Analysis of the Marketing Strategy of Apple Inc: 1997 2011 - Essay Example

? Analysis of the Marketing Strategy of Apple Inc: 1997 – Research Proposal Background of Study The year 2009 was marked by of one of America and the world's worst financial crises, which became known as the Credit Crunch or the Global Financial Crises. Most businesses reported losses. However, in that same year, Apple Inc, one of the world's largest technology companies with its headquarters in Silicon Valley reported profits of $1.67 billion (Schneiders, 2011 p10). Amongst the competitors of Apple who reported losses was Microsoft which reported a very low profit margin (Bold & Davidson, 2012). Mainardi (2012) states that “Apple Inc is the world's largest company in market capitalisation, producing iPhones, iPods and iPads along with Macintosh computers” (pvii). Apple is known for its involvement in the Smartphone revolution which brings the internet onto portable devices like mobile phones and tablets. This is based on convenience and consumer demands and expectations. Apple gains its competitive strength from its uniqueness in producing the best-in-class products (Goldfayn, 2012 p231). This includes distinctive applications and software which meets consumers' needs and expectations. Apple leads the industry with its ability to control the markets through innovations. Aaker (2007) identifies that Apple always produces items that consumers are willing to by. This is because they always ensure that they maintain a proactive emergent business strategy which takes into account, everything that consumers want and deliver it with a high degree of flexibility (Aaker, 2007). Another school of thought believes that what differentiates Apple from other technology and IT oriented firms is that they are focused more on the design and redesign of their products but not on profits (Chazelle, 2006 p14). This is because Apple believes that if consumers' needs and expectations are considered and integrated into the production system, they will willingly buy the business' product. Due to that, the management invested more in research and development of their products rather than promoting profits. Without innovation, most businesses cannot find better ways of commercialising their offerings, this would always lead to the demise of the company (Aaker, 2007). This means that innovation is key to the survival of businesses. This is one of the main keys that enable a company to thrive in competitive environments. However, there is a pressing question on how a company like Apple would always get it right whilst other companies get it wrong. What is the marketing systems and methods that can be used to describe the success of Apple? One of the fundamental keys for success is market segmentation, which involves the need to examine and review the different units of the society who purchase a firm's products (Weinstein, 2010). Through segmentation, a business can tell what motivates a buyer ahead of another. This enables a business to undertake scenario planning and conclude on what consumers might want next. Of course this would not be successful if the actual needs of consumers are not monitored and noted down. Hence, the iPod has been considered to be one of the greatest products by scientists (Chazelle, 2006). There are many things that come together to give consumers the best. This enables Apple to be classified as one of the innovation driven companies in the world. Thus, this makes Apple one of the leading firms whose emergent strategies can be replicated by other companies. Research also shows that the management core of Apple are involved directly in the innovation process (McGray, 2009). This is done through brainstorming and examining different options and systems. Through this, they formulate designs and strategies that catch customers' eyes and keep them interested in Apple products. Thus, Apple's success can be credited to the demands of consumers, which goes into the research and development who turn it into the production system with in a short and timely fashion. This can be seen as one of the secrets of their success. However, there are numerous detailed discussions of Apple's operations and improvements over the years. It would therefore be appropriate to examine this in detail. Steve Jobs & the Apple Story No reasonable discussions can be conducted into Apple's success without the mention of their charismatic and popular leader, Steve Jobs. This comes with a lot of background and stories. However, there most business experts both in academia and in practice view Jobs as an exceptional manager and CEO to look up to. Steve Jobs founded Apple with a friend from very modest beginnings. When Apple grew, they involved a manager from Pepsi who had a marketing background and a track record of being successful in marketing (Schein, 2010 p230). However, due to some differences in the focus of the business, a power struggle ensued in Apple. Whereas Jobs wanted to focus on consumer needs, continuous improvement and product design, his opponents focused on profits and marketing (Elliot, 2012 p133). On hindsight, it is apparent that the marketing based on profit targets stood against innovation and meeting consumer needs. In the words of Steve Jobs, “.... old models were forced down the throat of consumers which gave room for competitors to enter and capture the markets with better products” (O'Grady, 2008 p29). However, the Board of Directors dismissed Jobs who went on to start an animation company. In 1997, Jobs returned to Apple as the interim CEO after it was apparent that Apple was nearing a demise (InfoWorld, 1997 p19). Once readmitted into Apple, Jobs turned around the company through innovation and quick learning from consumers' needs. In the first seven years, Jobs restructured the company and made it more competitive than its competitors. In 2005, he announced that Apple was set to take the world by storm (Estelmi, 2011). This prediction came to life in 2008 when Apple became the largest company in the world on the basis of market capitalisation. Jobs opened a range of products that provided consumers' needs as they wished (Schein, 2010 p230). This included the iTouch Phone, iPod for music and iChat which supported teleconferencing. Jobs became phenomenal and wrestled a significant market share from his competitors, Microsoft and Blackberry (Estelami, 2011). Marketing & Strategy at Apple Apple is reputed for running a very competitive and innovative marketing strategy. Schneiders (2011) identifies that instead of traditional marketing, Apple runs a 'cult marketing' system. This means that they use a strong interconnetion of strategies and systems that enables their customers to continue getting interested in other products they have a well as new and better products they release onto the markets. In order to capture the markets, Lamb indicates that Apple creates a permanent taste in consumers by undertaking marketing drives and promotions that blends different approaches and systems of promotion (2011). Goldfayn (2012) identifies that Apple produces the hardware with the best functionalities. This is because most companies segregate the development of their hardware from their software. However, Apple produces the best in both. Due to this, there is a double satisfaction and double improvement when the firm improves its offering. Promotion is done through non-traditional systems and methods. The company undertakes events and other activities and announces their new technology through it. Aside this, Apple uses different systems like bloggers and the big media to create 'consumer evangelists' (Goldfyn, 2012 p234). These consumer evangelists use mass communication systems like Twitter, Facebook and Blog sites to promote Apple products. This was an unprecedented system, however, Apple has employed it successfully to attain real results. Industry Dynamics Mobile broadband is predicted to become the future of the information technology industry (Estelami, 2011). In 2011, 6 billion mobile telephony connections were done (Bold & Davidson, 2012). The total worth of the industry is $1.3 trillion. There are four times more people than those who use landline connections. The new trends in 2012 include faster connections and high speed access to information (Bold & Davidson, 2012). Since this market is new and developing, Smartphones and Tablets provide an opportunity to improve market share and revenue for businesses. According to the McKinsey Quarterly, the main issues that determine success include persuasion, design, build, operation, and innovation of companies that produce these Smartphone and Tablets (French & McGill, 2011). Motivation for this Research Since Apple is successful even in the worst times for other businesses, it is apparent that it is the business for the future. Due to this, it is worthwhile to study the trends and activities responsible for Apple's successes. This will enable the researcher to add up to knowledge in relation to new idea and concepts. The research is in partial fulfilment of the researcher's Masters in Business Administration studies. As such, this research will enable the writer to apply important skills and knowledge acquired in the taught course to a significant real life problem which will culminate in a model for doing business. Research Aim In order to study the company, the main aim of the research is to “examine the marketing strategy and related systems that are responsible for the success of Apple since 1997”. The research will examine how some core components of the success story of Apple and analyze them. In doing this, the research will assess issues like innovation, leadership and strategy that were utilized in the Steve Jobs era of Apple which spans over the past 15 years. In attaining this end, the following objectives will be explored: 1. An examination of the fundamental changes undertaken by Steve Jobs between 1997 when he returned and 2005. 2. An assessment of the marketing systems and corporate strategy that are responsible for Apple's successes after 2005. 3. A competitor analysis of Apple in order to justify Apple's competitive strengths in the past decade and 4. The future implications of the existing strategy of Apple. In order to operationalize the research, the main hypothesis that would be examined in the study is “the changes undertaken by Steve Jobs were based on strategies and systems that were emergent rather than rigid”. Research Methodology The research will be based on an attempt to analyse the strategies that were actually used by Apple. Since Apple is a very centralized and global network, it would be very difficult to get direct information from the current crop of managers. Also, since Steve Jobs, the main man in the centre of the success story has passed on, it would not be possible to get an interview from him. However, Steve Jobs' memory is very well preserved. He granted a lot of interviews to media houses and was interviewed extensively by writers and other media personality. Due to this, it would be better to focus on the secondary sources that were available. For the sake of convenience, the research will be segregated to four different phases and each one will correspond with the different objectives of the study. Research Approach The research approach would be deductive in nature. Deductive research involves an attempt by a researcher to test a series of variables against a set of situations or circumstances to arrive at a conclusion on the matter (Kothari, 2005, p44). This means that such a system is an interpretative approach based on the testing of some information against some standards in order to derive a conclusion. In deductive research, there is the dependent variable and the independent variable (Samuelson, 2010 p21). The independent variable is the fundamental variable on which the research is based. It is held constant and does not change throughout the research. The dependent variable is the variable that is manipulated, hence, fluctuates during the research and is subject to changes as the study goes on. In this research, the independent variable is the systems and approaches used by Apple in the period under review. This is the activities used by Apple to attain its results in the period at hand. The various activities will be acquired though historical information and hence, will be constant. The dependent variable would be the various concepts and ideas that various ideas and concepts that best describes the route used by Apple. This will involve a variety of approaches and systems used in dominant theories and model which can be used to explain a given activity or course of action used by Apple. Figure1:Diagram of Research Process Data Collection & Analysis In this research, data will be collected from different secondary sources. This includes journals, books, interview videos and other sources that would be used to explain Apple's position and systems. This will give us information about how things were done and how operations went on. Phase 1 The fundamental changes undertaken by Jobs after 1997 would be done though inferences from the interviews and discussions conducted in the past about the changes he put in place when he returned to Apple. What were his conditions and which changes did him make. For theoretical analysis purposes, we will analyse the concept of Change Management. This Change Management would be done though the examination of theories that are classical and define different system and approaches. With that done, the most fitting change management concept will be used to theorize the idea of how the changes went from an industrial point of view. Phase 2 The dominant corporate strategy that was instituted after the take over will be analysed. After unfreezing the old system how did Jobs refreeze the organisation. That would be what this section would address. The dominant concept of corporate strategy, particularly the concepts used by Johnson Scholes and Whittington as well as others would be investigated in relation to data on how Apple proceeded with the new era. Also, the marketing strategies used and the emergent strategy which influenced the progression of Apple on the markets would be assessed. This will involve how they set structures that kept them liquid for all the years that they grew in the period under review. This will involve the use of models like the Boston Consulting Group model and the McKinsey framework to assess the different products they had and how they managed them. Phase 3 At this level, there will be an exegesis on the competitive tools used by Apple to capture market share. It will involve undertaking competitor analysis and comparisons to two major competitors: Microsoft and another company. There will be a SWOT analysis that would be followed by an evaluation of the different PESTEL analysis in 1997 and in 2005 to establish important changes. Afterwards, the changes in results and performance between the two competitors will be analysed and the gaps will be explained in-depth. Phase 4 With trends after Steve Jobs and what is going on now, we will postulate on how well Apple will do in the future. This will involve the extrapolation of variables in relation to the current vision held by the management .There would be an evaluation of the current mission, vision and strategic plan. This would give clues about how they want to see the company progress. The results would be theorized and the findings will be used to explain the future trends and possibilities. Result Interpretation In theorization, the fundamental position of each of the discussions will be whether Apple used a rigid or flexible methodology. The concepts used will be assessed to identify which kind of results were attained. The difference would be to identify whether the company used an emergent or strict strategic framwork in each situation. At every phase, if an emergent strategy was used, what Research Validity and Reliability. Validity refers to whether a research scientifically answers the research questions or not. Yes, the presence of a lot of Steve Job's interviews makes it quite scientific to summarize his statements and ideas with ease. The drawback of this research approach is that it is susceptible to some degree of subjectivity. To avoid this, the researcher will rely on the directions of the supervisor to check biases. This will ensure that the right systems of interpretation and conclusions are draw. Reliability refers to the accuracy and credibility of data used. In this research, only credible sources will be used. Peer review journals, independently published books and other interviews to independent media houses and institutions would be used. The tone will be formal and different sourcess will be consulted in each situation to ensure that data is cross checked and evaluated appropriately. Time Scale The research will be conducted in a space of 8 weeks. Each week will involve separate activities. Some may overlap. Activity/Week 1 2 3 4 5 6 7 8 Proposal Completion/ Approval Preliminary Research Design Complete Introductory Chapter Undertake Definitive Literature Review Begin Data Collection Compile Data Approval 1 Complete Interpretation Approval 2 Present Draft Final Approval/ Completion References Aaker, D. (2007) “Innovation: Brand It or Lose It” California Management Review Vol 50 (1) pp8 – 24 Bold, W. & Davidson, W. (2012) Mobile Broadband: Redefining Intent Access Paris: INSEAD Business School. Chazelle, B. (2006) “Could Your iPod be Holding the Greatest Mystery in Modern Science?” Math Horizon Vol 13 No4 pp14 – 15; pp30 – 31 Elliot, J. (2012) Leading Apple with Steve Jobs: Management Lessons from a Controversial Genius Hoboken, NJ: John Wiley & Sons. Estelami, H. (2011) Marketing Turnarounds Indianapolis: Dog Ear Publishing. French, T., LaBarge, L. & MaGill, P. (2011) “We're All Marketer Now” McKinsey Quarterly 3(2) pp291 – 307 Goldfayn, A. L. (2012) Evangelist Marketing: What Apple, Amazon & Netflix Understood Dallas: BanBella Press. InfoWorld (1997) “Apple Names Steve Jobs as Interim Chief Executive” InfoWorld New York: InfoWorld Publishing. Kothari, C. R. (2005) Research Methodology Delhi: New Age Publishing. Lamb, P. W. (2011) Marketing Mason, OH: Cengage Mainardi, C. (2012) The Global Information Technology Report – 2012 Paris: INSEAD Business School. McCray, N. P. (2009) “From Lab to iPod: A Story of Discovery & Environment in the Post-Cold War Era” Technology & Culture Vol 50 (1) pp58 – 81 O'Grady, J. D. (2008) Apple Inc Santa Barbara, CA: ABC – CLIO Samuelson, D. (2010) Research in Social Sciences Mason, OH: Cengage Schein, E. H. (2010) Organizational Culture & Leadership Hoboken, NJ: John Wiley & Sons. Schneiders, S. (2011) Apple's Secret of Success – Traditional Marketing V Cult Marketing Berlin: Diplomatica Verlag. Weinstein, A. (2010) Handbook of Market Segmentation London: Routledge Read More