University of Immaculate Concepcion

Bonifacio Street, Davao City

BA213 Marketing Management

Case Analysis

Maritess L. Munoz Melecio Sy , DBM, CAR

Case 1 : Apple’s Winning Marketing Strategy

1. Introduction
Apple Company was founded in April 1, 1976 in which the first product
the Apple 1, the computer kit and headquartered in Cufortino, California Usa.
The company engages in the design, manufacturer and sale of smartphones,
personal computers, tablets wearable and accessories and other variety of
related services. In order to boost their new business, they decided to
incorporate a new partner who was more experienced for them to attract
venture capital. The aim of these two entrepreneurs was to introduce into the
market a computer that was easy to use and they came up with Apple II in
1978. There endeavours led to a complete revolution in the PC industry raising
the sales to 1$ billion in less than three years.

The company became one of the most successful dealers in computers

with high sales until they launched their IPO in 1980. However, the company
started experiencing problems with its sales falling in the recent years. This
problem is compounded by the entry of other players in the PC market such as
windows 7 which started pushing Apple further (Yoffie and Kim 2). This essay
will discuss some of the problems Apple has been facing and how they could
possibly be solved. In 1997 Steve Jobs restore the company and instituted major
changes for apple. The company expanded into the electronics industry and
began to release innovative products.

Apple is one of the leading and most innovative electronic and software
companies in the world today. The company name is behind great products like
Macs, iPods , iPads, iPhones, and plethora of software. Apple is popularly known
as an innovator in the personal computer and electronics, market. Even though
Apple experiences great competition from its rivals, the company capitalizes on
its core competencies to stay ahead of its competitors. Apple design and
develops its own operating system and hardware unlike like its competitors
including Samsung and Motorola, who use Google’s operating system known as
Android.

Mission – Apple is committed to bringing the best personal computing

experiences to students, educators, creative professional, and consumers
globally through innovative hardware, software and internet offering.

Vision – Apple is committed in producing high quality products and providing

high quality service thus setting high industry standard for other competitors.

Objective – company’s objectives is to increase sales, to produce products that

offer service and satisfaction to customer and to take the lead in the mobile
market.

II - TOOLS

2. (SWOT Analysis)

Weakness Opportunities Threats

Strength
 Price  Developing a  Increasing
 Customer Loyalty new scope competition
 Incompatibility  Good  Supply
 Brand Reputation to other reputation interrupted
mobile for high due to
phone/third quality corona virus
party device product outbreak
and
accessories
 Defects of new  Technological  lawsuits
 Financial product advancement
Performance
 Best Innovators in  Product
mobile technology limitation
 Rapid
 Strong Marketing technological
Team change

Apple Inc. Is measured to be the most booming electronic company in the world today,
this is so because of its strengths and outstanding products performance, customer loyalty,
strong financial performance, brand reputation leading innovators and strong
marketing/advertising team.

STRENGHTH:

Customer loyalty

When countless number of customers sleeps outside a store to buy a product it’s
obvious that Apple Inc. has a strong customer and product loyalty. Apple’s products are highly
user friendly and attractive. This amazing prospect gives Apple high customer loyalty and high
customer satisfactory rate.

Brand reputation

Basically Apple products have the same well design architectural interface and excellent
product performance which makes customers adapt easily, this function gives customers a
pretty good idea of the products they are about to purchase. In the year 2012, Apple brand is
appreciated to $76.5 billion USD and considered to be the second most valuable brand in the
world.

Financial performance

In terms of financial performance, Apple is considering to be one of the best in the

world. At the end of 2012 the company hold $10,000,000,000 liquid cash with a gross profit of
43.9% and zero dept.

Best Innovators in mobile technology

Over the years Apple has been considered the most innovators in mobile sector; in 2012
it has been chosen to be the best leading mobile innovator for the third time. Apple’s strategic
innovation motive is aligned with the need of consumers and to bring something unique to the
market.

Strong Marketing and Advertising Teams:

Apple has a strong marketing and advertising team, which help in standing them out
among their competitors. Apple use less-is-better (built to achieve) marketing strategy and
advert their products in a more persuasive and appealing style.

Weakness:

Although Apple Inc. Have several strengths but on the other hand it also has some key
weakness within the product and in the market as well which will be discussed in explicit
below.

Price:

Apple products are considered to be expensive compared to the service and quality
provided by the products. Taking one of their products into consideration, iPhone, one has to
put into concern about the price compare to other competitive products by other companies.
Take Sony for instance, they provide almost the same service and quality of product but Apple’s
is relatively more expensive. This can easily make some of their customers to go for other
alternatives at lower price. Furthermore, looking at the profitability ratio analysis its clear that
apple products and services prices is relatively higher that the production cost with more than
40% which is very rare in other competitive companies, this is becoming alarming and
customers are gradually realizing the to the potentials in other relevant products of the
competitors.

Incompatibility:

Complains are alarming of Apple Inc. regarding the different apps on mobile phones.
Map play stores and other features related to internet are assumed not compatible with and to
other device. A key issue in Apple as a company is that many of its products are incompatible
with third-party software / accessories. So overall, when you buy a product of Apple, you enter
the Apple universe and you have to continue with Apple only. That makes a huge impact on
consumer decision making.

Defect of new products:

This is not current Apple weakness but one that jumps out of time. Some of Apple’s iPod
and iPhone release had clear faults and thus disturbed sales of the products and firm’s
reputation of superior product performance.

Opportunities:

Apple Inc. uses it price weakness in developing a new scope of opportunity, the
company in its recent innovation of iPhone5 produced iPhone5c along with a lower price, both
of this phone have the same futures and functions only that the c is relatively slower and
cheaper. These prices difference make a tremendous impacts to the sales of this products in
the third world countries, this decision is carried along as part of the late founding wishes to
create a brand loyalty in the developing countries and also among the younger generation.

Good Reputation

Has a well-deserved reputation for high-quality products that work smoothly. New
products are generally well-received and have a built-in purchasing base.

Technological advancement

In the technology industry, technological advancement is always an opportunity. And

the one brand we can expect to leverage technology to its best is Apple. We can expect even
more advanced MacBook’s, Iphones, Ipads and Iwatches in the coming years.

Threats:

 Increasing competition
 Supply interrupted due to corona virus outbreak globally
 Lawsuits
 Product limitation
 Market Penetrations

Market penetration in Smartphones – One of the key threats to Apple is the market
penetration by other brands in the Smartphone market. Android is eating market share like
anything and currently has 47.5% of the market share whereas IPhone is at 42% market share.
Android is being used by Samsung, HTC, Lenovo and practically everyone who wants to enter
the smart phone market. Naturally Android being of Google (2nd most valued brand), Apple has
to be ready for Smartphone competition.

Laptop competition – MacBook is obviously the best there is. But so is Dell, and so is Sony
and so is Lenovo. The competition is ever-increasing in the laptop segments. Dell has
introduced some beautiful models over the years including the Alien ware model. So, although
Apple as a brand is loved by everyone, MacBook is facing stiff competition from other brands as
well.

III – Problem ideation

4. Statement of the Problem (SOP)

One of the most serious problems that Apple Inc. is facing and which to a large extent
contribute to the occasional failures of the company is a marketing problem due to stiff
competition in the industry. Initially, Apple was dealing with Macintosh computers when it
started facing stiff competition from other PC manufacturers such as IBM. Later on, Apple
decided to shift from PC industry into mobile phone industry.

5. Identify Decision Criteria

Criteria Percentage
Price 30%
Innovation 30%
Competitors 20%
Supply Chain 20%
6. Identify 3 strategic Alternatives

Alternatives Advantages Disadvantages

1.Conduct and continued market High quality of the brand Time and effort may not yield
research and identify what the and good marketing a return
customers require in order to performance
satisfy them.
2 . Observing the rivals Aware current updates of Time Consuming
competitors
3 . Improve marketing Increased cost
advertisement Promote customer
awareness of the product

7. Make a decision table

Alternatives Decision Criteria Total

1 2 3 4
1 30 29 20 18 97
2 30 30 20 19 99
3 28 26 17 17 88

IV – Solution

8. What is the best alternative?

Through proper knowledge of what the customers need and the strategies being used
by the competitors, the company will be able to apply the requisite innovativeness in coming
bringing into the market new products. The company should also strife to invest a lot in its
distribution strategies to ensure that the competitors do not take advantage of its poor
distribution strategies.

This is the one that scares Apple’s competitors the most. While those competing with
Apple are just getting products to market that are competitive, Apple is already working on the
products at least two years out. For example, 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. The same goes for the iPad. The new iPad that we will
most likely see next March was signed off on two years ago. The one that’s being worked on
now we will probably see in 2021. This is a nightmare for Apple’s competitors and will continue
to be for some time.