iPhone Case Analysis Essay Example

Apple Inc is a Technological Company

It consists of four main sectors that include Software Company, Retail Company, Service Company and Hardware Company. Steve Jobs made Apple Inc a success story through different business areas. Apple Inc gained fame and success with the launch of the iPod followed by iPhones. It registers incredible profits. Apple Inc is a multinational enterprise which designs and manufactures consumer electronics, computer software and personal computers. It is known for the production of the iPod, Mackintosh computer line, iPad and iPhone. The company has continued to grow and design consumer electronics. A research indicates that Apple Inc was named the most admired company in 2008 to 2010.

Financial Performance

The company has won consumer loyalty. In 2011, it managed to surpass its largest competitor Microsoft Corp in terms of recorded profits. From a chart on Yearly Prices, it is evident that stock price of Apple Inc remained docile for a very long time. Over the years, there was a positive change; thus, in 2005, there was a notable increase in the prices (Heding, 2009). It continued through 2006 with its peak in 2007. Though it dropped sharply in 2008, the earlier trend resumed in 2009. The increase has continued up to date. It could be greatly attributed to the attainment of consumer loyalty. As such, the demand is high. This could also be attributed to the numerous profits that the company made in 2010/2011 financial year. Also, an increase in the company’s stock price implies that the company has gained a competitive advantage and investors are willing to invest due to the prediction of an exemplary performance.

Since Apple Inc constitutes of four portions, and thrives at an extraordinary rate, competitors will not able to compete against it. Apple portrays a vertical integration when maximizing its profits through controlling the manufacturing chain. The company will continue to benefit from the manufacturing process, distribution and selling of its products. The success story comes from its simplicity and adoption of unique technologies.

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As a result, difference will arise in Apple’s financial analysis statement. Apple`s gross margin is 42.41% that relates to sales the company makes each year. On the other hand, Apple Inc is making significant sales of 124.84 billion. The higher the sales turnover for Apple Inc the higher the net profits. Apple Inc will enjoy a net profit of 25.80%. A person will invest in a company if there is a promise of a return on the capital investments. Apple earning per share is relatively high because of high performance in the market, and its net profits are also high.

During the first quarter of 2012, Apple Inc had total assets of 138,681.0 billion. The wider asset base can be explained by high earnings per share of Apple Inc. Apple Inc continues to thrive in the market and maintains a high record of profits.

Product Differentiation

Apple Inc will create and produce innovating products. The mouse and trackpad are one of the best products. Apple products are unique, durable and comfortable to use. The company`s products have hit the market, and this has greatly contributed to its success. The production of different products by Apple has resulted to the introduction of different products in different market niches. Apple has brought competition to the next level with its new products that the company manufactures (Heding, 2009). Different products have impacted the technological market differently. Different buyers have been attracted to the various products that Apple has to offer. The Apple products include iPads, iTv, iPhone and iPods. It also develops a number of software and enhancing applications. Apple introduced the iPod in 2001 and since then it has diversified its products. Its competitors can no longer keep up with the changes in the technological world. Apple has, therefore, become a haven for consumer electronics.

Steve Jobs agreed that the iPhone would run on AT&T`s poky EDGE network but none of this mattered to him. He had a master plan on how iPhone would revolutionize the world of wireless network. Apple Inc then cracked open the carrier-centric structure of the wireless industry. As well, the company created many opportunities for consumers, developers and manufacturers. Jobs went further to develop more activities that would increase the benefits of the consumers. He released a developer`s kit to assist people to write programs for the device. Carrier networks have gained more popularity and become more valuable. Consumers continue to spend more time on devices and thus on networks. As well, this will continue to generate the revenue for the company and satisfy the customers` needs. According to Paul Roth, AT&T`s president of marketing, the carrier is exploring new services and products that take advantage of the iPhone`s capabilities. Jobs was determined to make other see the benefits which wireless carriers could enjoy.

Product Placement and Superior Brand

Apple entered the market of software development although Microsoft developed software for personal computers. The company priced its products at superior level than other competitors. Its marketing strategy has put Apple on the chart. The company has managed to expand its presence in global markets and obtained customer loyalty. The company has become a global brand and can sale its products in any country. Apple has become a name that can be trusted by customers. Apple Inc carries marketing to ensure that even developed countries are aware of its products. It has increased the market share since people have trust with its products. It was due to the firm solid foundations of R&D, traditional marketing and product differentiation. Apple has become a superior brand with its unique products that are sold in the global market. The brand is associated with quality and unique products that attract new customers. It has been able to make its competitors lower their prices. It has favored Apple since its customers keep coming for more. Its superior brand has put Apple on the front line of innovation. As it has been noted earlier, a new brand is usually copied by its competitors.

Therefore, it is considered that branding should be carried on very flexible grounds. It was meant to evade the competitors’ moves towards the company’s new brand. When a company notes that its brand has been copied, then it can implement re-branding. However, it should not divert its ground away from the original brand. It reduces the advertising efforts. Usually a company can decide to rebrand a product with an aim of changing the value of the product, however, not interfering with the brand fame. For instance, the Apple Inc Computers was rebranded unto Apple Inc. It was because the company shifted its focus towards consumer electronics.

Customer Loyalty

This is an important aspect for the recognition of a company`s product. Apple managed to do this. The sellers of Apple have all necessary information that is needed to sell its products. This has helped Apple to provide the best customer support unit available to its customers. Customers are able to have the real experience of using the mac and also check the features of the product. Apple customers can never get bored of its products. They always want more which has disadvantaged other competitors. The customers know the benefits that come with the products of Apple. The company`s high quality and unique products have captured quite a good percentage of the market. It gave the company the upper hand over its competitors in the field. When customers are satisfied, they will come back for more services and products. A product developed by the company keeps other technological companies on their toes.

Maintaining Secrecy

Apple employees believe that they are creating something new the market. That’s why all details in regard to products are highly protected and cannot be informed to other people. This is a major reason Apple has floated among the best companies in the market. Apple has conquered the large market share and successfully beaten other competitors. There is an advanced technology that is used to make Apple products. Technology should be kept in secret to prevent competitors from acquiring it. The designs and science behind these artworks should be kept in secret to avoid imitation and preserve f the knowledge. The company will be able to take a step forward if the knowledge is well preserved. The competitors will not be able to know what happened when new products keep streaming in the market.

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Outsourcing

Apple has outsourced many of its products in order to reduce the costs. This has cut the costs by a big margin, and the company has continued to grow. Apple has continued to improve its sales each year. The cost reduction strategy has greatly improved the sales of the company. This has been also a secret for its pricing techniques that the company has acquired. The cost reduction strategy has greatly benefited Apple and made it possible for the company to make huge profits. Great profit margins are experienced when labor is cheap.

Strengths and Weaknesses of Apple Inc

Apple Inc was very successful in the early 1970s when the company had been just introduced. This was greatly attributed to the company’s founder Steve Jobs who did everything in his power to uphold corporate culture. This worked extremely well for the company. The company was ranked as one of the most successful companies, together with Microsoft and Southwest Airlines. This was one of the competitive advantages that made the company stand out among other competitors such as IBM. It is one of the major strengths that aided the company in establishing itself in the extremely competitive industry.

Brand creation involves first of all sketching of the branding platform. This platform is the hidden basis of its long-term identity and its main source of driving energy. Each brand reflects its own factual project and its own philosophy. Therefore, the brand identity should be created and defined taking into consideration such aspects as factual objectives and philosophy. The Apple Computer emerged from the West Coast counterculture and need to produce letter labels, print-outs and databases. Therefore, the two friends Steve Jobs and Steve Wozniak took advantage of the situation. They ensured that their brand met the needs of consumers. This became a factual project because it relied on the opportunities that were vividly available.

Creation of a brand name should always be the first to consider after the platform draft. Most successful brands have names that are randomly selected. That does not mean that a brand name should not be thought of. The competition nowadays is too strong for an unthought-of name to become popular in the market. Successful brands may have succeeded because their names were very captivating to the consumers’ ears. Time is very crucial in choosing a name: a brand has to win itself its own territory.

From the beginning, it must anticipate all the potential changes in its lifetime. It must be selected taking into consideration the brand`s destiny, but not in relation to a specific market and the status of a product in the beginning. The possibility of international expansion should also be taken into consideration. A brand name should not entirely constitute the company’s name, unless the company’s name has something to do with the features and characteristics of the brand. The brand is mostly the creator’s identity.

Another major strength was the company’s ability to motivate its employees. This was achieved through the introduction of the Apple Fellows program. Under the program, any employee who contributed extraordinarily to personal computing or other technical issues is rewarded for the same. It provides employees with motivation to strive harder. In the process, Apple Inc will enjoy the benefits illustrated through the overall improved company performance.

Statistics also indicate that the company enjoys a high degree of customer loyalty. This is despite the fact that its accessories are more expensive that those of its competitors. This has been attributed to the company’s ability to support the Macintosh User Groups. This is the strength that its competitors have not been able to gain.

The company has also faced some hardships along the way. For instance, the lawsuits filed by Apple Corps Limited due to the disputes about the logo of the company. This created a negative picture of the company. However, the dispute was eventually settled at the end of 2007. Apple Inc also tried introducing other consumer electronics in the late 1980s but the results were disastrous. This was a major setback and the company incurred huge losses. This is an indication that poor research methods cost the company a lot. This is a major weakness that the company faces.

Reason for Apple’s Success

Even after the death of its founder and ideological leader, Apple Incorporation, remains the most successful and expensive in the world. McKnight states that, “Many writers covering his death have compared him – as his biographer does – to Thomas Edison and Henry Ford. Isaacson calls him “the greatest business executive of our era” (2012). The success of his business is a result of exceptional leadership, talent, and creative approaches to management.

Almost all competitors acknowledge that Apple’s incredible results related to management practices have been laid down by Steve Jobs. Steve Jobs is a legendary figure in global business. Due to his perseverance, the world has found out what the real computers for ordinary users are. In addition to computers, Steve Jobs has created the business of computer animation cartoons, and presented to the world legendary iPod. Finally, under his leadership, Apple has introduced a new mobile device, iPhone, which in the people’s eyes changes the bases of the mobile industry. This research will discuss the major reasons for such considerable success of the company.

The key reasons that have led Apple to success are its marketing strategy, leadership skills, product innovation, and differentiation.

Marketing Strategy

Like all companies, Apple has undergone the tremendous changes in its development and marketing strategy. The further people move into the future, the more changes they can see in marketing. Today, Apple’s Marketing Strategy is very interesting. It is like a textbook on marketing and sales. Quality – an essential part of marketing strategy An essential part of Apple’s Marketing Strategy is quality. The company cannot rely on a long-term and substantial success without a proper level of quality.

Apple had to face up with the difficulties. Thus, the company could consistently outperform their competitors. For instance, Apple Sores are quite expensive and need much time to be developed. However, their useful effects have blocked all costs. First, consumers were able not only to look at the goods, but also to touch them, and test how they work. Taking into consideration that the created products were friendly to users, buyers immediately received a positive operating experience, despite the fact they have not purchased the products yet.

All this would have been impossible without a careful attention to the quality of Apple’s products. Apple is two years ahead of its rivals It is the most scared item for Apple’s rivals. While those competing with Apple only introduce competitive products, it is already working on the products that are ahead of time, or at least two years ahead. Bajarin states that, “the new iPhone that will most likely go to market in October was designed and signed off on two years ago. And the iPhone the company is working on now is for the fall of 2014” (2012).
Consistent brand promotion Regardless of exactly the location, where Apple product has been purchased, it always has a high level of quality. It is a great strategy for promoting this brand and gaining the customers’ loyalty.

Some shops were founded in Cupertino. There is no doubt that one can always find a great number of people in these shops as they are with an excellent design and interior. Apple has managed to create a sense among the consumers that they are buying a premium product having the quality and status. Products are even packed beautifully. Consumers just open a box and already feel some joy as well as an aesthetic pleasure of shopping.

As a result, a large group of consumers has been formed. They are only loyal with products and services of the company from Cupertino. Apple is always trying to satisfy their customers
A basis for creating loyalty is the satisfaction of customers. It is a prerequisite of ensuring that customers always use the products and services of the company. Every marketer knows that regular customers are the main strength of the brand and the foundation of a successful business. Therefore, before looking for new clients, it is needed to verify that current clients are satisfied.

According to the article ‘3 Marketing Strategies We Can Learn from Apple,’ “When a company has fans camped out overnight in the rain for days just to be the first people to get new products, they have reached rock star level” (2013). Creating real fans, not just satisfied customers, the company ensures itself a stable position for many years. In the today’s competitive market, it is of a special importance.

Leadership Skills

A considerable success of the company is contributed to leadership skills of its founder, Steve Jobs. He was an entrepreneur with a capital letter. Steve Jobs founded company in 1976. In 1985, he was overthrown. However, in 1997, he returned to save Apple from bankruptcy. Before Steve’s death, in October 2011, he managed to make Apple the most successful and the most expensive company in the world. In addition, he helped to transform seven major industries: the industry of personal computers, animated movies, music, mobile phones, tablet computers, retail, and digital publishing. Thus, he belongs to a pantheon of great innovators of America. Isaacson states that
Steve Jobs is one of the most compelling business leaders of our time and it is impossible to replicate his success. Valuable lessons can be learned from how Jobs created products and ran his companies. These lessons can be replied by leaders within their own contexts and styles. (2012)

Jobs learned how to be delighted with simplicity when he had been working at Atari. Atari games had to be simple so that even a novice drunk could understand them. His love for simplicity in design originated at the conference at the Aspen Institute in the late 1970s.

When Jobs visited Xerox Development Centre in Plato Alto and saw the plans for building a personal computer with a mouse and graphical user interface. However, he started to create a simpler and more intuitive design. It allows users to drag and drop documents as well as folders on a virtual desktop. Xerox mouse was with three buttons; and it was worth of $300. Jobs asked one of the founders of a local industrial design firm, Dean Hovey, to make a similar model. However, it had to have a simple one-button, which would worth of $15. Dean Hovey completed an order.

Steve Jobs considered that the best way to achieve simplicity was to make sure that all the hardware, software, and peripherals had been integrated with each other. That is the whole Apple ecosystem. For instance, iPod connects to the Mac via iTunes. Connecting devices becomes easier, synchronization becomes smoother, and bugs occur very seldom. More complex tasks, such as creating the new playlists, can be done via computer. It is most suitable for this purpose, thus, allowing iPod to have fewer buttons and functions.

Steve Jobs and his company took a full responsibility for their users. All aspects of customer service are closely linked with each other, starting from the productivity of the microprocessor ARM in the iPhone and ending with an act of purchase of phone in Apple Store. In 1980, Microsoft and Google, in recent years, took a more open approach. It has allowed using their operating systems and various types of software by different manufacturers. This business model sometimes gives advantages. However, Steve Jobs believed passionately that this was a recipe of shitty products. He considered that people were too busy and had many more other essential things to accomplish than ponder over how to integrate different computers and devices.

Jobs’ habit to take a full responsibility for all things stems from his responsibility. He sought to keep everything under control. This was due to his passion for excellence and commitment to make first-class products. He had allergy only because of an idea of using great Apple software on lifeless platforms of other companies. In addition, he was allergic because of an idea that unauthorized applications or content could contaminate the perfect devices of Apple. It was a method that was not all the time maximizing short-term profits. However, in the world filled with useless devices, annoying interfaces, and inscrutable error messages, it has led to the emergence of amazing products marked with delight of users. Being in Apple ecosystem is almost as sublime as walking in one of the Zen gardens of Kyoto. Jobs loved them very much. Sometimes it is good to be in the hands of the fanatic control.

During the development of nearly every product he had ever created, Jobs at some point, pressed the pause button and returned to the board. He felt that this thing was not perfect enough.
Steve Jobs was very impatient, irritable, and cruel to people around him. However, such an attitude to people, although it is not commendable, came from his passion for excellence and a desire to work only with the best ones. It was his way for avoiding the situation where everybody, including managers, had been so polite the mediocre employees could feel convenient mucking about. Steve Jobs used to say that “I don’t think I run roughshod over people, but if something sucks, I tell people to their face. It’s my job to be honest” (cited in Qualman 2011).
It is important to understand that the rudeness and crudeness of Steve Jobs was accompanied by an ability to be inspiring. He infected Apple employees with the unchanged passion for creating innovative products and the belief that they could do what had seemed to be impossible before. So he had to be judged by his results. Jobs had a friendly family; the same thing happened in Apple. His best employees tended to stay longer and were more loyal than the employees of other companies, including those headed by softer bosses.

It was the main features of Steve Jobs’ leadership, which helped him to start such a successful company.

Product Innovation and Differentiation

Apple is an innovative company. The innovative company is different from other companies not only due to the fact that it comes first with new ideas. Such firm also knows how to leapfrog competitors when it is over. It happened when Jobs had built the original iMac. He was focused on how to make it easy to manage photos and videos, but the music had been deprived of attention. People with computers on the IBM PC platform uploaded and shared music. Then, they recorded it on their CDs, though iMac’s slot could not drive CDs.

After the iPod has become very popular, Jobs began to worry about the threats. One of them was that mobile phone manufacturers had begun adding music players on their phones. Jobs then decided to create iPhone, knowing that the latter one can eat selling of iPod. “If you don’t cannibalize yourself, someone else will,” Steve Jobs said (cited in Yastrow n. d.).
One more factor that leads to the success of any company is an ability to stand out in a competitive environment. There are different ways how to stand out in the competitive environment and to ensure large products’ sales for the company. Competitive strategies are divided into three main types: cost leadership, differentiation, and focusing (on differentiation and cost).
A competitive differentiation strategy involves the creation of such goods or services that would constitute a unique product in its industry and would cause a concern among consumers. Differentiation can be used in several ways: products differentiation, services differentiation, an image of the enterprise, staff, advertising, sales, policy sales, and etc.
Apple actively uses the differentiation of the image. Notorious iPhones do not exceed technical characteristics; for example, Samsung products. However, the motivation of consumers is affected by the prestige of the brand. Apple has a certain image, and the years of experience behind. According to Calkins,

Conclusion Analysing all the information discussed above, it becomes clear what reasons have led to the considerable success of Apple.

The main reasons include:

• A marketing strategy;
• Leadership skills;
• Product innovation and differentiation.

Recommendations

The company should hire qualified employees to market the company and its products. If the company`s products are well marketed, more customers will be attracted to the company. People will know more about the company and have information about its various products. Marketing helps to spread the information and it is also a form of advertising. Qualified employees will be able to ensure that the company is well advertised to facilitate competition.

The company should start thinking outside the box and diversify its products. Different products will attract different customers (Heding, 2009). Customers will be motivated to purchase more products and thus boosting the profits of the company. It will help to improve the status and image of the company. The company’s management will be restructured. The flow of authority and decision making will be effective. The company will be properly managed, and the decisions will be carefully made. Proper management of the company can be achieved when good decisions are made on behalf of the company. Managers will be carefully monitored so that they do not make selfish decisions that can lead to losses suffered by the company.

The company`s employees should be able to keep secrets about the firm. This will encourage the innovators to be creative. High quality products will help in price setting. The company will be able to compete against its competitors. This will ensure that the company will be able to prosper and make a profit. The strategic steps will ensure that the price is well set. The company will be able to prosper and compete against both local and global competitors.