Apple Company Recommendation Proposal - Essay Example

? Apple Company Recommendation Proposal of the Background or Problem The demographic shift presents business houses with unique and complex challenges. There are hardly any companies in the world that operate in the market without facing threats from the business environment. The challenges appear from both internal as well as the external environment of the company. In the similar way, Apple is also dealing with certain business challenges and as a result of that the company is losing its market share and failing to tap new market segments. The internal analysis of the company has made it evident that the principal reason behind their declining market share is lack of innovation. Apple is best known for innovative and breakthrough products, but since the last couple of years the company is failing to satisfy customer expectations. On the contrary, Samsung has been able to secure the elite position in the smart phone segment through innovative design and aggressive marketing strategy. Despite creating hype, the latest offering from Apple, iphone 5, failed miserably in the market (Sherr & Ramstad, 2013). Hence, the only solution for Apple is to come up with a new strategy that supports expansion of the business operations and fosters innovation. Discussion Reports suggest that currently Samsung holds 47% of the market share in the smart phone category and Apple holds 38%. However, the scenario was completely different in the last year. Apple was the market leader with 73% share, while Samsung and other companies embraced remaining 27% share. Figure 1 – Smart phone market Share Comparison of 2012 and 2013 (Source: Kulkarni, 2013) The drastic shift in the market share figures of Apple makes it obvious that “something went wrong” for the company. A number of studies shed light on the fact that lack of innovation is the major cause of their failure. Moreover, the smart phone product line of Apple has also remained unchanged since its launch in 2006. The new versions were launched only with some add-on features and applications. However, to satisfy the dynamic needs of customers as well as tap new customer segments, it is necessary to offer enhanced and trendy products. The classic example of Nokia’s failure in the market due to the lack of innovation clearly substantiates the current state of Apple. In the meantime, it should be also noted that the operating system of the phones bundled by Apple is also getting outdated. A recent consumer study on smart phone OS preferences, has reflected that consumers are finding iOS to be stale while the latest buzz, Android to be much more user friendly and exciting. Since the first release of iPhone, it really has not come through leaps and bounds. On the other hand, the competitors of Apple were capable in delivering high quality and pioneering products at a cheaper cost (Tapscape, 2013). Apple has positioned itself as a luxury brand and thus targets high end customers. The primary target segment of the company is customers who are willing to pay a higher price for better experience and prefers using technically upgraded and updated products. As a result of that, price reduction will seriously hamper the Apple’s positioning strategy. Therefore, the only way to make global expansion and regain the lost market, the company needs to come up with something inventive and modern. Methodology and Analysis In order to find a solution to the problem, the study has considered collection of data from both primary and secondary sources. Secondary data were mostly collected from authentic electronic sources and journal articles. On the other hand, the primary data was collected directly from the consumers of high end mobile phones. According to Treloar (1999), product innovation involves coming up with something new or sufficiently different (p.253). Likewise, Linder (2006) and Holmquist (2012) believe that innovation plays a crucial role in driving profitable growth. The author further mentioned strong research and development is one of the key promoters of innovation. Hence, product innovation requires strong research and development infrastructure. The same theory has been acknowledged by Binder & Witt (2011) stressing on the fact that there is little doubt that innovations drive economic growth (p.1). Therefore, offering customers something new or which they are yet experiences will be a great option for Apple to salvage the market position. The study also conducted primary research to unearth consumer preferences about smart phones. The data from the field work reveled that around 88% of the consumers using smart phones prefers using user-friendly and modernized operating system. While the rest 12% likes to stick with their existing ones. Figure 2 - Consumer Preferences of OS On asking them about the features they would like to have on phone, most of them emphasized on the bulk memory space, better camera quality, document viewer and editor and internet connectivity option. However, some of them also judges product design as one of the key features. Figure 3 – Desired Features Around 73% respondents stated that they would like to use new products, rather than sticking to the old. Directly asking them about Apple’s present offerings, most of them stated that they are highly unsatisfied and put emphasis on the fact that tedious and repetitive products are the cause of low acceptance. Figure 4 – New or Old Figure 5 – Upset or Happy with Apple’s offerings Recommendation and Conclusion The study revealed that Apple is losing market share and failing to tap new market segments due to the lack of innovation in their offerings. The primary survey has made it evident that lack of innovative products is the reasons behind low sales and decaling market share. However, to curb this issue and expanding Apple’s operation in the global market a set of recommendations are presented. The recommendations for the company are as follows: - Apple is recommended to launch a new product that encompasses latest features as well as a new operating to compete with Android. The company is recommended to make drastic changes in the product design to make customers feel that they are being offered a new invention. The company is also recommended to improve the battery life and integrate features such as skin temperature sensing, naked eye 3D display and telescopic view among others. The company should follow its existing wholly owned subsidiaries strategy to enter the global market as it will offer them better control over the operations. With a new operating system, long battery life, additional feature and a new design, the company is surely expected to regain its lost share of market and can reach out to the global audience. References Binder, M. & Witt, U. (2011). As Innovations Drive Economic Growth, Do They also Raise Well-Being? Retrieved from https://papers.econ.mpg.de/evo/discussionpapers/2011-05.pdf. Holmquist, L. E. (2012). Grounded Innovation: Strategies for Creating Digital Products. Massachusetts: Elsevier. Kulkarni, V. A. (2013). Samsung and other players have grabbed chunks of Apple's market share in the last year. Retrieved from http://www.knowyourmobile.in/samsung/8090/apple-no-longer-invincible-premium-smartphone-marketplace. Linder, J. C. (2006). Does innovation drive profitable growth? New metrics for a complete picture. Journal of Business Strategy, 27 (5), 38 – 44. Sherr, I. & Ramstad, E. (2013). Has Apple Lost Its Cool to Samsung?Retrieved from http://online.wsj.com/article/SB10001424127887323854904578264090074879024.html. Tapscape. (2013). Apple's stock drop shows lack of pure innovation. Retrieved from http://www.tapscape.com/apples-stock-drop-shows-lack-of-pure-innovation/. Treloar, A. (1999). Products and Processes: How Innovation and Product Life-Cycles can help Predict the Future of the Electronic Scholarly Journal. Retrieved from http://www.bth.se/elpub99/ap.nsf/08c6c2f88424ad99c12566ff002a0c10/d8acd24bab1f7220c12566ff0034fd67/$FILE/250-260.pdf . Read More