov 46). The company can capitalize on the limited distribution network to increase its sales. Notably, this opportunity directly relates to the company’s weakness in limited distribution. Despite the company’s success and achievements, threats remain, and one of these threats is competition. Technology is always changing, and companies know how to lead in this sector are termed successful. Apple competes with Samsung, a company that increasingly invests in innovation.
Apple’s Financial Performance
Nevertheless, and despite the threats and the increasing competition, Apple remains profitable. In 2018, Apple’s revenue hit 265 billion dollars (Mohamad Yusoff 21). About 218 billion dollars came from iPhone sales, meaning that the smart device was responsible for over 80 percent of the company’s total revenue in that financial year (Mohamad Yusoff 27). This was a significant increase from the 150 million units sold in 2013 and 40 million units sold in 2010. The company also increased the annual sale of the iPad in the same year. The iPad contributed a 6.5 percent revenue increase in the fourth quarter of 2018 (Mohamad Yusoff 27). In 2019, the company’s revenue was expected to decrease due to the US-China trade war. The trade war negatively affected the company, particularly its shares, which dropped by an average of 2.5 percent after the president announced a 10 percent tariff on all Chinese imports. In the same year, the company also slashed its iPhone prices following trouble with currency rates, which affected the iPhone’s sale. Between 2016 and 2018, the company’s revenue grew by 22 percent, and from 2018 to 2019, the revenue declined by 2.04 percent.
Key Elements in The Value Chain
Ninety percent of the company revenue comes from the iPhone and iPad sales, and more importantly, several elements have been critical to the increased sale of these products (Mohamad Yusoff 15). The first element is the inbound company logistics. Apple has an extensive supply chain and faces minimal challenges in terms of accessing raw materials. It has over 200 suppliers who ensure that components arrive at its factories in time (Clarke, and Boersma 117). The constant supply of raw material and the well-designed supply chain ensures that the market has enough iPhones and iPads. Another element that secured the success of these products is the company’s well-defined operations. For instance, Apple outsources the production of much of its products in countries like China, where labor costs are low (Clarke and Boersma 121). This aspect allows for a more significant profit margin and extra revenue, which is later invested in design and research. Apart from production and inbound company logistics, Apple is a famous brand, and new product launches from the company receive an overwhelming news cover that offers it free marketing. Nevertheless, this does not mean that the company does not market its brand. Apple makes unique marketing ads that correctly engages its customers. The iPhone and the MacBook are the two essential products that will remain important in the future; therefore, the organization should focus on developing these products.
Apple’s External Variables
As much as capitalizing and improving on products, including the MacBook and iPhone, is essential, the company should address the issues within its external business environment. First, Apple should study the ever-changing political landscape as it affects much of its business. The US-China trade war has proved that international politics can affect a company’s earnings. However, the company should always look out for aspects within the political environment that can better the company. For instance, it should look forward to improved free trade policies, which are often created over time. Another factor is the economy. Most economic factors in Apple’s environment generate opportunities. For instance, economic stability in developed countries creates expansion opportunities.
Apple’s Prices and Recommendation
Also, and because the company’s profit range is high, it can lower the prices on products such as the iPhone to capitalize on developing economies. Moreover, introducing expensive products such as the iPhone X is not a suitable strategy for the company. The mobile phone market is saturated with products. Some perform in many ways like the iPhone X, and Samsung Galaxy S10 is an excellent example. However, Samsung Galaxy S10 is cheaper than iPhone X. To avoid this situation, Apple should also consider lowing its prices to penetrate developing economies. If the company can reduce its product prices and increase its efficiency, and more importantly, develop new models in products such as the Airpor earphones, and iPhone it will attain further growth and significantly expand its user base.
Adyl Aliekperov. ““Apple” – Up or Down.” International Journal of Innovative Technologies in Social Science, no. 6(18), 2019, pp. 43-48.
Clarke, Thomas, and Martijn Boersma. “The Governance of Global Value Chains: Unresolved Human Rights, Environmental and Ethical Dilemmas in The Apple Supply Chain.” Journal of Business Ethics, vol. 143, no. 1, 2015, pp. 111-131.
Hsu, Yen. “Design Innovation and Marketing Strategy in Successful Product Competition.” Journal of Business & Industrial Marketing, vol. 26, no. 4, 2011, pp. 223-236.
Hunter, Samuel T. et al. “Partnerships in Leading for Innovation: A Dyadic Model of Collective Leadership.” Industrial and Organizational Psychology, vol. 5, no. 4, 2012, pp. 424-428.
Mohamad Yusoff, Nur Husnina. “Determinants of Risks and Performance in Apple Inc.” SSRN Electronic Journal, 2018, pp. 1-32.
Schultz, Nicolai et al. “The New Role of Developers in The Mobile Ecosystem: An Apple and Google Case Study.” 2011 15Th International Conference On Intelligence in Next Generation Networks, 2011, pp. 23-71.