Strategy Analysis & Formulation of Apple Inc.

Conclusion

In conclusion, the marketing strategy formulated for Apple Inc. is to increase market share as well as provide consumers with affordable products which are value for money. In addition, it is also to regain their position as market leaders in the smartphone industry which was taken from them by their main competitors, Samsung.

• Opportunity in the market

The Strategic Gap

Customer Profiling

• The difference between where Apple is and where Apple's Competitors are is a gap

• The negative competitive intelligence gaps

High life living

• Earn a significant amount of income

• Known as corporate giants

• Spend lavishly and choose to buy branded products

• Reason for choosing this segment is because high profit revenues can be generated.

• Create new designs that exceed past any competitor that offers the newest technology innovations and methods

Three Customer segments

• The Hard Worker
• The Growing Candidate
• High Life living

Apple's Strategic Gap

• Market share Indexes

• Apple in recent quarter is down on market share

• Apple's competitors have closed the gap

• Retaining market share is a main priority

Identifying the strategic gap

The Growing Candidate

The Buyer Profile

The Hard Worker

• Middle-class income category

• Own a SME or working within the business sector

• Reason for choosing this segment is to retain Apple loyalists.

• Introduce more innovative products that are more sophisticated and meet the needs of potential and existing customers

• Who?
• What?
• Where?
• When?
• How customer choose?
• How do they respond?
• Will they buy it (again)?

• Hard working employees

• Low amount of income

• Teenagers and University students

• Reason for targeting this segment is so that Apple can expand their product range

• Cost effective - affordable alternative

Competitor Gap

• Competencies and capabilities to close the gap

• Discussion of the strategic gap

• Implication on strategic performance of Apple

• Implications on competitive advantage of Apple

• Alternatives for solving the gaps

Apples' competitors have identified the strategic gap on being cheaper from which Samsung and other leading Google androids.

Distribution Gap

Financial Forecast

Product-line Gap

The gradual loss of supremacy in the Smartphone market due to slow innovations and new product roll-outs has allowed competitors to catch up

Changing the appearance of their products and technology as consumer are becoming less interested in the design and look of the phone.

The following tables illustrate the financial performance of Apple and implementation and control of the new market strategy.

Financial Performance

Implementation

Marketing Program

Marketing mix consists of:

• Product
• Price
• Place
• Promotion
• People
• Processes
• Physical Evidence

Key Changes

Implication of changes

• Introducing the "cheaper" iPhone 5C

• Low cost to produce

• Apples products are sold in retailers, wholesalers and distributors located in low-middle income earning regions

• Use of traditional advertising

• Tailored service & technical support

• Maintains 'try before buy' method

• Increase productivity & sales therefore increasing market share

• Will no longer be regared as a company that charges premium prices

• Larger segments will be targeted

• Distribute to more regions

• An increase in brand loyalty and awareness of product

Apple's STP Strategy

Segmentation

Psychographic

• Personality

• Lifestyle

Demographic

• Age

• Life stage

• Country of birth

Socioeconomic

• Income

• Education

• Occupation

Targeting

Positioning

• Extensive targeting

• Differentiated marketing strategy
• Creation of custom market programs to suit each target market

• Apple is well coordinated and is able to accomodate the new marketing strategy

• Position by price and quality

• Introduction of iPhone 5C can increase market share

• Apple products generally known to be expensive

• Cheaper, affordable phones will now be available to market.

Competitor Analysis

Competitors:

• Samsung
• Nokia
• Sony
• LG
• ZTE

Strengths & Opportunites

Weaknesses & Threats

Introduction

Purpose and plan

• Formulate a new marketing strategy for Apple Inc. and provide a thorough analysis

• Outline marketing concepts such as a strategic gap analysis, competitor analysis, STP strategy, marketing program and the financial and non-financial analysis

• The new strategy formulated for Apple Inc. is to retain and increase market share with the introduction of the iPhone 5C

Competitve Situation & Past Performance

Company Background

Problems & issues facing Apple

Overview of Industry

• Apple Inc. is a multinational corporation

• Established in 1977, headquartered in California

• Market leader in consumer electronics and media sales industries

• Products include the iPhone, iPad, Mac, iPod, Apple TV

Internal Analysis

• Competition from LG, Lenovo, ZTE, and mainly Samsung.

• Overtaken by Samsung as the world's most profitable Smartphone maker.

• In the second quarter of 2013 Apple endured a $4.6 billion operating profit for their handsets

• World's most profitable handset vendor for four consecutive years until Samsung.

• Apple's profit margin for its handset division recently declined

• The cell phone industry is one of the fastest-moving industries worldwide

• Asia Pacific region dominates this industry.

• The global cell phone industry is expected to reach an estimated $334.8 billion in 2017

• Developing regions are expected to demonstrate significant growth

Overview of Product Market

Market Analysis

• Dynamic Capabilities

Masterful at marketing technologically-based products to consumers and developing features that people value

• Distinctive Capabilities

Best design team in the world

Delivering the best products by incorporating the design and delivery

Leading their customers instead of following them.

• Core Competencies

Design & Technology

• Mobile communication and media devices, personal computing products, and portable digital music players etc.

• Smartphones “iPhone’”

• Apple and Samsung alone have 45.5% of the market share of all mobile phones

• Potential

Phone market is predicted to increase by 7.3% year over year in 2013

More than 1.8 billion mobile phones will be shipped this year

Smartphones will represent virtually all of the mobile phone market in many of the world's most developed economies by the end of 2017

• Opportunities

Room for growth and improvement with regards to sales and market share in these emerging markets

Strategy Analysis & Formulation for Apple Inc.

Based on Jim Harvey's speech structures