Technological Products and Services - Apple Inc - Essay Example

Apple Inc. Institution Affiliation Date Abstract Apple is a leading electronic and information technology company in the world. It is the most successful company in the industry offering the best high-quality information technology products. Despite its worldwide success, Apple does not operate in a pure monopoly. It offers pricey products for the middle and high-income people who comprise of a smaller market share in the developing countries. It does not have enough distribution channels to reach its target market. Apple considers technology necessary in its production, and it's the driving force of the company that enables it to stand out from the rest we look at the internal factors such as its structure and culture and how they influence its activities. Analysis of the external factors is also important as they affect the operations of the company indirectly. SWOT analysis is used to identify the strengths, weaknesses, opportunities and threats that the company has. After evaluation and analysis, problems are identified and recommendations made on the strategies that can be used to solve the problems. TABLE OF CONTENTS Introduction Background research………………………………………………………………4 Mission …………………………………………………………………………….5 Vision………………………………………………………………………...........5 Research question…………………………………………………………………..5 Research methodology……………………………………………………………..6 Products …………………………………………………………………………....6 Organization culture………………………………………………………………..8 Organization structure……………………………………………………………...8 Market coverage…………………………………………………………………..10 Market strategies…………………………………………………………………..10 SWOT Analysis……………………………………………………………………12 External environment analysis…………………………………………………......14 Recommendation…………………………………………………………………...17 Conclusion…………………………………………………………………………..17 Introduction Background research Apple in is a worldwide company that deals with technology, it produces, designs, and sells technological electronics, computer software, hardware and offers online services. It was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April first, 1976 and has its headquarters in the California United States of America. It is the world's largest information company by revenue income and by total assets. It is also the second largest mobile phone manufacturer with the IPhone being its major mobile phone brand worldwide. Its main aim was to develop and sell personal computers to the world. The company was incorporated in on 3rd January 1977 and was later renamed Apple Inc. in January 2007, due to its entry into the consumer electronics like smartphones. (O'Grady and Jason 2009) By the time of incorporation, Wayne has sold his shares of the company to Wozniak and Jobs for $800 who became the principal owners. The company became the largest publicly traded organization in the world beating other big companies like Microsoft and Google. It became the first company in the United States to be valued at over 800 billion dollars which were attributed to its major sales of products, acquisition of smaller firms and the diversification of products from computer products only to more consumer products such as mobile phones and services. Wozniak designed and personally built the first set of computers which consisted of a motherboard, central processing unit and a random access memory only combined primary video and audio capabilities. Compared to today's modern computers, this is less advanced and incomplete but by then they were considered the complete equipment set. The computer went on the market for sale in July 1996 and was highly price at around 600$.Wozniak later developed Apple 11 which was introduced to the market in April 1977, thus being the first computer development by Apple. Improvements were made with technology being incorporated in the development, more, better and faster computers were produced starting with the Macintosh.By the early 80's Apple already had employed computer designers and had a production line. (Inzmayer, 2004) Mission Apple mission statement is to offer the best computing experience to the people around the world through its hardware, software and online services. It focuses on providing the best technologies available through their products and makes a significant dominance in the market. Vision To make great products using the best technology available, to own and control the technologies applied in the making of their products. Focusing on few projects that make an impact on the people and the world. To promote collaboration across all age groups to innovate in all ways possible and have the honesty to admit where we go wrong and the courage to change according to the needs. Research question To evaluate Apple Inc. and the challenges, it is facing in its operations of offering technological products and services. Specific narrow consumer base for products Hard entry into developing country markets Limited channels for distributing products Incorporation of technology in the industry Continuous improved of products to match market products Stiff competition in the technology industry Research method The internet Wikipedia and Google, written journals on the rise of Apple Corporation, and books to find data about the history of apple, products and services, market share, supply chain, organization structure and the various internal and external factors that affect the company's operations. Products Apple has designed and developed various technological electronic accessories that are widely used around the word. Macintosh computers Apple sells different type of Mac computers such as MacBook, MacBook Air, MacBook Pro, Mac mini, and IMac and Mac Pro. It also provides computer accessories like wireless mouse and keyboards. IPhone Steve Jobs introduced the first iPhone in 2007and it was later released in June the same year. It had 4 GB and 8 GB memory capacity which then were enhanced to 16 GB. The iPhone used IOS. Various improvements have been done with the current additions to the market being the iPhone 6, iPhone 6plus, iPhone 6s and iPhone 6s plus. Therefore, this was introduced with the current 3D technology and have improvements such as screen sizes from 4 to 6 inch, increased camera pixels to 5 megapixels for front and 13 megapixels for back camera. The memory capacity has significantly increased to between 32 and 132 GB. IPod IPod is a digital music player that allows users to store and listen to music. In October 2001, the very first IPod was introduced and since then various improvements have been made and other upgraded versions of the gadget released to the market. Currently, Apple has three types of iPod in the market namely the iPod shuffle, iPod Namo, and iPod touch which is available in up to 128 GB memory capacity models. IPad Apple introduced iPad in January 2010 which is a combination of a smartphone and computer capabilities. It can process books, music videos, photos, word documents-books, and high-definition video games. This has also undergone many updates through time with the latest model being the iPad Pro released in September 2015. Apple watches In September 2014 Cook launched the Apple smart watch which was released on 24th April 2015.It is s high-end watch which only works with an iPhone 5 or later models. Apple TV Apple produced a TV that uses Wi-Fi or cabled network and streams content from iTunes store. At first, they TV had a 40 GB storage capacity which was later upgraded to 160 GB in the new TVs.in 2005 Apple released the latest model which runs on the latest operating system and has the capability to store and play games and is touch enabled. Software The company operating system to run on Mac computers, Xsan area network for file storage and logic pro a music software. It also provides online services such as I cloud which offers data storage for emails, photos, and documents. Apple also sells solar energy which it sells to companies that produce solar panels. Organization culture Technology innovation is the culture of Apple. Although it started long ago with products, build with outdated technology it has upgraded all its products incorporating the latest technologies available. The company develops and releases new products after a short while. The products are intended to bring the best technological experience to users while incorporating new capabilities to allow multitasking by users. The organization recycles its products by giving people exchange services where they exchange their outdated products for the new ones at a small cost. Organization structure Apple is a huge company. Therefore, its management is categorized into two; the corporate management and retailer management. The corporate management refresh to the manufacturing sector that designs and develops the product. The retail management deals with the already done product and works towards achieving the required sales, health, customer, and legal targets. It is responsible for functions such as marketing, producer and retailer communication, customer care, human resource management, legal aspects of the company as well as sales of the products and procurement of resources required in the manufacturing process of goods. Steve Jobs is at the top of the hierarchical structure and has five directors who assist in the management and decision-making. From there are departmental heads, who handle the various operational functions of each department. Under them, other employees carry out the duties as communicated from the Department overseers. Communication of objectives, goals, and decision-making is from top to bottom of the hierarchy. Market coverage The company being a multinational corporation sells its products worldwide. However, the market coverage differs with its primary market being the European and American countries. The primary users of its products are countries include; the United States of America, United Kingdom, Germany, Switzerland, Denmark, Italy, China, Japan, Canada, Dutch and the Korean republics. They have a significant market share in the developed and developing countries with people in the high and middle living standards. Expensive products such as the iPhone, Mac computers, iTunes and other Apple soft wares are used in the developed countries. Apple potential target customers are within the 15-45 age bracket, and the iPhone is the most commonly used among its products. Although Apple is worldwide and has a big customer base in the developed and developing countries, there is more effort needed to increase the customer base in many developing countries, especially in Africa. African countries comprise of the majority of people who are in the middle and low living standards. Nevertheless, this has made it difficult for the company to penetrate the African Market with only a small percentage of people who use its products. Some developing countries used outdated technology making it difficult for Apple products to operate with this technology. Marketing strategies Apple has adopted various strategies in its operations to attain success. The most important strategy is the technological advancements. It has made technology its main culture and focused on it in the design and development of all products. Therefore, this has ensured that they produce reliable products which are unique and meet the needs of users. Product mix strategy-The Company has and continues to expand the range of products that it offers. Its products include; iPhone, Mac, iPod, iPad, Apple TV, Apple watch and Softwares. Thus, this has made it acquire a large customer base as people use different products to meet their needs. Diversification enables success in that it does not rely on a single product. If a product does not perform well in the market, the company also looses revenue as the other products and services supplements it. Distribution strategy- It has taken advantage of various distribution channels available. It distributes its products in Apple stores, online app stores, authorized distributors, authorized retailers, telecommunication companies and service providers. It uses direct distribution through stores and online app stores where users can download them or purchase directly. It also uses a wholesaler to retailer to customer distribution channel where products are purchased by wholesalers who pass them to retailers who then deliver to the actual clients. The use of both strategies ensures a broad reach to customer base increasing revenue. Pricing strategy- Apples prices its products highly than most similar products in the market. This marketing mix focuses on how prices reflect the company and its products. The pricing helps maintain a high end of the company and its products (Bach, 2007). Since its products are highly priced than the rest, consumers perceive the company uses the best materials in making the outputs and are of high quality compared similar products from other businesses. The company attracts a smaller market share comprising of the middle and upper-class people but still maintains high profits because of the high pricing. Therefore, this makes its products a trademark for the intermediate and high-class people who become loyal consumers of its products. Brand creation strategy- Through the production of quality items, Apple has made its name a brand in the industry where its products and services are valued and trusted by people. Consequently, this makes them want to buy the products at high prices other than acquiring products from the manufacturers they don't know and are not sure the products are quality. Cheap is expensive. Sales promotion strategy the company offers special offers, coupons, free gifts to attract potential users, add value and promote customer loyalty among the existing customers.it does promotion activities such as making donations to the needy, sponsors some competition prize, games, and challenges. Hence, this also promotes public relations with its clients as they give back to the society creating a good image for the company. An excellent example of a public relation strategy is the sponsoring of computer innovation activities for students in China and donations to the victim of the catastrophic Japan earthquake. Advertising strategies-Apple creates awareness of its products through all available channels ; TV, radio, the internet and through posters and publications. Accordingly, this enables it to reach a broad potential customer base. Acquisitions mergers and partnership strategies- this refers to the purchase, consolidation or partnership of companies with smaller ones to engage in similar activities.Apple bought off small businesses and merged with others such as AT&T and Intel to offer a variety of services. SWOT Analysis We use this fundamental tool to evaluate and analyze the strengths, weaknesses, opportunities and threats of Apple Inc.it is an important tool as it identifies the internal and external factors that affect an organization enabling it to plan and make decisions. Strengths High-quality products that meet the market needs Diversity of products and services Good company image Creative and innovative employees Good relations with customers Leadership in electronics sector and information technology Brand creation leading to customer loyalty Weaknesses Incompatibility of Apple and other products Limited market entry in developing countries Limited distribution channels for products and services Environmental Pollution High pricing is leading to low purchasing power by low-income earners. Threats Hard to maintain leadership in technology industry due to changes Increased competition from companies likes Google and Microsoft Government regulations on entry in international markets Piracy of products especially by technological economies such as China High costs of manufacturing materials needed in production Crimes brought by technology such as cyber-crimes, stalking and spamming Legal restrictions Opportunities Development of more products as technology improves Innovations and technology advancements Economic growth increasing purchasing power of its products External environment Evaluation Economic environment The economy of the world is developing fast especially in countries like China, Japan, and Korea. China is growing fast with high spending by the people and increased national income while the unemployment rate is reducing. Therefore, this is an advantage to Apple as in the developing economies pose potential markets for its products. Technological environment Technology is changing every day with innovations being developed faster. The main culture of Apple is technology, and so it is significantly affected by changes in technology as every time, there is new technology it has to upgrade their previous products to incorporate the technological developments. As a result, this makes Apple have a hard task of maintaining its position of being a leader in technology. Natural environment For most companies, the strategy sourcing cheap input materials is vital to the business success. Apple uses a lot of aluminum and tantalum which are expensive resources in making electronic goods. The cost of acquiring inputs should be as small as possible to maximize revenue from sales. The increase in costs of inputs, therefore, affects Apple negatively reducing profit margins. Demographic environment For this purpose, this refers to the market composition. It is a major factor about Apple since it determines the performance of products. Apple's primary target market comprises of consumers who are between the ages of 15 to 45.A decrease in this population group would affect Apple by reducing the market share and vice versa all factors constant. Different countries have different population growth rate. General increase in population growth rate means an increase in potential consumers of Apple commodities and services and vice versa all factors constant. Socio-cultural environment It refers to the social and cultural values, morals and accepted code of behavior in society. Developing countries significantly adopt the western culture of using electronics as opposed to manual ways. Thus this influences Apple as more young people in this developing countries are embracing iPod, iPhone, iPad and Mac products. On the other hand, some communities discourage the technological changes because they lead to events that go against their moral and cultural values. The introduction of computers, for example, has resulted in the availability of pornographic content to non-adults, social media has brought about laziness attitude to users and cyber-crime issues. Apple should develop ways of regulating this issues. Legal-political environment This is the legal and political factors affecting Apple Company. Apple needs to comply with legal matters such as taxation, pollution laws, and other regulation which if it fails to comply with, it will have problems with the government. Most countries have policies implemented to protect local firms from unfair competition from international companies such as Apple. The regulations may prohibit entry of foreign companies by not allowing licenses to operate or highly taxing them to discourage entry into the domestic market. These legal factors affect Apple in its expansion to international markets. Competitive environment Although it is the largest information technology company, it does not enjoy a pure monopoly. Other products that can perform similar functions are available in the market from other businesses. For example, Apple produces Mac computers that are pricey, expensive to maintain and are incompatible with other devices that don't use Apple technology. The computers face competition from PC computers which use Windows operating system. They are cheaper, easily available, easy to maintain and are compatible with other devices. The Apple iPhone also faces stiff competitions from blackberry and android devices. Although Apple has a bigger market share than its competitors, it has not exploited the developing countries market where Android has larger market share, it should, therefore, price their products lower to utilize the developing countries market. Recommendations Despite Apple being a force to reckon with in the electronic and technology industry. This analysis shows that the company still have challenges. Improvements in products to match with others, limited distribution channels, small market group, limited entry to developing countries markets and hard to maintain the leadership position in the electronic and technological environment. Apple should improve its products to make them compatible with others so as to match others and enable customers to use them together. It should implement new lower prices for its products to increase the market share, especially in developing countries. It should also continue its pursuit of innovation in technology as its culture to enable it to maintain its position. Conclusion Apple is undisputedly the technology powerhouse in the world. Its success can be attributed to its marketing strategies that enable it to be unique in the industry. According to the analysis the company has various challenges and threats which can be solved be implementing proper measures as stated above. It can implement strategies for the forecasted threats and take advantage of the opportunities that it has not utilized References O'Grady, Jason D. Apple Inc. Westport, Conn: Greenwood Press, 2009. Print. Inzmayer, Owen W. Apple Confidential 2.0: The Definitive History of the World's Most Colorful Company. San Francisco, Calif: No Starch Press, 2004. Print. Bach, Benjamin. Implications of Enabling Technologies for Apple Inc: Cybermarketing & Enabling Technologies. München: GRIN Verlag GmbH, 2007. Internet resource. Read More