Market Audit: Apple Inc - Assignment Example

Market Audit: Apple Inc. Affiliation Introduction Marketing Audit is a fundamental marketing planning process part. It gets conducted both at the beginning of the process and also at a series of points while implementing the plan (Michael, 2008). Marketing Audit considers external and internal influences on the market plan; and also the review of the plan itself. In this case, marketing plan uses some tools to evaluate the performance of marketing of Apple Inc. This paper presents a market audit of the Apple Inc. that assess weakness, strengths, threats and opportunities to the company along with its position relative to other members of the industry. The paper also have a critical evaluation of the Apple’s competitive edge and demonstrate how effectiveness using its competitive performance evaluation. Lastly, the paper set a marketing objective for the organization to maximize the brand awareness, growth in sales profitability/volume and increase market share. Apple Inc is a global company that gets based in America and its headquarters, Apple California, gets located in California, United States. Apple got established in 1976 by Steve Wozniak and Steve Jobs and got incorporated in January 1977. Apple designs and sells customers electronics, computer software, and personal computers. The Macintosh personal computer range, iPhone, iPod, and the iPad are some of the best-known products of Apple (Steven, 2002). Some of the software products that get sold by Apple comprise Final Cut Studio that is a video and music production suite, Aperture that is Professional photography software. In addition, Mac Os X operating system, iTunes media browser and Logic Studio that is a music production suite. By May 2012, the company indicated that it has over 300 stores that are located in over ten countries adding the online store. Banton (2011) describes the company as been one of the largest technological firms globally as far as world/s traded companies by market capitalization gets concerned. According to Banton (2011) some of the analysts have even proposed that the Apple Inc. Company has more cash compared to the United States government. Apple (2012) stated that it had over 60, 000 employees that get employed on a permanent basis along with 2800 temporally employees in the world. Regardless of the company success, it has received great critics in the way it treats its contractors and the impacts of the operations of the company in the environment. Among the heavy critics that Apple has received recently is that of Apple supplying workers in China leaving in unhealthy conditions and also get paid meager wages. Apple’s Current Challenges Apple’s greatest challenge was to be able to get the appropriate visionary Chief Executive Officer (Steve Jobs) replacement who died on October 2011; also he was responsible for making the company what it is now. Even though Tim Cook got appointed, the company needs to pursue the strategies of Steve Jobs that propelled the firm to its new heights. It is because, the company gets viewed as being that market leader and innovative based on new products. The other challenge that Apple has is the increase of completion from established competitors such as Google, Microsoft, Dell and HP among others. Additionally, the environmentalists have often accused Apple of not disposing of its old products properly, and a high toxic chemicals level is believed to be present in the Apple’s products. Apple’s Vision and Need for Change The current vision, Banton (2011, P, 90) says, “Apple ignited the revolution of the personal computer with the Apple I during the 1970s and later and reinvented it in the 1980s with Macintosh. The brand commits to giving students, educators, creative professionals and consumers around the world the best personal computing services through its innovative hardware, software and intent offerings”. Looking at the vision, it indicates that the statement needs change because in order for it to be seen adequate. It requires a statement that indicate the objectives of the company in terms of been the leader in the industry that will get achieved by giving reasonable and quality product to potential consumers. Apple’s Current Position Apple can get argued to be in a strong position because the firm has diverse revenue streams and do not solely depend on the computers sales. The company had over 46, 000 employees and had $65, 225 million in 2010 (Yahoo, 2012). In the basis of music downloaded volumes in the world, the company is the market leader; also it is among the top five in market of computer products from rival companies Dell and HP. Surprisingly, as it is indicated by Banton (2011), the slow economic growth in diverse markets during previous five years have not had a great impact on the performance of Apple. It is because the net revenues of the companies have increased throughout the years. Apple’s new Chief Executive Officer, Tim Cook, stated that 250 million devices with Ios software’s like iPhones, iPods and iPads have got sold. In addition, he said that more than one billion Apple Apps are now betting downloaded every month from the Apple App Store and $3 billion has paid out to the developers. The Mac users were reaching 60 million. It implies that the company had a market share of 23% in the personal computer industry as of 2012 and the iPhone growth on the basis of the year to year has been 125%. For Apple to continue getting the same kind of success, the firm need to markets its products aggressively and establishes its presence in nations that not yet established (Suzanne, 2012). Competition Apple Inc. Competes in three diverse fronts that are namely; the handset industry, the music industry, and the computer industry. It relies on its innovative design team in designing and creating the diverse hardware and operating system that differentiate the firm’s products with other products that get offered by its competitors. The apparent quality of the company means that it can charge high prices for its products compared to equal products of other competitors. In the last prior years, Google and Microsoft, who are some of the largest Apple’s competitors, have created products that can get argued to be in response to innovative products of Apple. The Android platform of Google goes developed to compete directly with Ios platform of Apple that runs through every iPhones where the Window 7 got introduced to provide the window user a Mac OS feel. In the basis on computer markets, Dell sells computers compared to Apple simply due to the adoption of low price strategy of Dell Company as Apple charge premium prices for its computing products. External Audit Opportunities Through maximizing its efforts in China, the Apple Company can considerably maximize its consumer number because the China’s population is approximated to be more than one million people. Additionally to China, the company should also target at enhancing its presence in other markets that are potential that Apple is yet to establish its presence. Apple should exploit the design department and effective research that it has to the maximum in order to ensure that the organization continues to create new innovative products that are very attractive for the mass market. The increase of computer viruses number and worms can get argued to be the key opportunity for Apple to maximize its market share in the markets for computers. It is because Mac OS computers cannot get attacked by the viruses. The current efforts by many governments to crack down the illegal; file sharing websites creates the opportunity for Apple’s iTunes to appeal to a wide clientele base. Threats The various illegal file sharing sites create a great threat to the Apple’s iTunes. It is because potential customers may have to pay Apple to be able to download songs and end up getting the songs free of charge from the illegal file sharing sites. The current economic downturn means that the consumer’s spending power gets drastically reduced that in turn means low Apple products sales. Even though the revenues of Apple increase despite the difficult economic times, it is significant that Apple expect situations where consumers prefer other products because they are cheap. The other threat that gets faced by Apple is that the firm faces great completion from its competitors. The firms that Apple competes with are also very well established and create a threat to Apple because they can develop products that directly compete with products of Apple at cheaper costs. Most of the companies in the world of technology have the perception that the products of Apple cannot compact widely with the available software such as Microsoft. In the fact that the Apple company depend on few contracted partners to give Apple’s products shows that the firm gets exposed to risk of product supply that may adversely affect the Apple’s operation once they occur. Social factors The products of Apple have proved to be successful in diverse cultures because its products are dependent on technology advancement something that get embraced in almost every world’s corner. That said, Apple require a thorough consideration of every market as an individual market and create marketing strategies that will be effective in every market. Political factors Now that Apple is present in diverse countries, the firm has to ensure that it follows the specified regulations and rules in the diverse nations in terms of employment rules, tax rates to get paid, business rules, among other aspects. Environmental factors In the basis of environment, Apple (2012) states that the firm thoroughly considers the influence that the products of the company have on the environment, when it is getting used and after getting used. The company argues that less material is now getting used in every product aspects to ensure that the impacts of the firm to the environment gets reduced as low as possible. Technological factors Apple gets greatly considered as one of the most technological innovative firms in the world. The products of the company get seen as the leaders of the market in diverse sectors that the company serves and competitors are always keen to ensure that they have products that can compete with the products of Apple. Internal Audit Value The main objective of the products of Apple is to integrate diverse functions in a single product so that the user can get the products value that they buy from Apple. The approach makes the products of Apple provide value to customers because they can do a lot in a single product. For instance, an iPad provide value to users because it can get used to watching movies, make voice calls, take photos, and listen to music, editing documents and internet browsing among others. Strengths The platform of iTunes is a good stream of revenue because it is available in diverse Apple products, and also it is compatible with the Windows platform. The loyal customers of the company show that Apple do not have to compete with other competitors in prices terms but terms of reliability and performance. The fact that the firm has no debt shows that Apple can invest in any undertaking, which the firm decides to be appropriate to the company. The point that Apple develops its existing products always shows that the firm will always attract new customers and encourage repeat purchases from the customers that exist. The flagship of retail stores of Apple serves as a demonstration points when consumers who doubt any Apple’s products feature can get to test them. Lastly, apart from informing the customers about the Apple’s products features, Apple’s web site beg also used as a channel of sales to customers who prefer buying online and also direct from Apple. Weakness Apple depends a lot on product launch to boost them in creating attention for its products. Furthermore, the organization has weak relations towards other major firms in the market that has the potential to boost Apple to new heights that are if Apple was willing to corporate with these firms. Lastly, unlike other competitors with a strong presence in diverse markets, Apple’s presence is majorly concentrated in America, Europe, and Japan. Porter’s Five Forces Porter’s five model consists an outline of the analysis of any industry that gets used in analyzation of an industry (Porter, 2008). The five forces of competitive include; bargaining power of customers, threats of new entrants, threats of substitute products, competitive rivalry within an industry and bargaining power of suppliers. Through applying Michael Porter’s five forces, it will assist in establishing the position of Apple in the market. Threats of New Entrants In situations where it is not difficult for any investor to invest in the sector it gets considered that the threat of new entrants to be high. The barriers nature in place in a certain industry establishes the degree of new entrants threats posed to the industry. It can get argued that the new entrants’ threats in the PC, Smartphone and tablets industry is very high. It is because as argued by Kim (2012), great capital amounts of marketing and R&D have to get spent to bring a tablet or a smartphone to the market. To add with, Kin (2012) states that scale economies have not taken the advantage of so as to gain access and platform of distribution channels effectively. Among the new entrants to the industry that contributed to minimization of profits in the industry include BenQ, HTC, ZTE, Huawei, and Lenovo. Bargaining Power of Suppliers In any sector, suppliers include those of the diverse raw materials that get used in the manufacture of certain products. The suppliers power in any industry normally gets determined by the suppliers amount in given industry. It means that few suppliers in a given industry implies more bargaining power from the suppliers. The suppliers’ threat in the Pc, smartphone, and tablet industry can get termed as being very high due to the existence of very few suppliers of operating systems and digital signaling chips. As noted by Forbes (2010), Texas Instruments is the main supplier of the signaling chips in many handset and computers manufacturers. The existence of few suppliers shows that they can easily manipulate the market any time because they have great bargaining power. Bargaining Powers of Buyers The PCs large arrays, tablets, smartphones have developed a lot of power in the consumers hands. However, when the initial purchase gets done, brand loyalty can start to formulate. The Apple store that gets offered in diverse platforms may not get transferrable to another brand that may get deemed as high exit costs. Though, in the initial analysis it may seem that the customers have a great array, their decisions gets restricted temporarily and as often the products get purchased while there are still being bound to a network carrier/provider contractually. Thus, it leads to a great situation for the customer to become acquainted with the company’s product and ascertain the loyalty of the brand. The consumer has great bargaining power; though it can be expensive both personally and financially as they lose their software and apps that they have built their device. Threats of Substitute Products A substitute product can get described as a unique product that when compared to another market product but meets all requirements met by other products that are different with. Some of Pcs substitutes, tablets and smart phones industry comprise; fax and emails. However, threats of substitutes cannot be said to be high because they cannot get used in urgent cases compared to voice calls. Amongst Existing Competitors In the Industry Rivalry in between competing company’s in a certain industry can be of diverse types. Competing organizations compete on form of product differentiation, price wars, and product development. Industry’s low entry barriers show that there exist very many competitors in various sectors that the Apple Company operates that results in intensified competition as the firm aim to maximize their market share. Part II. Marketing Strategy Recommendations In order for Apple to continue doing well in the market, it should put more emphasis on latest products developments that are in line with the development of technology. As it gets established from the marketing audit, Apple requires continuing creating high-end products and increasing its presence in other foreign markets. Additionally, the firm should use their strong brand image that it has developed and launch new ranges of products to the existing products range. Strategy Implementation Prior to any strategy implementation, there is a requirement for preliminary research to get conducted to ensure that the strategies that get implemented are feasible. Moreover, there exists a requirement to develop objectives that the strategies will target to achieve. These objectives can include; Policies and Support Programs Currently, Apple can argue that it has effective policies and programs in place since the firm has experienced enhanced performance year after year in prior years. However, since the company is now expanding to diverse foreign markets, it needs to create new programs and policies for every specific market because policies that work in a certain nation cannot work in another. Apple needs to give training to every employee as far as supporting programs gets concerned, in the foreign markets to ensure that they portray a positive image for Apple. Additionally, it is advisable that the company motivates the employee through giving them attractive salaries and ensuring that their working conditions are conducive. Contingency Planning In situations where expansion to foreign markets tends to be unsuccessful, Apple should target at concentrating in certain markets that it has formed presence in at the moment. It is because these markets have proven to be successful to Apple and, in addition, the new strategies would also be left and adopt the present strategies that prove to be successful for the company in previous years. Strategy Evaluation and Control After Steve Jobs loss, Apple was left with a great void that most people said it might be difficult to fill. But, the current CEO and other employees have proven over the last years that they have the capability to new heights even with Steve Jobs absence. To ensure that the organization is continuously doing well, the firm’s management is required to regularly reviewing various figures against the figures of the forecast to establish if the company as at the right tracks. Past performance figures can also get used to knowing whether the firm is in the right direction or not. After the review on the Apple’s macro environment, it is evident that Apple obtain strengths from its resources along with its capabilities. It is because since it has unrivaled design teams, numerous existing patents, gifted design engineers and successful, innovative, driven approach and value chain. On the other hand, in the industry that Apple operates is quickly changing because the key players are always launching new products that include new designs and technology. Specifically, smartphones and tablets industry has consumers that are price sensitive along with experiences of high leveled imitations in both functions abilities and designs of the smartphones and smartphones. The point gets confirmed by the common counter-accusation against Apple by Samsung and Samsung by Apple. The key sector’s players get based on diverse parts of the world; hence it may be difficult to monitor each move from the players. Therefore, since, all players have no enough market share of controlling the industry, the industry then experience intense competition that get characterized by competitive pricing. The main objective of Apple’s is to dominate the diverse industries that it serves and at the same time getting profits from the stakeholders while contributing to the society’s betterment at large. Following the industry’s nature, Apple is required to adopt effective strategies to ensure long-term sustainability. Due to the aim of expanding the market segment, Apple needs to increase the retail outlets mostly in developing countries. Also, apart from plugging, the company can also develop a mechanism that can allow the devices (iPad and iPhone) to get charged by other means because the main issue that iPhone has got complaints is about the short life for the battery. The company should also license the Siri and Mac software usage to a different manufacturer. Apple should give the customers opportunity to personalize and customize the products they want to purchase from Apple like how Dell and HP provide to their customers. Apple should also have their products being sold at discount rates when there get bought at wholesale by education institutions. As far as responsibility of social corporate gets concerned, Apple should get engaged with the communities in areas where the company has operations because such approaches will go a long way in improving Apple brand. Following the suggested strategies, the below definitive strategies should get implemented; Develop an alternative charging mechanism A close review on the various online forums shows that the main issue with the smartphones and tablets is the constantly plugging in the charge at every time because they always tend to sustain the charge long enough. Since, Apple has established a Research and Development center that comprises talented designers and engineers, the department should be given the responsibility of creating the mechanism. The mechanism should charge the devices whenever certain key gets used as it was in the case with the auto winding watches, which winded every time the watch wearer moved his hand. If Apple successfully develops such a mechanism, it can strengthen the position of Apple in the new segments as the market leader. Moreover, the mechanism should be patented in that Apple may charge specific fee to any competitors that will want to use the mechanism also in their products. Customizable Products Always the customer buys products that they believe match with their wants and needs. The best way to have the products match with the customer’s needs is by letting the customers develop their products according to their needs. Apple can offer such services to the online store where customers decide the Hard disk amount they need for the tablet, the casing color and specific software to get installed in the tablet. Dell and Hewlett Packard adopted the same strategy for the personal computers. Establishment of Apple Outlets In Others Countries To increase the market segments across the world, Apple has to establish more retail shops. As discussed earlier, Apple has more than 357 retail outlets in over ten countries. Though, most of these stores are located in developing countries with the greatest percentage of the stores in the United States. Apple requires to follow its competitors and have more established in the middle-income countries and developing countries. Samsung that is fiercely competing with Apple in tablets and smartphones has already established many retail outlets in developing and developed countries. The strategy has assisted Samsung to become the largest handset seller worldwide after dislodging Nokia in 2012 (Tolentino, 2012; Andrew 2011). In addition, the strategy has played a great role in assisting Samsung increase its gap of as the largest smartphones seller as sales of Galaxy series phones outstripped the iPhone almost 10 million units. Intensify Corporate Social Responsibility The responsibility of corporate social as already established are approaches that got adopted by Apple to meet stakeholder’s needs and reduce the organization’s impact on the environment. In addition, contribute to the improvement of a positive image and strong brand of the company. Despite Apple already existing responsibility of the corporate social schemes, there exist the wants of the company to get more involved in the corporate social responsibility. Apple can get involved in initiatives like technological schools establishment in developing countries, unsold stock donations to the learning institutions in developed nations. Also, it can develop cheap Apple Mac models of computers for schools in the developed nations. Additionally, the company can establish an institution in China for the children rescued from child labor to attend. Conclusion Marketing Audit is a fundamental marketing planning process part. Apple being a global company, it has several strengths, weakness and other external and internal factors that influence its performance. The main weakness in the audit is its weak relations with other organizations and its strength it’s the strong brand image. The position of Apple in the market gets defined through the Porter’s forces. They include; bargaining power of customers, threats of new entrants, threats of substitute products, competitive rivalry within an industry and bargaining power of suppliers. Thus, due to different weaknesses in its organization and products, it needs several strategies to improve its performance. Some of the recommended strategies include developing an alternative charging mechanism, intensify corporate social responsibility establishment of Apple outlets in others countries and offer customizable products. References Apple, (2012). Apple’s official Webpage. Retrieved from: www.apple.com Date of Access 16th March 2015. Banton, M., (2011). Apple inclusive – 2011. Choney, Suzanne, (2012). "iPad users download 3 billion apps". January 4, 2012 . Forbes, (2010). Texas Instruments Dips into The Chips Part, Earning Top Expectations. Retrieved from www.forbes.com/2010/10/25/earnings-texas-instrumnets-equities-marketschips.html  Date of Access 16th March 2015. Kim, H. Y., (2012). Huawei Aims for Higher Profile in Smartphone. Retrieved from http://online.wsj.com/article/SB10001424052970204781804577268741619272720.html  Date of Access 16th March 2015. Michael, B. (2008). The Strategic Marketing Plan Audit 2008. Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy, Harvard business Review, January 2008. Steven, Weyhrich (April 21, 2002). "Apple II History Chapter 4." Retrieved August 18, 2008. Ward, Andrew (July 21, 2011). "Apple overtakes Nokia in smartphone stakes." Financial Times. Retrieved July 21, 2011. Yahoo, (2012).  Apple Inc. financial performance. Retrieved from: http://finance.yahoo.com/q/is?s=AAPL+Income+Statements&annual Date of Access 16th March 2015. Read More