Apple Inc as a Frontrunner in Revolutionizing the Digital Marketplace - Assignment Example

Apple Inc. College: Apple Inc. Apple Inc is an organization that has strived to satisfy the world’s demand for information technology infrastructure since the time it was founded back in 1977. The company strategy has been to bring the best user experience to its customer through innovative products and services. Apple Inc provides hardware, software, services and internet services in the industry to satisfy their esteemed customer and to develop an effective IT front which is necessary in the development of the world economy. In the contemporary business era, the technology field has become competitive as more innovators invest into the market in an attempt to benefit from the growing demand of technology products. Competition has become one of the strategic challenges that push Apple to reinvent the wheel to survive in the business market. While the company continues to increase its market share, it is clear that it approaches are expensive and it is questionable whether the company will remain a frontrunner in revolutionizing the digital world. From a close assessment, the company needs to focus on its sustenance in future. To do this, there is need to focus price competition and technology competitiveness. One great challenge that is a potential threat to the survival of Apple Inc in the future is the competition by other innovation companies such as Samsung and Nokia. Although the company has created a unique profile by patenting most of its applications, Samsung has come around this challenge by using the Android Platform, which is the world’s favourite software platform. The mobile and Tablet users today prefer the Android platform over the iOS, which Apple Inc uses. The Android platform allows flexibility of access open source application, which makes it more integrative than any other operating system within the market. This is the major reason why the Apple mobile market is constrained as people shift their tastes towards this new software platform. This trend promises that Apple Inc is bound to experience a severe challenge if it does not take appropriate measures to counter ever rising competition in the market (Mallin & Finkle, 2011). Therefore, competition is a real threat to Apple’s future as the main player in the digital world. While the company has continued to increase its market share in the last two years, its profit share is still very low compared to Samsung, its main competitor. To understand the value of Apple’s competitive strategy, it is crucial to compare the company market share and the price the company has to pay for it. Notably, the company’s products fetch optimal profits at the product launch when the company sells its products at much higher profits. For instance, the company iPhone 6 Plus fetched a 69% profit at its launch. However, one of its recent strategies to compete with other smartphone companies has been to lower its prices between September and the Christmas period. Although the company fetches most of its profits during this offer period, it is clear that the mobile company sells its products at lower profit margins. For instance, the iPhone 6 profit margin falls from 69% to 58% during the offer period (Mallin & Finkle, 2015). While this has increased its market share, it is clear that mobile users are not taking advantage of this period to buy apple products at a cheaper price. Therefore, Apple has a price to pay for its competition strategies. Evidently, Apple is experiencing the worst completion both in terms of market share as well as in terms of profits. In 2014, Apples sales increased by 23% while Samsung’s sale increased by 46%, which about twice that of Apple. Over time, Samsung’s profit share is slowly closing in and is almost catching up with that of Apple. In the past year, the two companies’ profits only differed by 3%, making their revenues relatively equal. The possible reason why Samsung is winning the Great War is because the company has focussed on innovation to manufacture better products while targeting the middle income class. For instance, Samsung’s S5 is a fair match for iPhone 6 models in terms of quality and flexibility. However, in terms of product price, Samsung S5 is much cheaper and this explains why the model has penetrated the market much more than iPhone 6 (Mallin & Finkle, 2015). On this ground, it is clear that price competition by smartphone companies has become a big blow for Apple and has posed a great threat for the company’s survival in the digital world. One of the ways to face the strategic challenges that have come up in its market is to find an innovative way to develop iOS to compete with the Android software that is gaining popularity today. While the iOS allows users to download software for the mobile, it is clear that the platform is not as flexible as that provided by Android. Therefore, reinventing the wheel would involve developing the iOS to be compatible with the same software that the Android users have access to. This will be one way to retain their customers and to win even more. Although the company has a unique target market, it is clear that limiting the target market would be a disadvantage for the company. The Android smart phones today have taken a 48% share, while the iPhone lags behind having a 28% market share (Abu, 2014). In the recent past, Nokia has released its Nokia X models that have an Android market access, which now promises new competition for Apple Inc. therefore, the company needs to be more vigilant in innovating new strategies to compete with the Android Smart phones if they have to survive in the market. Another strategic challenge that the company experiences today and is a great risk for its future survival is staffing. Staffing is the procedure that company uses to get the right people to do the right work within the organization. The problem of failing innovation in Apple Inc in their recent release of iPhone 4S is a manifestation of shortage of innovative personnel within the organization. Analysts have criticized the new release terming it as redundant smart phone that looks much similar to the former release. To remain innovative in the technologically evolving business market, it is crucial to get the right staffs for the company to develop. The management in this company has the mandate to staff the company with innovative minds who can shape the company in accordance with the current market demands. One way of doing this would be to seek employees who have wide knowledge in software development. Software development skills are crucial for the company if it has to compete with the evolving Smartphone technology. Also, the company has to identify employees with abilities to work in diverse environments. This will help the company to expand its market to other regions so as to increase its market share. Marketing skills are crucial in the company as the company strategizes to reach out for more customers within the business market (Cravens, Piercy & Baldauf, 2009). To improve the knowledge of its workers, the company needs to conduct training to its workers to ensure that they remain abreast in terms of the changing technology. In conclusion, Apple Inc.’s survival in future depends on its ability to use its strengths to offset the looming challenges that are threatening its future. First, the company must focus on the competition that the Android smartphones has posed within the market. Recruiting employees who have advanced software knowledge, strong marketing skills and ability to relate with diverse markets will push the company a step ahead. The success of the company will depend on the management’s ability to focus on the strategic challenges that threaten the future of this company. References Abu, S. (2014). Competition and Innovation in Telecom Sector: Empirical Evidence from OECD Countries. Informatica Economica, 18(1), 27-39. doi:10.12948/issn14531305/18.1.2014.03 Cravens, D. W., Piercy, N. F., & Baldauf, A. (2009). Management framework guiding strategic thinking in rapidly changing markets. Journal Of Marketing Management, 25(1/2), 31-49. Larkin, I., Pierce, L., & Gino, F. (2012). The psychological costs of pay-for-performance: Implications for the strategic compensation of employees. Strategic Management Journal, 33(10), 1194-1214. doi:10.1002/smj.1974 Mallin, M. L., & Finkle, T. A. (2015). APPLE INC.: PRODUCT PORTFOLIO ANALYSIS. Journal Of The International Academy For Case Studies, 17(7), 63-74. Read More