Marketing Audit for Apple Inc - Report Example

MARKETING AUDIT FOR APPLE INC. Name Course Tutor Date Executive Summary This report is based on the analysis of Apple Inc. Company with reference to marketing. Generally, the report is a market audit of the company. The report outlines the strengths, weaknesses, opportunities and threats with reference to the company. Further environmental scan is done and presented on the PESTEL analysis that is part of this report. The report also contains the analysis of the competition, stakeholders, target markets and customers of a variety of Apple’s products s well as services. Having looked at the above tenets the report concludes by offering necessary recommendations that are worth implementing fo the success of the company. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Environmental Scan 5 Internal Environment 5 SWOT Analysis for Apple Inc. 6 Strengths 6 Weaknesses 7 Opportunities 7 Threats 8 External Environment 8 PESTEL Analysis for Apple Inc. 8 Political Analysis 8 Economic Factors 9 Socio-cultural 10 Technological Analysis 10 Environmental Analysis 11 Legal Factors 11 Customer, Competitor, and Stakeholder Analysis 11 Target Market Analysis 11 Customer analysis 12 Competitor analysis 13 Stakeholder Analysis 13 Conclusion and Recommendations 14 Bibliography 15 Introduction Apple Inc. commonly known as Apple all over the world is a multinational company that is American Based (Lashinsky, 2012). The headquarters of the company is based in Cupertino in California. Apple specializes in designs, development and selling of computer software, personal computers, online services and a range of consumer electronics (Sutherland, 2012). The company traces its history to 1976 when it was developed by Steve Jobs, Ronald Wayne and Steve Wozniak with the chief aim of selling PCs (Sutherland, 2012; Lashinsky, 2012). The company got the name Apple Inc. in 2007 when it shifted its focus to include consumer electronics as well (Apple Inc., 2015). The company is famous for its Mac line of computers, iPhone and Smart watches as well as Smart TV (Apple Inc., 2015). In addition to the products, the company also provides a range of online computer services such as iTunes store, App Store and the iCloud. Some of the software that are offered by the company include Safari web browser, OS X and iOS operating systems, and productivity as well as creativity suites (Sutherland, 2012). Currently the company is among the best performing information technology companies, having the second largest revenue after Samsung Electronics Company (Sutherland, 2012). The four aspects that make Apple successful are the products, the target markets, the services and the competition (Sutherland, 2012). Environmental Scan Internal Environment Apple Inc. is a company that operates in a conglomerate of industries including consumer electronics, computer hardware, computer software and digital distribution (online service) industries (Apple Inc., 2015; Sutherland, 2012). The products of the company include iPhone, iPod, iPad, Mac, Apple TV, iOS and OS X operating systems, and a portfolio of professional suites (Apple Inc., 2015). Apple also offers digital content to its worldwide consumers through its online based services such as iTunes, iCloud, App Store, iBook Store, and Mac App Store. The company sells its products and services globally through its online stores, retail stores and direct sales through third party retailers and distributors (Sutherland, 2012). SWOT Analysis for Apple Inc. Strengths The company has internal strengths that are evident. First off, the customers are loyal to the products (Tar, 2013). The products that are released by the company expands its network and ecosystem. The loyalty is evident following the closed ecosystem of the company (Apple Inc., 2015). This means that the products of the company are interlinked to supplement and support each other (Tar, 2013). The company is a tech giant that leads innovation in the mobile device technology (Apple Inc., 2015). Apple has been voted as the innovative business for some years now (Lashinsky, 2012). The products of the company mirrors its innovative inclination (Sutherland, 2012). The company also has a strong financial performance that is rated among that of the best companies (Lashinsky, 2012). With reference to debt, the company has in no way been affected by interest rates or credit markets and do not have any debts so far (Tar, 2013). The company has the best brand reputation that is channelled through its innovative promotional methods such as adverts (Lashinsky, 2012). The Apple brand has been valued the second best in the world for some time (Apple Inc., 2015). The brands of the company are unique in their design, well-functioning and have sound performance (Lashinsky, 2012). The retail stores of the company, both online and physical are committed to ensuring that the customer experience is excellent (Tar, 2013). The company has invested in its knowledgeable staff so as to increase brand awareness and provide direct contact to the customers. The company has also invested in advertising and marketing teams. The teams have been charged with the sales and have been doing quite well (Tar, 2013). Apple Inc. has over 92, 600 fulltime employees plus an additional 4400 temporary employees who are behind the whole product development and marketing as well as sales (Apple Inc., 2015). Weaknesses There are also weaknesses that re evident in the company. First off, the products and services are highly priced compared to that of its competitors. This is a weakness as it would make the market performance of Apple decrease (Tar, 2013). Secondly, the incompatibility issues arising from iOS and OS X make more customers prefer the products of the competitors such as Microsoft Operating system and hardware from Intel Company (Apple Inc., 2015). Thirdly, the market share of Apple has been decreasing and could jeopardize the market performance of the company (Tar, 2013). Fourth, the firm has been involved in cases involving patent infringement that could damage its brand reputation as well as worsen its market performance (Tar, 2013). Fifth, the new products that have been released in the market have had some faults that are likely to affect the preference of the products by customers. Opportunities There are many opportunities for Apple Inc. The launch of iTV will expand the product ecosystem and will be beneficial in supporting the sales of Apple TV that was recently unleashed (Apple Inc., 2015). The demand for iPad mini and iPhones is slowly increasing all over the world with most people becoming conversant with technology (Sutherland, 2012). This will strengthen the competitive advantage of the firm (Tar, 2013). The smartphone and tablets market has grown considerably following their proliferation of the market and the rise of globalization (Tar, 2013). The introduction of iPhone 6 will revamp the market for Apple in consumer electronics market. Threats The competitive nature of the market in itself is a threat to the company. Apple’s major competitors such as Microsoft and Samsung are targeting the common market and are therefore using low prices as the key tool against Apple (Sutherland, 2012). The other threat to apple is the strength of the dollar and the rise of taxation laws as those observed in USA in 2013 (Apple Inc., 2015). The other threat is losing the employee who are human capital and talent base for the company that will make the company loose its innovative capabilities (Sutherland, 2012). The other observable threat as it is now is the growth of the android operating systems that has changed the world of smartphones and has almost the same features as the Apple operating systems and comes with an advantage of cheap prices (Tar, 2013). The other major threat to Apple is the flooding of the online music market with competition from competitors such as Amazon, Spotify and Walmart (Tar, 2013). External Environment The external environment can be looked at through assessing the political, economic, socio-cultural, technological, environmental, and legal environments of the company. PESTEL Analysis for Apple Inc. Political Analysis The market performance of Apple greatly depends on the political stability of different countries worldwide (Khan, Alam and Alam, 2015). Most of the production for Apple is done outside the US in countries such as Czech Republic, China, Korea and Cork. It is also reported that most sales of the company come from other countries other than USA (Khan, Alam and Alam, 2015). This means that any form of political instability in these countries can affect the revenue of Apple. Additionally, poor political relations between the USA and the other countries would hamper the success of the company. Torres et al. (2012) asserts that there has been political pressure on Apple through the work related issues, especially from its supplier networks that have not adhered to human right laws. Torres et al. (2012) gives an example of Foxconn employees who have been stressed leading to mishaps in the workplace, such as the May 2010 incidence where 2 employees lost their lives. Additionally, strong labour and environmental regulations in the US makes it difficult for Apple to compete favourably in the market. Economic Factors Apple Inc. just like any other multinational is exposed to the impacts of recession, inflation and economic crises that may eat into its revenues (Khan, Alam and Alam, 2015). This is exacerbated by the fact that most of the products of Apple are premium priced and thus targeting high end consumers (Khan, Alam and Alam, 2015). The increased rate of inflation in the USA has affected the company due to the large amount of cash reserves. Changes in exchange rates all over the world have also been affected by the strength of the dollar. This has affected the company in that the net sales as well as gross margins have decreased significantly. The other factors of economic significance have been changes in prices of the resources that Apple is using (Khan, Alam and Alam, 2015). For example, Samsung which makes the application processors of the company recently escalated its prices highly affecting the company revenue and profit margins being that Samsung is also its competitor (Khan, Alam and Alam, 2015). Socio-cultural Globalization has changed how people interact as well as how the consumers perceive certain products over others. The presence of Apple products has made life even easier. It is evident that in nearly every corner of life and sector of the economy there is an Apple product or service in use (Khan, Alam and Alam, 2015). The luxury items market has expanded and this has boosted the sales of the company. The contemporary society also attach value such as status symbols to the items of the company, further making the sales to increase. There has also been the increase in entertainment and the mobile video services (Khan, Alam and Alam, 2015). The threat of piracy is eminent yet it has been curbed in most countries. This is indicative that all the socio-cultural factors are beneficial to Apple Inc. Technological Analysis The major challenge as at now is the dynamic nature of technology. This not only threatens Apple but also other technological based companies (Khan, Alam and Alam, 2015). Failure to keep up with the pace at which technological development and advancement is taking place, might lead to failure of Apple and reduced market share v. The development of the application processors have received a boost following the rise of companies that provide engineering services other than Samsung electronics that is currently the chief provider of its application processors. Cloud based technological solutions are also increasingly being sought for by most of the companies that handle huge data. This is a selling point for the iCloud services as well as software that support the cloud based services. The mobile advertising market has also received considerable embrace by most of the consumers (Khan, Alam and Alam, 2015). This is an edge for Apple through its iAd which is an advertising platform on some of its products. This again is an opportunity for the company in that it can expand its product and services portfolio (Khan, Alam and Alam, 2015). The company has invested in research and development so as to have an innovation edge over its competitors. The iPod has been seen as a major breakthrough technological innovation of all times after the Walkman. The company is also a pace setter in the electronics industry (Khan, Alam and Alam, 2015). The deal between the company and China Mobile is a competitive edge of the company as it strives to conquer the world market. Environmental Analysis Apple has taken a responsible approach in ensuring that it complies with the set environmental regulations (Apple Inc., 2015). The company has ways of reporting its entire carbon footprint owing to the life cycle of the products. Apple has protocols followed in disposing the electronic equipment at their end of life cycle and it recycles the computers and displays as well (Khan, Alam and Alam, 2015). Apple is also involved in coming up with sustainable methods for energy conservation. Legal Factors Apple Inc. has been a participant in legal proceedings since it commenced its operations (Khan, Alam and Alam, 2015). An example is the 2009 case where Nokia Corporation sued it for infringement of the latter’s patent relating to wireless technology. Other akin cases have been those of Samsung and HTC (Khan, Alam and Alam, 2015). Customer, Competitor, and Stakeholder Analysis Target Market Analysis Apple Inc. targets many market segments amongst its consumers. The teenagers form the major target market of the firm (Saini, 2015). This is due to the fact that most of the teenagers use iPods for a plethora of reasons be it social, entertainment, and education among others. Most of the teenagers like playing games, listening to music and visiting social platforms such as MSN, Myspace, Facebook and Twitter among others (Sutherland, 2012). The second target market is the college as well as university students who use a range of Apple products in their studies and presentations owing to the lightness and trendiness the products come with (Saini, 2015). The third target market is the business people or the working class who are intrigued by the Apple products (Saini, 2015). This has been made possible by incorporating business applications in the devices. Additionally, the software suites form Apple can be tailor-made to fit the needs of a business (Saini, 2015). Still on the same, most business people store their work in cloud storage that is offered by Apple iCloud (Saini, 2015). The fourth target market is the young children and kids owing to the quality of the touch screen and applications that are good for the cognitive development of kids (Saini, 2015). Lastly, Apple also targets adults who in their daily life go for quality (Saini, 2015). There are range of products to suit the needs of adults as they communicate and move about their daily duties. Customer analysis Nearly everybody uses Apple products. However, teenagers have shown their rising demand for the products of Apple such as iPods and iPads (Nydailynews.com, 2014). A recent study done in the US indicated that over 60% of the teenagers already own iPhone (Nydailynews.com, 2014). Most teenagers who do not have iPod have plans underway to make purchases soon. Most of the teenagers spend most of their time in gadgets that are used for gaming (Nydailynews.com, 2014). In the study 8% of the spending of the teenagers was on electronics and gadgets. 67% of teenagers in the US alone have made plans to purchase iPhone besides owning tablets. The other product preferred by the teenagers is the iTunes music store and the slim ear buds (Nydailynews.com, 2014). Most teenagers also have shown preference and 17% already own Apple Smart watches (Nydailynews.com, 2014). This group is likely to be influencers of the parents to buy them the products of Apple so that they can be able to fit in the society and also get a chance to enjoy. Competitor analysis Apple Inc. has a number of competitors in the industry. The largest competitor right now is Samsung electronics (Saini, 2015). With reference to the teenagers other companies such a Samsung and Sony with their mp3 players pose competition to Apples iPod. Additionally, the iPad is likely to face competition from Samsung tab. The iPhone that is mostly preferred by teenagers is likely to face competition from smartphones that are offered by Samsung. Nokia, HTC, and Sony Erickson. Stakeholder Analysis Stakeholders are people or group of people who has an investment or interest in a business or industry (Sutherland, 2012). With reference to Apple the key stakeholders include the employees, the suppliers, customers and the government. Apples employees have access to the products of the company at discounted prices and are thus treated nicely (Sutherland, 2012). Being that the employees are diverse and also have families they are able to act as opinion givers in the market through word of mouth so as to make more people see the necessity of purchasing Apple products. Conclusion and Recommendations Apple Inc. is a successful tech company that boasts of a large market share and the best financial performance over the years. As evident in this report Apple Company has internal strengths that it should capitalize and leverage on for better market performance. To better penetrate the market the company should re-evaluate its marketing strategies so that the teenagers who are the best market as it appears are well reached and captured. Apple Inc. should also exploit the opportunities that are presented by the increase in globalization and advancement in consumer habits as well as shift in consumption patterns across the world. The company should keep check of the threats that exists in its environment as well as those existing internally so as to remain the best performer in the tech business. It is essential that the company come up with proper marketing campaigns through adverts and social media to reach the teenagers as well as the parents so as to expand its market share, specifically on iPhone. There is also need to invest in research and development so as to produce unique products that are based on latest innovation. Last but not least, the company should also continue supporting its stakeholders so that they promote the company. This will also make the company have a good reputation that will make most of the consumers prefer its goods. Bibliography Apple Inc., (2015). Apple - Jobs at Apple - Corporate. [online] Apple.com. Available at: http://www.apple.com/jobs/us/corporate.html [Accessed 30 Aug. 2015]. Khan, U., Alam, M. and Alam, S. (2015). Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management, [online] 3(6), pp.955-967. Available at: http://ijecm.co.uk/ [Accessed 30 Aug. 2015]. Lashinsky, A. (2012). Inside Apple. New York: Business Plus. Nydailynews.com, (2014). More than 60% of U.S. teens have their own iPhone and iPad, prefer Apple products to the competition: study. [online] Available at: http://www.nydailynews.com/life-style/u-s-teens-favor-iphone-apple-products-study- shows-article-1.1751028 [Accessed 30 Aug. 2015]. Saini, J. (2015). Apples Target Market. [online] Apple Inc.   Case Study. Available at: http://appleinccasestudy.weebly.com/apples-target-market.html [Accessed 30 Aug. 2015]. Sutherland, A. (2012). The story of Apple. New York: Rosen Central. Tar, A. (2013). Apple SWOT analysis. [S.l.]: Grin Verlag Ohg. Torres, C., Garcia-French, M., Hordijk, R., Nguyen, K. and Olup, L. (2012). Utrecht Law Review. Four Case Studies on Corporate Social Responsibility: Do Conflicts Affect a Company's Corporate Social Responsibility Policy?, [online] 8(3), pp.51-73. Available at: Availhttp://www.utrechtlawreview.org/index.php/ulr/article/view/205 [Accessed 30 Aug. 2015]. Read More