History, background and market strategy of Apple Inc

Apple was formed by Steven Paul Jobs 21 and Stephen Gary Wozniak 25, they created a first Apple computer on 1st April 1976 named Apple I. Apple was incorporated in 1977 in California. For about 20 year Apple computers Inc was predominantly a manufacturer of personal computers that includes Power Mac, Apple I, Apple II, Apple III and Macintosh lines but also faced unstable sales and low market shares. In present Apple is one of the biggest technology company in the world, with the revenue of over $60 billion per annum.

OPERATIONAL AREAS (MAIN MARKET):

Apple is international business corporation creates users electronics, computer software, and trade servers. Its main sources of takings are from the iPhone, iPod and Mac product lines and their product sales in more than 50 countries, one of the most recent successful product of Apple is iPhone, Apple iPhones are making their production company to increase their yearly products because the of their extreme success and are selling it very well indeed and iPhones are increasing their market share day by day and quit fast. Apple has won the JD Powers and Associates Award for Smartphone consumer contentment three years in a row, and the iPhone 4 continues to achieve reputation with 3 million plus sales as of September 27th 2010.

The iPod invention line was what brought Apple into the Golden Years after Steve Jobs came back. Apple frequently updates the line that now has four kinds of iPods: the iPod Shuffle, iPod Nano, iPod Classic and iPod Touch. An other one of Apple’s biggest sellers is the iPad. The iPod Touch, iPhone and iPad run the iOS operating system. 

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1As the below graph shows, their main markets where they operates are USA, Japan, Germany, France, Spain, Canada and UK, over all they are doing very well in Europe and USA itself, besides that they are also in Mexico, Netherland, Sweden, Austria, Finland, Italy, Belgium, Portugal, Switzerland, Denmark, Ireland, New Zealand, Hong Kong and now in India as well. Success of iPhone is a great boom to Apple Inc

Apple iPhone Sales Graph

[Amit Bhawani, Information guide, Apple Inc, Smart Phone Launch, Vodafone]

STRATEGY AND IMPLEMENTATION:

Philosophy of identifiable product and simple design help Apple maintain their growth in early 80’s and a huge part of success is due to its leadership in the education sector, which was one of the brilliant business strategy, education environment provided Apple with a great amount of loyal users around the world. They started targeting into education sector in Cupertino California by a very important agreement between Steve Job and Jim Baroux of (LCSI) Logo Computer Systems Inc, which was an agreement to donate one Apple II and one Apple LOGO software package to every public school in Texas. The idea was great and the philosophy behind that was that if they donate one package to each school then this would result in thirty more packages to sell, which is estimated as the number of students in one classroom at least and ofcourse some more purchases are possible from parents who wants to support the technology to make their children to stay aware of technology, learn more and get familiar. This significant agreement between Apple Inc and Logo Computer System Inc (LCSI) was a great success though out the State, which establish a very strong and constant presence for Apple in the schools throughout California. This become Apple II’s era in schools right across the United States and the leadership of Apple in education sector around the world continues in the most critical time of 1980’s. Therefore Apple made it extremely well in education sector as well as in the families, as parents carry on supporting the learning experience for their children after school .

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TECHNOLOGY USED AND PRODUCT/SERVICES:

Apple Inc mainly deal with consumer electronics, computer software and commercial servers. Apple is an example of itself when comes to technology, the technology they introduce since they first launched and until today. Although there was issues in some software they introduced as well as their Operating system that it is not users friendly but Apple keep identifying the issue efficiently and effectively, for example using Microsoft’s Power point compare to Apple’s keynote which takes PowerPoint apart and figures out how the files work that makes it more user friendly. They are famous to introduce the best touch sensor in their products which includes Mac, iPhone, iPod and iPad recently, best example is iPhone which is still the leader in smart phone technology and introduced the best touch screen system in the market so far [Bill Thompson, 19th Sep 2007, BBC News].

MAIN PRODUCTS:

Apple’s worldwide smartphone shares boost upto 17% due to iPhone sales reached 7 million in 2009 including the continued version of iPhone 3GS and they are expected to be more because later in the same year they started selling iPhones in China, where as Chinese made a copy version of iPhone with different software but unable to beat the original one.

http://images.macrumors.com/article/2009/11/12/104330-gartner_3Q09_smartphones.png

[Website Mac Rumours, News, Smartphone Market Worldwide]

Worldwide mobile phone market experienced less growth as compare to their early years and in this year the growth was as low as 0.1 percent but smartphones was continuously growing their success and performance and growing their market upto 12.8 percent nearly every year.

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CORPORATE CHANGE:

STEPPING INTO STOCK MARKET

Under leadership of John Sculley, Apple issued its first corporate stock dividend on May 11, 1987. A month later on June 16, Apple stock split for the first time in a 2:1 split. Apple kept a quarterly dividend with about 0.3% yield until November 21, 1995., August 2010 Between March 1988 and January 1989, Apple undertook five acquisitions, including software companies Network Innovations, Styleware, Nashoba Systems, and Coral Software, as well as satellite communications company Orion Network Systems.

Apple website, http://www.comparison.com/us/45322.htm (Retrieved 13th November 2010).

DEAL BETWEEN JOBS & GATES

At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with Microsoft. Included in this was a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well a US$150 million invesment in Apple. Microsoft chairman Bill Gates appeared at the expo on-screen, further explaining Microsoft’s plans for the software they were developing for Mac, and stating that he was very excited to be helping Apple return to success.

STORES & OUTLETS:

4Initially, the Apple Stores were only opened in the United States, but in late 2003, Apple opened its first Apple Store abroad in Tokyo. Recent additions in the London area include the Brent Cross Apple Store (January 2006) and the Apple Store in Westfield in Shepherd’s Bush (September 2008) also in an effort to court a broader market Apple opened several “mini” stores in October 2004 in attempt to capture markets where demand does not necessarily dictate a full scale store. The first of these stores was opened at Stanford Shopping Center in Palo Alto, California. These stores follow in the footsteps of the successful Apple products: iPod mini and Macmini.

The stores were designed for two primary purposes: to stem the tide of Apple’s declining share of the computer market, as well as a response to poor marketing of Apple products at third-party retail outlets.

The Apple logo in 1977 created by Rob Janoff with the rainbow color theme used until 1998.

The very first Apple Computer logo, drawn byRonald Wayne, depicts Isaac Newton under an apple tree.http://upload.wikimedia.org/wikipedia/commons/thumb/e/ef/Apple_Computer_Logo_rainbow.png/150px-Apple_Computer_Logo_rainbow.pnghttp://upload.wikimedia.org/wikipedia/commons/thumb/f/fa/Apple_first_logo.png/150px-Apple_first_logo.png

The Latest One

Self

ETHICAL CHALLENGES:

LEADERSHIP & GOVERNANCE:

Steven Jobs returned in 1996 as a CEO of the company. He brought with him a new corporate philosophy of identifiable product and simple design. Introducing a great success of iPod music player in 2001, Apple become a leader in consumer electronic industry, dropping ”computer” from its name and keeping on to release the iPad and iPhone.

After an internal power struggle between Steve Jobs and the new CEO John Sculley in 1985, Apple’s board of directors sided with Sculley and Jobs was asked to resign. Jobs then co-founded the visual effects house, Pixar. He also went on to found NeXT Inc., a computer company that built machines with futuristic designs and ran the UNIX-derived NeXTstep operating system.

In 1996, the struggling NeXT company beat out Be Inc.’s BeOS in its bid to sell its operating system to Apple. Apple purchased Steve Jobs’ company, NeXT on December 10, 1996, and its NeXTstep operating system. This would not only bring Steve Jobs back to Apple’s management, but NeXT technology would become the foundation of the Mac OS X operating system.

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QUALITY & CUSTOMER CARE:

Quality & Customer Care plays important role in company’s business success especially when come to competition. There has been criticism on iPhone and iPod that these devices has been locked/restricted into iTunes and creating iTunes Store monopoly but Apple keep ensuring that anyone but their product will be completely locked/restricted to an Apple’s created world. This portfolio keep the other competitors out in some aspects but is also become hard to justify some measures when creating a circle around the customers and keep competitors out. Although the fact that iTunes database format has already been cracked and the third party tool have been updated, example application like Cydia which unlock iPhone and enable customers to download various applications and allow them to use their iPhone for all the network providers. But Apple is spending more time trying to ensure that anyone who purchase their product must completely locked in to Apple-centred world in which they use iTunes for products like iPod and iPhone, buy from iTunes Music store, and purchase only Apple-certified accessories. The new version of iTunes break the fix and they keep updating the versions of iPhone and iPod to lock the customers and other updated and therefore no third party tool is able to unlock the version unless it is certified by Apple itself.

SOCIAL WELFARE OF EMPLOYEES:

As nowadays all the multinational companies are seriously considering the worth of their employees in the growth of the company. It is common that employees of multinational organization complains of their workload but Apple considers not only their Work-Life balance but good remuneration packages including taking care of their employees and provide them various facilities and benefits that includes, staff discount, paid holidays, maternity leaves, annual bonus and friendly and learning environment.

Work Environment:

To provide best work place & environment so the employee do their job in the better atmosphere and can get best output for the Apple.

Job Security

6Apple always restrict to their rules and one of the rules that they never hire employees on contractual or temporary basis they always hire them on permanent basis and to do that the employees need to pass written exam and subsequent interviews. After this process they get confirmation of their job as a permanent employee which give them assurance and safety of their job and they do the job without pressure of losing the job.

Recognition:

Apple always consider the individual for their exceptional work and give them certificate of excellence and well deserved promotions and if required they help to finance employees for further studies and help to develop career of their employees.

EXAMPLE OF CORPORATE CHANGE

Consumer product strategists frequently ask Forrester how Apple’s product strategy will evolve: What will Apple’s product portfolio look like five years from now, and how is Apple preparing for that future today? Forrester notes that Apple has completely remade itself from a PC maker to a consumer devices and digital music leader over the past eight years – thus setting the precedent for additional radical change over the next five years.

While there are a number of speculative industry hypotheses for the future of Apple including scenarios like Apple as a media pure play or Apple as the “American Sony” Forrester sees a future that ties together many of these hypotheses into a coherent consumer product strategy:

Apple will aim to become the hub of the digital home, offering eight key products and services to connect PCs and digital content to the HDTV-stereo audio-visual infrastructure in consumers’ homes. To fulfill this strategy, we predict that Apple will launch new products, re-engineer the Apple Store, and expand into in-home installation services.

COMPARE BETWEEN REACTIVE

VS STRATEGIC REASON FOR CHANGE:

Reactive efforts to increase the performance of laggard suppliers, and (2) strategic efforts to increase the capabilities of the supply base to enhance the buying firm’s long-term competitive advantage. Strategic efforts were found to significantly increase the buying company’s involvement in suppliers’ processes, and required greater dedication of resources, personnel and communication.

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CONCLUSION:

Apple is the largest commercial consumer electronics manufacturers and doing business in different sectors. It has a good reputation in computers & mobile phone manufacturing industry and well brand name.

It has been seen that many other cell phone manufacturers are becoming part of the world economy since last 10 years and providing best services to penetrate into market and to cut off customers from other companies which is the threat for existing ones.

Although Apple has a good proportion of customer and a strong history in communication sector but new companies which are dominating market very quickly with innovative customer services and technology are capturing customers very rapidly.

Apple has to take sensible and quick decisions to increase its services and technology to overcome its weakness and to develop its customer trust and loyalty to get competitive advantage and to stay long in industry.