What is apple strategy

Understanding Apple Business Strategy

Based in Cupertino, California, Apple is an American multinational company that designs and sells consumer electronics, software, and services. Apple’s iPhones helped spark the dawn of the smartphone-era and have revolutionized the way the world sees phones.

Apple’s business strategy, though simple, holds up to date and has played a major role in helping Apple become the first-ever company to reach the trillion-dollar valuation.

Apple’s business strategy can be easily understood by knowing the type of products and services they provide.

The Business of Apple

Apple was founded on 1 April 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, and bought innovation to the table in form of their rendition of what a personal computer should look like with the Apple I.

Apple continued producing quality and perfectly engineered products, with an emphasis on design and aesthetics. Apple primarily made desktop systems and hardware accessories related to it for a while and soon diversified into making other consumer electronics such as laptops, PDAs, music players and such.

Their first major success of the new millennium was the iPod – which wholly embraced all of Apple’s design philosophy and set stage for its future products. The revolutionary iPhone was launched in 2007. With resounding success, Apple once again redefined the public’s perception of the smartphone.

To put it in short, Apple has brought about –

• The revolution of the PC industry
• Introduced mouse and graphical user interface to consumer products
• Innovated the music player
• Launched the smartphone revolution
• Bringing innovating technologies that set trends for the rest of the industry

Here are all the products and online services that Apple currently provides –

• iPhone
• iPad
• Macintosh
• Apple TV
• Apple Watch
• AirPods
• HomePod
• iPod
• Beats products
• Apple-branded and third-party accessories

• Digital Content
• iTunes Store
• App Store
• Apple Arcade
• Mac App Store
• Book Store
• Apple Music
• iCloud
• AppleCare
• Apple Pay

Apple is among the leading electronics manufacturers in the world with profit margins and revenues that put most major businesses to shame. Apple became the first “tech” company to reach a trillion-dollar market capitalization value in August 2017.

There are only five other companies to have made it to the trillion-dollar list, which brings us to –

What is Apple’s business strategy that has led them to become such a successful company?

Let’s find out the operational tactics of Apple which have helped them list as one of the market leaders in the technology and electronics industry.

Apple Business Strategy

Apple Ecosystem

Apple has always designed, developed and manufactured its hardware and software in-house. This innate advantage helps them create a deeper level of integration between its hardware and software – between for all of its devices.

Here’s an example –

Say, you buy an iPhone. You soon start using a few of its online services such as iCloud for storage. Herein lies its brilliance – the hardware, software, and services on the iPhone are so well designed and intuitive to use that you soon fully embrace it. Once you do, it leads you to create a good image and also only the rest of Apple devices can use the services.

This makes you buy their laptops and other hardware that plays well with one another. This extends to their accessories as well – the recent line of iPhones have removed the headphone jack which makes people buy more of Apple’s wireless AirPods earphones.

This strategy has helped Apple create an environment or “ecosystem” that offers a consistent and great experience to its users.

Customer Relation

Apple has always made a major point in providing stellar customer service and has been able to facilitate this with its AppleCare service and by employing knowledgeable sales and service personnel to cater to the customers in need.

This has helped Apple set itself apart from the rest of the competition in terms of customer relations and support, increasing its brand loyalty. Apple has made it a point focus on providing the best quality of service to its consumers and this has reflected in the increased chance of customer sticking with Apple.

Apple also builds upon this with their purpose-built Apple Stores, which are mostly situated at prime locations, allowing customers to experience Apple products before making the purchase.

The Apple Stores also help have much finer control over the customer experience and apart from showcasing Apple products and devices, Apple Stores double up as service centres.

Form Over Function

One of Apple’s main strategies when it comes to product development lies in its ability to provide well-designed products and services – with emphasis on minimalism, clean lines, and solid tones.

But it can also be said that Apple has made it a point to focus on design and aesthetics over performance when possible.

The recent Macbook (laptop) lineup is a great example of this. Apple has sacrificed heat dissipation capabilities and has included a thinner keyboard – which is riddled with issues such as not working in case slightest of dust getting in between the keys – all in the pursuit of maintaining a thin and sleek design.

But this strategy has still worked out fine and in favour of Apple. The average consumer mostly prefers thinner and quieter laptops.

Brand Differentiation

Apple’s brand and marketing strategy have always made it a point to promote itself as a luxury brand while focusing on differentiating itself from its competitors. Apple makes sure that it puts forth the following brand-image – Apple competes against itself and not against others. This helps Apple in achieving its desired brand-image and recognition.

Consumers anyway tend to presume this is because Apple has built its reputation as a manufacturer of well-built premium products.

Customer Privacy

Apple has always made it clear that it values customer privacy and has shown to handle its customer’s data much better than the rest of its competitors.

During CES 2020, Apple’s senior director for global privacy mentioned Apple’s take on privacy as –

• Minimize the amount of personal data collected from its users.
• Providing highly secured cloud storage (iCloud)
• Providing tools for users to be able to maintain their privacy

Final Thoughts

Apple’s main strategies are as follows –

Apple uses product development and market penetration as its main intensive strategy for growth.

Apple’s product development revolves around creating clean and premium products that are quite timeless and appeal to a wider audience while their market penetration strategy can be summed up as distinguishing themselves from the rest of the competition, providing an air of distinction and recognition for their products.

Their exceptional customer support and the seamless integration between their products are icing on the cake which helps Apple firmly hold its place as one of the market leaders in the technology and consumer electronics industry.

Go On, Tell Us What You Think!

Did we miss something? Come on! Tell us what you think about our article on Apple Business Strategy in the comments section.

Started out to become a developer but felt at home in the home of startups. The journey started from a single novel. Been an entrepreneur since schooling days. Interested in coding, reading and movies.

Источник

Apple’s Business Strategy: What Your Company Can Learn

This article is part of our Business Strategies series, an insight and analysis into the makeup and model of some of the world’s most successful startups.

One of the most iconic brands of the 21st century, Apple is a technology and consumer phenomenon. With a global legion of fiercely loyal customers, an almost cult-like employee devotion to its leadership, and a legacy of innovation, it is a case study in branding, growth and masterful marketing.

To find out how it has gone from a California driveway to one of tech’s ‘big four’, we’re taking a closer look at Apple’s business strategy, as well as all the other significant factors that have driven its success — and what you, as a business owner, can learn from them.

Vital Information

Apple’s corporate strategy – one of creativity, innovation, and the pursuit of excellence – can be summarised in its mission and vision statements:

Apple is dedicated to the empowerment of man—to making personal computing accessible to each and every individual so as to help change the way we think, work, learn, and communicate.

Apple Mission Statement (Original)

Man is the true creator of change in this world. As such, he should be above systems and structures, and not subordinate to them.

Apple Vision Statement

Key Details

felixtm / Deposit Photos

• Founded: April 1976
• Founder(s): Steve Jobs, Steve Wozniak, and Ronald Wayne
• Headquarters: Cupertino, California, USA
• Current CEO: Tim Cook
• Global Employees: 132,000 (2018)
• Type: Public (floated December 1980)
• Initial Funding: $250k angel investment (Mike Markkula, 1977)
• Key Products: iPhone, Macintosh, iPad, iPod

Apple’s Business Strategy

While the sale of consumer tech products has been Apple’s modus operandi since 2003, the crux of its commercial success lies in its forced marriage of hardware with software. If you buy an iPod, for instance, then you need to download, install and subscribe to iTunes, while if you want to use the revolutionary Apple Pay service at a checkout, then, yes, you guessed it: you need to buy an Apple Watch, iPhone or iPad.

This practice – dubbed «owning the consumer» by University of Manchester academics in a 2013 paper – is nothing new of course; after all, people were buying Windows-operated machines for the sole purpose of using Microsoft Excel as far back as the late 1980s. However, no other company has employed or implemented this strategy as effectively as Apple, before or since.

Starting Business

As you can see below, iPhones still make up the core bulk of the company’s unit sales, although the market maturity of smartphones has somewhat stunted growth in this area; moving forward, this is arguably the next big growth challenge for CEO Tim Cook, who has already sought to appease investors by acknowledging the plateau.

Apple Net Sales by Unit for the Period Sep 2018 to Jun 2019:

Apple, 2019
Value

In terms of value, meanwhile, Apple’s is unique. Its product upgrades are heralded almost fanatically by loyal consumers, regardless of the actual levels of innovation involved in their design, yet this is what has set Apple apart since its «rebirth» in 2003: brand status.

Essentially, Apple devices are as much consumer accessories as they are mobile telephones or computers. Through a combination of the legendary marketing techniques employed by Steve Jobs, and the unique design and usability features implemented by Apple’s engineers, its products have long since exceeded mere functionality.

As already mentioned, there is enormous value in Apple’s software and services, too. Consumers may buy iPhones en masse because of their sleek and revolutionary design, but this hardware is just a gateway to what really hooks them in: platform-exclusive programmes, such as the App Store, iMessage and FaceTime.

Partners

As part of its business model, Apple also needs to maintain solid relationships with key partners – particularly its manufacturers. Given the number of units it sells per year, this has inevitably lead to issues with contractors, with accusations from critics of poor labour and environmental practices.

The company also needs to forge productive relationships with telecommunication providers around the world to gain access to telephone and internet data networks, while indirectly, it relies on publishers, content creators and app developers to populate its software services, such as iTunes, the App Store and its other digital content providers.

Key Figures

Apple’s entire culture is linked intrinsically to its leadership or, more specifically, to that of its co-founder and legendary former CEO, Steve Jobs, who was responsible for much of the company’s marketing bluster and creative vision in the late 1990s and early 2000s.

CEO: Tim Cook (2009, 2011-Present)

Although it’s difficult to pinpoint an exact management style for Apple’s current CEO, it’s fair to say that he shares few similarities with the predecessor who appointed him. Although Cook does possess elements of Jobs’ autocratic streak (as evidenced by his dismissal of several senior executives following a disappointing fiscal return in 2013), it’s unfair to describe him as a visionary.

Instead, Cook’s style is more democratic; he is far more hands-off in terms of product development, preferring instead to cultivate a more cooperative culture at the company. This approach is undoubtedly favoured by Apple employees, who rate him as one of the top CEOs in the world.

COO: Jeff Williams (2015-Present)

Having followed a similar career trajectory as Cook, Jeff Williams has been Apple’s COO since December 2015; he is considered a highly influential figure within product design – the heart of Apple’s core business – especially since the departure of long-time design guru Jony Ive (the man responsible for Apple’s iconic minimalist designs) in 2019.

Apple’s Branding Strategy

As previously mentioned, Apple has enormous brand value – the largest in the world, in fact.

Forbes, 2019
This success is built upon several factors, such as the company’s perceived value when compared to competitors, but the critical ingredient is Apple’s «think different» mantra. The exclusivity of their product launches is more akin to a luxury brand, for instance, while users develop an emotional attachment to the brand that is almost unprecedented; this has resulted in a consumer environment where people are not buying Apple products because they are the best on the market – they are buying them simply because they are Apple.

Competition

For much of the 1970s and 1980s, Apple’s primary competitor was, of course, Microsoft, with the rivalry very much driven by the personalities of Jobs and Microsoft founder Bill Gates. Despite what CIO refers to as «hot and cold periods» in their willingness to collaborate, Apple’s modern-day approach to its competition is more definitive: it’s open for business – or at least when it comes to technology.

In terms of consumer goods, Apple famously dethroned the hitherto undisputed king of mobile phones, Nokia, with the advent of the iPhone in 2007, although it now appears to be losing ground to its main competitors, Samsung and, increasingly Huawei.

On the services front, things aren’t so cosy, either; Apple, as with all established firms, faces new and different challenges, such as from the music streaming app, Spotify (although, at the time of writing, Apple is seemingly giving way to Spotify’s demands to be accessed through the Siri voice technology, despite previously refusing to do so).

Apple’s Company Culture

As an enterprise that is almost entirely reliant upon the technical and artistic vision of its employees, Apple has sought to create an environment that, in line with its mission and vision statements, is all about innovation; as Jobs himself once remarked, the company doesn’t hire people to tell them what to do, but rather «hire(s) smart people, so they can tell us what to do».

Cook is clearly attuned to this mantra, preferring to manage the experts rather than instruct them, but all employees must buy into the organisational culture of the company. Secrecy is one such characteristic, with the company seeking to maintain its competitive edge by protecting its intellectual properties.

Ultimately, Apple’s growth and success are attributable to two things: vision and branding. From the Apple II computer in the 1970s to the iPod and the iPhone in the early 2000s, the company has been able to identify where the next significant technological shift is going to occur — and then capitalise on it. In Apple’s case, this can be credited to the company’s leadership – particularly under Steve Jobs and Steve Wozniak.

Apple also represents a masterclass in branding. It can be (and regularly is) argued whether or not the iPhone is the best in class from a functional and technological perspective, but the bottom line is that it doesn’t matter: Apple has cultivated an almost fanatically loyal consumer base through the power of its brand, which is a lesson in itself for entrepreneurs who doubt the importance of a brand strategy.

Key Takeaways:

• Find the Right Investor – Not only did Mike Markkula have the funding, but he had a technical background, enabling trust and understanding between himself, Wozniak and Jobs. Find a funding source that aligns with your goals in the long term.
• «Own» the Consumer – Don’t just sell a product; sell around it, too, whether it’s accessories, subscriptions or software.
• Create a Brand Strategy – Good branding and a loyal customer base are invaluable assets.
• Build Strong Relationships – If your product requires B2B interactions, ensure that you are building strong and robust relationships with your partners.
• Understand Your Business – Whether you are driving its vision or enabling others with the requisite abilities to do so, know/blog/business-strategy-apple what is best for the business – not for you.

For similar insights, don’t forget to take a look at our breakdowns of Netflix and Uber’s business strategies, either!

What other vital lessons can we learn from Apple’s business strategy? Let us know your thoughts in the comments below.

Источник