Apple's Secret of Success - Case Study Example

Apple's Secret of Success Apple Computers Inc. was cofounded by Steven Wozniak and marketed by Steven Jobs. It was later renamed to Apple Inc. Apple Inc. is involved in the manufacture, marketing and design of PCs and related software, network solutions, services and peripherals. The company is also involved in developing and designing of portable digital music players with related services and accessories. This includes online distribution of audio books and third party music, videos and films. The company does this through its own retails stores, online stores, third party resellers and wholesalers and direct sales force. In 1976, the two founders introduced Apple I which was the first (Schneiders, 29). The Apple 1 failed but was closely followed by the launch of Apple II, which was successful. This happened in the year 1980. In the same year, the company offered its IPO. Competition from the PC market coupled by internal difficulties led to management crisis and management changes. In the year 1983, the company announced danger with the entry of international business machines (IBM) which was followed by failure of Apple III. Apple introduced the first mouse driven computer in 1984, the Macintosh. By 1990, the PC clones had saturated the market while Microsoft had launched an operating system which had a graphical user interface. Although Apple launched the Power personal computer in 1994, the problems of the company continued. This caused the company to have a 1 billion dollars backlog. The situation was made untenable when Microsoft launched Windows 95 operating system. In the 1980s, Apple’s most fierce rivals were Amiga and Atari groups. IBM had become more popular than all the three companies by the year 1990s. They had developed a graphical user interface through the use of windows 3.0 and thus were outcompeting Apple. Apple was performing poorly in the market. Apple responded to the threat by developing a profusion of Performa, Quadra and Centris. However, these new lines were marketed poorly. Apple was arguably the worst-managed companies in the computer industry. Apple was also suffering from too many models, which were only differentiated by minor improvements in their technological specs. The presence of many arbitrary models from Apple confused customers and destroyed the company’s reputation. Apple’s retail resellers like CompUSA and Sears failed to make any sales or even displays for Apple products effectively. Macs were cheaper than PCs given their components. However, poor marketing made them look expensive and customers never identified with Apple products. Apple inventory grew as it consistently underestimated the demand for popular models while overestimating others. This caused the workers to be demoralized. Around 1996, the world had believed that Apple was on its deathbed. The company lacked a marketing plan. Its products were priced higher than others in competition. The company had fallen the top five in the United States sales. The company was struggling financially with other companies continued to grow substantially. In 1997, G. Amelio was ousted as CEO by the board of directors paving the way for Steve Jobs (Schneiders, 59). Apple and Microsoft signed a deal for cooperation. In a speech, the CEO of Microsoft said he was happy to help Apple return to success. There was no doubt Apple was struggling, and the new Apple chief executive was determined to change that direction the company was taking. Apple began to focus on its purpose and success. This was echoed by the new chief executive officer of the Apple Company. Jobs announced in the speech that for Apple’s success was not tied to Microsoft’s failure but on hard work and strategic partnerships. Under Steve Jobs, Apple Inc rose from its deathbed to become the most valuable company with its net worth being close to $600 billion presently. The strategy of Apple Inc. concentrates on undifferentiated products with the target being the entire market. Apple Inc. used a straightforward marketing mix to sustain its profitability and momentum. Market needs tend to be similar, and the marketing mix is effectively used. Apple Inc. positioning strategy is concentrated on comparing what they can do with what they competitors can do. This assists them in knowing the decisions to make in taking their place in the market. The target market of Apple Inc. involves all sectors of society. They aim at providing company resources to the young or old, boy or girl. The company uses different marketing strategies to appeal to this target market and cater for their tastes. Apple Inc. makes sure all the stores and branches are stored in the most profitable places where clients can be access the products with ease and convenience. The company tries to minimize competition in the area of branch locations. The Apple Inc. market segment is split into classes with specialized prices for each segment. This makes sure that the products are affordable to all. Apple has grown to challenge Microsoft and had become the world’s leading technological giant. Apple Inc. has support service for its products. The company’s website has downloads and other support systems for customers who purchase the products. This includes helpful information in case a product is not functioning properly. Apple’s goods are among the most admired. Its retails shops are more often than not extremely crowded (Schneiders, 90). According to Heidi, Apple introduces several things that are extremely sleek and smart hardware. The software from Apple is superb with a trendy, hip image according to E. Clemens. A case study showed that the Apple looked different when faced with steady challenges to its distinctiveness. According to Yoffie, the most strategic change was the introduction of iPod and iTunes. Another crucial factor is Apple Inc.’s cohesive corporate culture that actively fosters shared values and beliefs among partners and employees. A common understanding and passionate determination are central to hat culture. Apple is obsessed with a commitment to deliver the right experiences and capabilities to delight customers. Apple’s culture is driven by passion and excellence in their everyday conversations. These values fuel passionate collaborations and creative juices that deliver award-winning services and products on an annual basis. Apple’s remarkable success never sprung overnight. It is a result of three decades of pursuit of excellence. The Apple designs are aesthetic and easy. This makes them a perfect balance of function and form which is crucial in the elimination of friction points in terms of usage in comparison to other competing products (Schneiders, 61). This demands that Apple works extra hard to ensure product quality and innovation continued unrivalled in the market. This has been a significant marketing tool for Apple because customer loyalty has been on a tremendous growth path. The corporate culture at Apple is both consistent and enduring. This culture offers a startling contrast to that of most companies. Most companies settle for just smart enough products. Apple is known for selling products at high prices. However, the market share is still growing, evidence that customer prefer quality to cost convenience and are willing to pay for what they believe in. the iPod released in the year 2001 was influential in that it marked the Apple revolution. Apple was intentional about marketing what they believed would be the first highly marketable, convenient and functional MP3 player. It appealed to all classes of people though it never introduced any new features. It became an instant success and sold quickly. The introduction of iTunes music store and online digital media store made their product user-friendly. This attracted a massive sale of iPod and today it comprises of 75 per cent of the MP3 players in the market. ITunes account for 70 per cent of all worldwide music purchases. Apple Inc. has other products as well although they are expensive. Apple continues to innovate and make quality user friendly products (Schneiders, 83). Apple computers were known for their webcams and photo booth software. Apple struggled to innovate in the 1990s, but its uniqueness has brought it ahead of other market players. Apple is full of brand zealots who make sure that they tie Apple’s reason for being to the human spirit animation. The Apple strategy is not just about beauty into the designs but inspiration to the mind and heart. A meaningful purpose that inspires employees to do their best has been a long term advantage in the market. Apple enjoys a high level of brand awareness (Schneiders, 29). Promotion is part of the marketing mix in any successful organization. Apple marketing mix is facilitated by a strong reputation for its products. Promotion of Apple products is received positively because of brand loyalty from its customers. Apple Inc. runs ads to create awareness for its new products. The company’s strong brand creates barriers to the market entry by new competitors. Apple leverages brand image to differentiate its drive for sales and product offering. The marketing mix has a pricing component. Apple is known to be expensive when selling its product. However, the strong brand reputation and quality services tend to overshadow this as customers justify the high prices with the quality of products of services they get from the company. Apple products have been bought in large scale notwithstanding the high prices. For Apple to remain competitive, investing in research and development (R&D) is vital. The company also believes in marketing and advertising with an aim of sustaining and maintaining its market share. Apple’s research and development spending aim at delivering timely products and updates to its customers. The company is keen in enhancing its present line of operating systems, professional software applications, displays, personal computers and software applications. The company hopes to develop new product areas like wireless technologies, rack-mount servers and RAID storage systems. Therefore, Apple invests in marketing and advertising programs (Schneiders, 93). This increases brand awareness. The company uses a variety of both indirect and direct channels of distribution. The company uses knowledgeable salespersons to convey the value of its hardware, peripheral integration and software. This has enhanced the sales of Apple’s differentiated and innovative products. Apple believes that providing high-quality sales and after sales services and support is crucial in attracting and retaining customer loyalty. The company has opened its own retains stores both in the United States and internationally to ensure high quality buying experiences for its products. The move has also improved Apple’s distribution capabilities. In conclusion, a reflection on the direction of the company reveals that it is faced by a future of stiff competition. This may result in court battles among other challenges. Apple is poised to pull further ahead of competition given its current success and its organizational conduct and reputation. Expectations are high that the company shall continue to introduce quality and attractive products and maintain its technological innovation standards. The company is expanding into new markets, and it meteoric rise continues to stun investors. In the foreseeable future, Apple will dominate technological market and make profits. Works Cited Schneiders, Sascha. Apple's Secret of Success - Traditional Marketing vs. Cult Marketing. 1st ed. Diplomica Verlag, 2011. Print. Read More