Global Business Situation and Opportunity Analysis - Apple Inc - Case Study Example

Global business situation and opportunity analysis Apple, iphone Insert Name Course, Class, Semester Institution Instructor Date Executive summary There has been a tremendous advancement in the technology industry worldwide. At the wake of this period, many innovations are coming up, some even beyond our wild imagination. With such advancements, the key markets players have a role to play in the consumer world to ensure their innovations not only reach the intended target population but also satisfy their intended needs (Dahringer, 2006). With the cut throat competition from rival companies, each company has to come up with its own strategies and plans to remain relevant and competitive in the market. In the study of Apple incorporation (Apple Inc.), a leading manufacturer of techno-savvy gadgets in the global market, it adopts different methods to keep afloat with the stinging competition from its big rivals. The company banks on its strengths, weaknesses, opportunities and threats to drive, control and command a big share of the global Smartphone market. Smart phones being the choice of the day as different market topographies indicate, the manufacturers have to capitalise on the situations available and their strengths to harness more revenues if market share and penetration is anything to go by. Competing companies therefore have to be futuristic in their innovations of products to present to the market. For the case in this report, iphone, Apple Inc. has to be proactive in all aspects of its noble product that has brought about revolutionary changes in the smart phones sector. The company has always counted on its high level of innovation to outwit its rivals who pose a great threat considering their products are priced relatively cheaper as compared to Apple’s similar products. Therefore this report seeks to bring out a strategic marketing plan that can form part of the solutions to ensure Apple Inc retains its dominance and market share while competing favourably in the global business platforms. 1. Introduction This report will look into a single product line or segment over a wide range of the products that Apple Inc has in the market, the iphone. This is one of the latest innovative products that the company has produced in the recent past. It is a device fitted with several utility applications besides the sole basic purpose of telephones; voice communication. With over 55 million pieces already sold, the devise commands a great global market share of about 70% which makes it a successful product segment. Iphones can do incredibly a lot of things that modern home computer can perform. Its portable size and availability in different colours, it makes it a devise of choice for the wide market. Sensitivity to customer needs plays an integral part in product acceptance by the market. This is an aspect Apple Inc has managed to use to propel its revenues. The Smartphone as a product is able to cater for the different individual needs and cuts across the different age brackets. Its suitability ranges from use by the business class that have deals to close and communicate to their families and also the young who are after entertainment besides adopting current technological trends in products. This clearly fits the mission and objective of the company as a provider of innovative and best experience in computing to people of different walks of life. Situation analysis According to the current global technological trends, companies that are able to adjust swiftly to the emerging trends will find themselves technically knocked out of competition (Singla, 2010). A company has to be at par with the global changes so as to be at an advantage in creating and maintaining a market niche for itself. With this highlight, therefore it is evident that Apple Inc has been able to anticipate the global customer needs and make products that suit the different customer needs. With a majority of the world population being made of the younger generation, the company has moulded the iphone to attract in its demography. This generation is majorly interested in products that provide entertainment through music and provide a friendly user inter phase in social media. With an application store that has thousands of applications for consumers of Apple products to download from, this product diversity has seen Apple generate revenues up to 111% in the recent past. The consumers on the other hand are able to get applications that are tailored to meet their specific demands. This sense of innovation by Apple Inc has seen the devise being hugely accepted by this market and creating a strong brand in the market. Iphones have also touched the business class. This is a group that is on business travel most of their times and need constant communication in various modes such as email, instant messaging and monitoring their stocks (Singla, 2010). Apple has been able to integrate this need in its products and this class of consumers has been catered for. It is evident that the two forms of target markets for Apple are quite different but nevertheless their needs have been addressed appropriately. Although the demographic distribution may be distorted depending on the different places across the globe, the company has still been able to penetrate these markets effectively. Communication channels Globally there are different methods of communication. The channels are wide and they vary from radio communication, print, television communication to internet. These sources of communication create a media impact that touch closely on the consumers of the product (Dahringer, 2006). Radio and television have a wide presence globally. This also is also a part of technology. Print media too has a cognizable market reach but not the same as that of radio and television. Through this forms of channelling information, information can be relayed to thousands of miles away to the recipient in different parts of the globe. As such, product knowledge is spread which consequently translates into increased market reach for the company. In regards to this report, the best form of a global marketing strategy is through the internet. As the world is fast becoming a global village, information on internet is arguably faster to be relayed than the other channels. This therefore points out internet marketing, through placing advertisements on internet websites and blogs, as the best strategy. Many people all over the globe can have access to internet through different facilities such as their phones, tablets and personal computers. It has proved that it is a force to reckon with in terms of being an effective channel. This is evident from the latest product launch that went viral in the internet with every social site talking about the iphone 5. The channels are available and if used appropriately as a marketing mix strategy it can be a source of opportunity for a company to boost its revenues. Distribution channels For every product that has a specific consumer target group in a market has to identify the best channels to be used to ensure the product reaches the consumer. The seller has to identify which distribution channels to use that not only cut his distribution costs but also safe (Samli, 1995). There are various methods or channels of distribution that can be adopted such as wholesalers and retailers. These middlemen play an important role in ensuring a smooth flow of business and they play a very important role in the value addition chain. The best distribution channel for the iphone would be national chain stores. The national chain stores act as the centre point for individual countries. They are safer and reduce the distribution costs by a greater extent as compared to using the small retail stores (Singla, 2010). Using the national chain stores also helps in maintaining and protecting the brand name. This makes the product more endearing to the target population and customer loyalty is instilled. As much as there are many small chain stores, the national chain store remains the best distribution channel to be employed in the distribution of the Iphones to the target market. Competitive analysis Competition is healthy for companies to grow and realize their full potential (Samli, 1995). It is due to completion that in the mid 1980’s Microsoft Company limited was able to penetrate the market niche and be a household name despite other companies dealing with similar products. It is a brave task that Apple Inc has taken the initiative to face and confidently highlight on the shortcomings of Microsoft products. It is as a result of competition that Apple Inc came up with an operating system that is closed. This means that it is not prone to viral attacks as opposed to windows. Competition ensures that the customer always gets the best product the market has to offer at very competitive prices. In close comparison to other similar products, companies such as Amazon, blackberry, Samsung and HTC with similar also have a product in the market with similar features. Others have come up with their own operating systems such as the android technique. These competing products come in various versions with the latest being an improvement of the previous version. Companies have to find that cutting edge for them to survive in the otherwise very competitive field (Dahringer, 2006). These products are packed in an attractive manner to attract and possibly retain customers. Others have more advanced features and accessories such as the Samsung Galaxy S3. However despite this seemingly increased cut throat competition in technological advancement, the iphone product from Apple Inc still commands the market share. This is because apart from having the features required, there is the idea of ‘the next big thing’ that the company always has to come up with in the world of innovation when launching its products. The iphone enjoys relatively a bigger market share than the other brands. The closest competitor, Samsung galaxy S3, still doesn’t enjoy half the market share that iphone currently can boast of. Despite these brands having to face the same market conditions, the iphone sails smoothly where other brands find difficulty to penetrate and create a market niche of their own. Globally the modes of transportation are changing at a rapid rate with Africa having the fastest rate in terms of communication and technological advancement. This can be seen as a market to boost the revenues of the companies. With increased adoption of more technically advanced devises in Africa than anywhere else, this poses a great opportunity to grow the Apple market niche in this region. The consumer buying habits are that people go for what is latest in the marked or the technology industry has to offer. With this type of consumer buying habits, again it is another reason to fully tap into the market by Apple Inc to increase its margin. These indicators, coupled with the shopping patterns that have been studied, clearly show that the battle for supremacy and market penetration is in the continent having nearly exhausted the markets in the developed worlds. As discussed earlier the distribution channels for this product have to be at the national chain stores level. However this method can only be suitable in countries that have a clear and concise policy as regards to importation and distribution of imported goods (Lowe & Doole, 1997). This is a policy that cuts across for the products. For example, in some Asian countries, there are some applications that are not allowed to be used. Such policies really affect the sales revenue generated from such a product with some key limiting factor. For a product to effectively realise its full market effect and potential, it has to be promoted in the market trough aggressive advertising and promotion measures. Apple has in the recent past used internet marketing to promote its iphone brand in the global market. This is aided by the favourable global market trends. Customers want to have devises with much more capabilities and functionalities at a pocket friendly price (Singla, 2010). This is what consumers of a product want. To achieve this great strides have to be taken to improve the innovation to meet customer demands. In doing this, the business not only creates a brand for itself but also attracts and retains customers. The precise media used is the internet as it is faster in passing and sharing information. Through the internet, information can also be downloaded and kept for future referencing. This makes this source very suitable to promote and advertise iphone as a brand. However with the use of satellite radio and television, it also proves an effective method of ensuring information about a product reaches the targeted customers. Since not all can be able to access the internet, then the audio and visual communication through radio and television come in handy to assist in passing the information to the intended target. Sometimes, creation of awareness is not sufficient enough to warrant massive market penetration. It has to be blended with appropriate product promotion strategy (Lowe &Doole, 2005). For any marketing plan to prove successful it has to contain the P’s of marketing namely; product, price, promotion and place. The best global plan to promote the iphone is to keenly look into these four aspects with regards to different markets globally. The manufacturer has to select a pricing model that is profitable and at the same time friendly to the customers. The mindset of majority of the consumers is that the higher the price of a product, the higher the quality and utility derived from the use of the product. Therefore this has to be maintained with continuous improvements being made. The product itself has to meet the standards set or required by the industry players. Another important aspect in the global marketing plan is the price differentiation of the product according to selected market segments. This concept enables different global markets or segments to be able to buy a similar product at different prices in the respective market segments. This is a way of ensuring that as much as the brand is widening in its product delivery, revenues are maximised and customers are globally satisfied by the product. This can also extend into customer delivery services to create an edge over other competitors and ensuring Apple Inc is able to retain and control it market share as a leader. Marketing plan The target markets for the iphone are the primary consumers which comprises of the middle class income earners. This group makes the majority of income generating group in an economy and are thus after closing in on very important deals (Dahringer, 2006). This class don’t want to miss any opportunity because they lacked a means of accessing reliable information to guide them in decision making. They are on the go and want to be the first to know about any news that may be affecting them and how to react to such information. This class of iphone customers also want to get in touch with their friends and families. The iphone therefore offers this target market a precise devise that enables them accomplish so much while on the go. The other class of the iphone are the secondary consumers. This comprise of the young who are after a totally different utility satisfaction from the product. Majorly, they are after the trend and techno-savvy attributes that the iphone has. For example, this market group are after what devise will enable them have entertainment while still be able connect and share with friends and families. The iphone is a meticulous devise that cuts across the different social set ups and brings satisfaction to the end users. The significance attached to the iphone by the customers is so high that it forms a part of the daily lives of the users and can’t do without. Apple Inc has however not achieved this much acclaimed success by its own precincts but rather by collaboration with other distinctive market player. For example, Apple Inc partners with industry players like IBM and Motorola to manufacture its processors. It also collaborates with large cell phone service providers to act as the national chain stores for its iphone product and other brands. These service providers play a crucial role in product development as they are the service points where customer feedback concerning needed improvements on the product can be collected PESTEL ANALYSIS Political factor This is an important aspect of analysing the different market segments for the iphone. Political factors influence the ease or difficulty of penetration of a market segment by the company (Dahringer, 2006). Apple Inc has to deeply understand the fundamental laws that are likely to affect its product either positively or negatively. If the laws are welcoming and embrace new technology such as the iphone then it creates an opportunity for the business. However if the laws are bureaucratic and are strict to foreign technology, then it poses a threat to the company as it will not manage to penetrate the market and establish new market frontiers to have a competitive advantage over the competing rivals. Apple Inc needs to understand the taxation policy adopted by a country as regards to taxation of foreign companies or goods. Being able to understand this crucial factor can enable the company to achieve greater market share. Economical factor This refers to the dynamics that govern a country with regards to the monetary and fiscal policies that a country adopts. The choice of which policies to govern the economic dynamics goes to a greater extent to determine the Gross National Income of a country and also the income per capita of the citizens (Gilligan & Hird, 2001). Apple Inc should analyse this factor in the countries in which it wants to sell its product. This is because it greatly affects the income for expenditure by families. Where the income per capita is high, then there is a high purchasing power. This means that the company can be able to price the product favourably in this particular segment. This improves sales revenue for the company. On the other hand if the income per capita is low, it means that households would lack the extra coin to be able to buy the company’s product. This results in a not so friendly market for Apple Inc to invest in. Therefore, this factor is crucial in selecting the market segments for reaching out to customers. Social-cultural factor This factor is crucial as it affects directly the end user of the iphone. Depending on the social set up of a given market segment, there are those that quickly embrace the new technology and there are those market segment that takes time to finally accept. This factor however, greatly depends on the literacy levels of the target society. Given that the less skilled can also have the product; there are other facilities that will end up underutilized. This however should not be a deterrent factor to close in on the illiterate as they can use an iphone to improve their literacy levels. Technological factor Technology plays a very vital role in ensuring market segmentation and penetration (Samli, 1995). With the advancement in technology, it is possible to conduct market surveys and identify the new market niche for Apple Inc. this can be done remotely from the servers for actively engaged Iphones globally. This is probable as the less active area being earmarked as new frontiers to expand their market coverage. As technology advances day by day, there are better ways that will come up to improve on efficiency and better market study. Marketing strategies Product This is one of the four P’s that a successful marketing strategy has to employ in order to be successive. It can be a product or a service which is demanded by the market. Apple Inc has indeed worked meticulously to come up with a product that is both endearing and of high quality to the market (Carlson, 2012). The company has created a brand in the industry that it always has some new innovation to add into the product line. Among other substantial things Apple Inc has managed to offer its clientele is a one year warranty that in case of any short comings in the performance of the iphone, then a customer can have it replaced at no or minimal cost. This service is able to attract and close in customers which increase the tendency of a buyer buying more different products from the store. Apple Inc has also managed to identify their product as trendy in the market they serve. The iphone despite all these features and capabilities is very much portable and stylish. This makes it a tool of choice amongst many as compared to the other brands. Pricing With the different versions with which Apple Inc has brought into the market, it creates a diverse pool of products to select from depending on individual needs and purchasing power (Onkvisit & 2009). The prices vary with the different versions available whereby the most recent version commands a higher price than the previous versions. Considering the inbuilt capabilities an iphone has including high voice clarity, an expanded memory space and improved picture quality, it can be concluded that the consideration paid is reasonable. The price ranges from $300 to $400 which is affordable. Having such an affordable pricing strategy, it is evident that customers really get value for their money and as a result the company can protect its share from being penetrated adversely by the competitors. Distribution In the recent past Apple Inc has shifted from using the small scale retailers to distribute its products to using the bigger national distribution channels. The company has also enrolled on an aggressive global marketing strategy of opening its own retail stores in other countries (Carlson, 2012). Currently Apple Inc has over 280 retail stores it owns in more than 10 countries across the globe. Being a technology company, Apple Inc has also embraced the internet as a channel of distribution where potential customers get to place orders upfront and they are shipped to the respective countries. This strategy has led to an increase in the annual revenues generated from overseas sales. This kind of global marketing proves a formidable advantage point for Apple to sustain itself as a market leader in the industry. Marketing This entails capturing the potential consumers’ imagination with the products capabilities to arouse their need for the product (Porter, 1980). In order to succeed, Apple Inc has to carry out extensive product awareness in the form of product promotion and advertisement to attract new buyers. Through this the company will be able to make its product lines known and purchased widely. Another marketing strategy that can be useful in for the company is the use of price cuts to encourage consumers purchase the product. Price cuts can take the form of trade discounts whereby clients who purchase more than a certain minimum are given good discounts. The channels adopted for relaying the message to the different target groups will depend on the suitability and coverage of the medium of relaying the awareness. It is no doubt that the more aggressive a campaign is the more the awareness and potential buyers are created. Conclusion To make a conclusion of this topic various marketing strategy mix can be employed by a company, in this case Apple Inc, to ensure retention of its market control. This report has looked into the possible opportunities that Apple has in the global market that if properly identified and consequently utilised properly can harness a lot of revenue and maintain the company as a leader in the global iphone market. This report has also identified the weaknesses that Apple Inc face that if not monitored properly would lead to a loss in their market niche. This is because Apple Inc has very aggressive competitors that also want a market share and destabilise the dominance currently enjoyed by Apple Inc globally. In conclusion of this report therefore, Apple Inc has to understand its strengths in the market and work to improve on them. Likewise the company should also identify the weaknesses and threats that are in the market, and react accordingly so as to retain the share it enjoys. Therefore in one way or another Apple Inc has to assume a proactive role as a market leader in the iphone industry. Through the use of such strategies as the online marketing, the company is bound to gain a competitive advantage over its competitors. The degree of technology embraced by the company is exceptional and it can continuously be improved and differentiated with the objective of going an extra mile in gaining a better market share. Continuous marketing can help the company maintain consumer loyalty globally. It is worth noting that the use of e-marketing is inevitable in the world today since globalism is inevitable in the contemporary business world. References Carlson, J. (2012). The iPad Pocket Guide (3rd Edition): Generous Knowledge, E-Pocket Sized. Berkeley. Peach pit Press Dahringer .L. (2006). 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