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Apple Inc. Strategies

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Contents
Company Background.....................................................................................................................3
Product Offerings.............................................................................................................................3
Value to Customers..........................................................................................................................4
Functionality................................................................................................................................4
Convenience................................................................................................................................4
Customer Support........................................................................................................................5
Design and aesthetics...................................................................................................................5
Mission Statement...........................................................................................................................5
Code of Conduct..............................................................................................................................5
Strategies..........................................................................................................................................5
Design and User Experience Strategy.........................................................................................6
Innovation Strategy......................................................................................................................6
Vertical Integration......................................................................................................................6
Market Positioning...........................................................................................................................6
Competitive Environment................................................................................................................7
SWOT ANALYSIS.........................................................................................................................7
Strengths......................................................................................................................................7
Weaknesses..................................................................................................................................7
Opportunities...............................................................................................................................8
a) Qualified professionals.....................................................................................................8
b) Expansive distribution network........................................................................................8
c) Smart wearable technology...............................................................................................8
Utilization of artificial intelligence..........................................................................................8
Apple’s Threats............................................................................................................................8
Macro Environment Influence on Apple Inc...................................................................................9
Political Factors...........................................................................................................................9
Economic Factors........................................................................................................................9
Social Factors...............................................................................................................................9
Technological Factors..................................................................................................................9
Legal Factors...............................................................................................................................9
Environmental Factors...............................................................................................................10
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Micro Environment of Apple.........................................................................................................10

Porter’s Five forces........................................................................................................................10
The threat of new entrants.........................................................................................................10
Bargaining power of suppliers...................................................................................................10
Bargaining power of buyers.......................................................................................................10
Threat of Substitutes..................................................................................................................10
Competition...............................................................................................................................10
Ability to achieve Strategic Fit......................................................................................................11
References......................................................................................................................................12
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Company Background
Apple is a renowned multinational technology company founded by Ronald Wayne, Steve Jobs,
and Steve Wozniak in 1976. The company has its headquarters in Cupertino, California, United
States of America. Initially, Apple Inc. was known as Apple Computer Inc., and the change in
name in 2007 reflected the company’s need to expand beyond producing personal computers. At
its initiation, Apple Inc.'s first product was a personal computer known as Apple, and it was
hand-built by Steve Wozniak (O'Grady, 2009). Despite the continuous development of computer
products without success, Apple achieved its breakthrough via a personal computer known as
Macintosh in 1984. The development of the Macintosh revolutionized the computer industry
through its graphical user interface feature (O'Grady, 2009). In addition, Apple Inc. has grown to
dominate the personal devices industry by developing innovative products such as the iPhone,
iPad, Apple Watch, and MacBook computers. Apple Inc. introduced iPod in 2001, quickly
becoming a standard for portable music players with sales above 400 million units. In 2007,
Apple introduced iPhone products which revolutionized the mobile phone industry with its
unique app store, unique user interface, and quality touchscreen (Finkle & Mallin, 2010).
Furthermore, Apple, in 2010, noticed the continuous change in market trends towards tablets and
developed their first tablet known as iPad.
Additionally, Apple Inc. has been successful in the industry through its extensive focus on user
experience, market trends, design, and innovation. The development of groundbreaking products
with excellent features exhibits this. Also, Apple’s marketing approach and campaigns have
enhanced its growth in the industry. One of these campaigns is the iconic '1984' commercial
campaign, recognized as one of the best marketing campaigns ever (Finkle & Mallin, 2010).
Today, Apple Inc. is regarded as one of the world's largest and most influential technology
companies, with a market capitalization above $2 trillion. The company operates in 26 countries
and has over 100,000 employees across its outlets in the world. With increased technological
advancement, Apple is currently focusing on augmented reality, artificial intelligence, and
autonomous systems. The increased focus on artificial intelligence is evident from Apple’s
research projects, acquisitions, and product releases. For example, Apple acquired artificial
intelligence startups such as Perceptio and Turi.

Product Offerings
Apple Inc. offers a variety of highly developed products with unique designs and user interfaces.
These products are mainly:
i) iPhone- iPhone is a smartphone made up of different models designed to meet
consumer budgets and tastes. The iPhone has a user-friendly interface, powerful
hardware, and premium build quality.
ii) Mac- Apple began as a computer developing company and has since diversified into
other industries, such as the streaming industry (Mallin & Finkle, 2011). However, it
has continuously operated in the line of laptop computers and desktops. These
products include MacBook Air, Mac Pro, Mac mini, and iMac.
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iii) iPad – Apple designed iPad to meet different consumer tastes and needs. The iPad
comes in several sizes and offers versatile computing experiences (Mallin & Finkle,
2011).
iv) Apple TV- This is a media streaming player where users can watch various TV shows
and access other sites.
v) Apple watch- These are smartwatches that meet different consumer needs, such as
tracking their fitness and checking their body temperature and blood pressure.

Value to Customers
In the eyes of the consumer, the value of a product is determined by the level of satisfaction that
it provides. A product must have both tangible and intangible benefits in order for customers to
place a higher value on it. Time, the convenience of ownership, functionality, usefulness, and
place are all variables that consumers consider when determining if a product meets their needs.
In the case of Apple, its products are of high value to its customers due to its reputation for
design, quality, and innovation.

Functionality
The term "functionality" Is used in marketing to describe the actual, practical advantages that
customers may take away from a product (Johnson et al., 2012). These improvements include
increased longevity, convenience, and usability. In the case of Apple Inc., its products are
portrayed to have efficient functionality (Lu, 2022). For instance, iPhone is composed of
aluminum, a robust metal it adds utility value to customers. Because it does not rust like iron and
is resistant to wear and tear, the metal maintains its luster for a long time. IPhone battery, for
instance, is so efficient at retaining heat. The phone also has an A6 chip, which is speedier than
previous chips and consumes less battery life. The camera on the smartphone uses minimal
power, but the flash might potentially be somewhat power intensive (Lu, 2022). Due to its low
energy usage, the iPhone’s CPU, battery, and camera make it more durable. Customers may
switch between video, camera, and audio on the camera thanks to this function, which makes
using the camera more user-friendly.

Convenience
When customers obtain goods and services at the proper location and through the appropriate
channels, they have achieved place utility (Johnson et al., 2012). The location value of a
consumer is also boosted by product accessibility. Consumers have several reasons to value
portable Apple products. The Apple products such as iPhone and MacBook are sold by Apple at
all of its retail locations across the United States (Chen et al., 2023). Online retailers of
merchandise also offer iPhones for sale on their websites. Consumers can save money on
shipping by making purchases online.
Apple also ensures it achieves convenience by using distributors in several nations where its
products are offered on international marketplaces (Ayunda, 2022). In order to avoid consumers
having to travel great distances to obtain Apple products, distributors would stock the products in
local markets throughout different regions.
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Customer Support
Customers often feel valued when the company management offers excellent customer service.
In the case of Apple, it is known to offer excellent customer support by having sufficient
resources and personnel to assist consumers in resolving to troubleshoot issues (Ayunda, 2022).
As a result, the customer support offered creates reliability and trust of customers in the brand.

Design and aesthetics

Apple Inc. has invested heavily in the research and production of its products. Their products are
known to be of sleek design, which is highly valued by customers who appreciate aesthetics. For
instance, 70% of iPhone 13 pro users believe the iPhone design is unique and showcases class
(Ayunda, 2022).

Mission Statement
The mission statement of Apple is to use innovative hardware, services, and software to bring the
best user experience to its customers.

Code of Conduct
Apple is governed by a code of conduct, and these principles guiding Apple’s business practices
are:
 Respect – All stakeholders are supposed to be treated with the utmost respect.
 Honesty – All business activities should be done in an honest and ethical manner.
 Confidentiality – Customers and other stakeholders' information should be handled with
due care and confidentiality.
 Compliance – Ensure business operations are conducted in compliance with the law.
Besides, Apple has a supplier code of conduct that states the company's expectations on the
behavior of suppliers. These codes of conduct are:
 Labor and human rights – ensure Apple workers are treated equally, with respect, and
paid fair wages.
 Ethical sourcing- Apple expects its suppliers to source their raw materials in an ethical
and responsible manner.
 Environmental Sustainability- Apple expects its suppliers to have a negligible effect on
the environment.
 Health and Safety – Apple requires its suppliers to practice healthy and safe working
conditions.

Strategies
Apple Inc. is one of the largest firms in the electronics and devices industry by virtue of its
effective strategies. While the Apple Inc. name is renowned, it has established effective
strategies that have ensured its products have excelled in the market. These strategies include:
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Design and User Experience Strategy

When Apple Inc. was established, it set up a mission to ensure consumers have a better user
experience through using their products (Weinstein, 2022). The strong emphasis on user
experience and design has enabled Apple to invest heavily in designing aesthetically pleasing
products. Apple's strong focus on design has enabled it to cement a loyal customer base and
differentiate itself from its competitors and has resulted in Apple having a 27% global market
share (Apple Revenue | Statista, 2023).

Innovation Strategy
Apart from a strong focus on user experience, Apple has strongly adopted an innovation strategy
where they ensure their products meet the new innovations. Besides, Apple is renowned for its
culture of innovation, which solely focuses on developing products that meet consumer needs.
For example, iPhone was the new innovation of Apple in 2007 which is still regarded as one of
the best innovations. Also, Apple has continually budgeted for the research and development of
new products. For instance, in 2022, Apple Inc. spent $26 billion on research and development
(Apple Revenue | Statista, 2023).

Vertical Integration
Another strategy adopted by Apple is the vertical integration strategy, where the business
operations are expanded via acquisition or controlling businesses that are part of their
distribution chains. Vertical integration is beneficial to Apple because it enables it to control
different aspects of production, which increases efficiency. Some of the key areas Apple has
integrated a vertical integration strategy are hardware and software, retail integration, and supply
chain management (Weinstein, 2022). This is supported by Apple designing its hardware and
software components which means that the firm has full control of its production process. Full
control of Apple in their software components ensures their products perform seamlessly. For
example, Apple has full control of the iOS operating system of the iPhone, which has aided the
firm in maintaining a strong competitive advantage.
Besides, Apple owns and operates its stores which has enabled it to enhance its customers'
experience. The full control of Apple retail stores by the firm has ensured they fully train their
employees and ensure the stores are efficiently presented (Weinstein, 2022). Besides, Apple
practices vertical integration in its supply chain, where they have acquired firms that supply key
inputs to its development department. For example, Apple acquired Metaio in 2015, which
enabled Apple to integrate AR features into their products, such as ARkit featured in iOS.

Market Positioning
Apple has cemented a strong market position by ensuring its products are of sleek design and is
sold at deluxe prices. Apple's strong status in the market has ensured it continues to be the best in
the smartphone and computer industry. Some of the elements that have aided Apple to have a
strong market position are its cutie of innovation and brand credibility. Apple's culture of
innovation is evident via the products sold by Apple, and Apple continually encourages its
employees to think outside the box, which has necessitated its strong market share (Khan et al.,
2015). Also, the brand has differentiated itself from other firms by ensuring its products have
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unique features. For example, the iPhone product is known to have different features compared
to products sold in the market. Also, the high premium prices of Apple products have enabled the
firm to have a strong position in the market by encouraging the thought of exclusivity. Overall,
its market positioning strategy of Apple has enabled the firm to establish itself as one of the best
firms in the world.

Competitive Environment
Apple Inc. is a firm that specializes in the development of personal computers and phones. As of
2022, Apple controlled 27% of the market share in the computer and phone industries as a result
of their better products equipped with better user interfaces and unique designs. However, the
firm faces stiff competition from firms such as Samsung, Google, Microsoft, Amazon, and
Xiaomi. Samsung is a. leading competitor to Apple, and it offers a variety of products such as
tablets, smartphones, and other electronics (Chen et al., 2021). Also, in the computer sector,
Apple faces competition from Microsoft, which sells computers and windows operating systems.
Other key competitors include Huawei and Xiaomi, which are China-based companies and have
gained tremendous growth in the market, particularly in Asia to the Middle-class consumers.

SWOT ANALYSIS
Strengths
Apple is one of the most valuable brands in the world. According to Interbrand (2022), Apple
was valued at $408 billion, making it the most valuable brand in the world. Amazon and
Microsoft came in second and third with a brand worth $249 billion and $210 billion,
respectively (Chen et al., 2023). Also, Apple is known when it comes to high-end, user-
customizable laptops and other intelligent technological equipment, Apple is among the most
dependable brands, which has necessitated it to have millions of devoted customers. Thirdly,
iPhones, iPads, AirPods, and other products revolutionized the world, and Apple is still
committed to creating innovative, high-quality technologies (Chen et al., 2023). Besides, Apple
is a well-liked brand in business settings, especially among creative types. For all of your
business's technological needs, look no further than Apple. Professionals in the fields of graphic
design, animation, video production, and other creative endeavors favor Mac Pros and iMacs
because of their powerful processing capabilities. Lastly, Apple has devoted a lot of thought to
the aesthetics of its product designs (Singh, 2022). To comprehend client wants and market
developments, Apple conducts careful study and comprehensive research. For future growth and
competitive advantage, Apple continues to invest a significant amount of money in research and
development. For instance, Apple invests $26.25 billion (about 7% of revenue) annually in
research and development.

Weaknesses
Despite Apple products being highly functional and durable, these products are highly priced
and, in most cases, are considered luxurious goods. Apple products are only purchased by
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middle-class and high-income consumers Chen et al., 2023). Also, Apple has loyal customers,
which is a strength of its own. However, this has become a weakness for Apple, where they are
unable to advertise and promote their products. Apple practices limited advertising and
promotion compared to its competitors, such as Samsung, which might result in it losing its
competitive edge (Chen et al., 2021). Besides, Apple products such as iPhone are designed to
align with iOS systems and are unable to support other software. Lastly, Apple Inc. has been
accused of tracking their users' activities which have resulted in trust amongst consumers, which
results in poor profitability.

Opportunities
There are numerous opportunities that Apple Inc. can venture into. These opportunities are listed
below.
a) Qualified professionals
There is an increasing number of qualified professionals in the market and can be very useful to
Apple in the research and development of products.
b) Expansive distribution network
There is an opportunity for Apple to expand its distribution that is currently limited, affecting the
company's growth prospects.
c) Smart wearable technology
Smart wearable technology has significant potential to dominate the global markets. According
to Forbes (2021), the small wearable technology devices sales will likely triple in 2023, with
overb300 a million units being sold.
Utilization of artificial intelligence
With stunted growth in the market, Apple would venture into the artificial intelligence sector,
too, in reading its profit margins. Apple would utilize this space by acquiring various artificial
intelligence firms such as Regaind and DeskConnect (Singh, 2022).

Apple’s Threats
The covid-19 pandemic that occurred in 2020 led to adverse effects on Apple operations. The
firm strongly depended on China for its supply chain and manufacturing, and with recent
developments in the Covid-19 pandemic post, government measures have significantly disrupted
these operations (Chen et al., 2023). For instance, China contributes 19% of Apple's revenue, and
Covid-19 government measures will affect business operations in the coming years. The second
threat faced by Apple is the increased number of counterfeit products (Singh, 2022). The
counterfeit products have bullied Apple, where low-quality products are sold illegally, which
taints Apple's image, and as a result, the firm loses the trust of its consumers. Lastly, Apple faces
increased competition from competitors such as Samsung and Dell, which are continuously
advancing their product technology.
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Macro Environment Influence on Apple Inc.

Political Factors
Apple Inc. is a multinational company that produces and sells its products in many nations. As a
result, the company is required to comply with all laws and regulations set by the state in they
operate. These laws and regulations include data protection, taxation, and labor laws. However,
there have been instances Apple Inc. has been accused of violating the laws and regulations of a
country. For example, in 2020, the firm was sued for allegedly breaking the Sherman Antitrust
Act by limiting competition in its app store (Hiremath & Gupta, 2022). This alleged violation
had an adverse impact on the company’s reputation and tainted the company’s revenues.
Besides, political unrest in countries such as China could have adverse effects on Apple Inc.
mainly because the firm depends on low-cost manufacturing in China.

Economic Factors
These are factors that dictate the direction of the economy. In the case of Apple Inc., the firm has
significantly been impacted by economic factors such as inflation, economic growth, and
exchange rates. Also, the recent increase in labor costs in China has resulted in Apple’s
profitability shrinking significantly (Hiremath & Gupta, 2022). Lastly, the appreciation of the US
dollar against Asian currencies has made it difficult for Apple to do business in the market with
third parties in China.

Social Factors
Since Apple Inc. is a global brand, its products are used widely and its reputation is highly
dependent on the trends in society and societal reputation (Chen et al., 2021). For example, the
public demand for products they use is highly protective of their data and privacy, and as a
result, Apple has featured various applications such as the App Tracking Transparency app
(Hiremath & Gupta, 2022). These applications are key to Apple products because they detect and
limit cases of privacy breaches. Also, Apple fights social injustices and racism by developing a
program that will combat systematic injustices.

Technological Factors
Apple Inc. has a culture of innovation where the products it develops contains groundbreaking
technologies. These products include iPhone, MacBook, and iPad. The technological advance
nines of Apple has enabled the firm to establish a loyal customer base and strong brand. Other
technological features that Apple products have are voice recognition, face identification, and
find my iPhone, which has given it a strong competitive edge.

Legal Factors
For a brand to be successful and have a strong reputation in the market, it must operate within
the law and regulations governing a country. In the case of Apple, the firm has continually faced
legal challenges such as intellectual property allegations and Antitrust investigations. For
example, in 2020, Apple was sued for infringing wireless charging patents, which significantly
affected the company's financial performance and reputation. Another key example of legal
challenges faced by Apple is when it acquired illegal aid from Ireland and was sued to pay 13
billion euros by the European Union.
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Environmental Factors
One of Apple's goals is to ensure they meet environmental sustainability, such as being carbon
neutral by 2030. Other activities the firm is taking part in include developing energy-efficient
products, and as of 2020, the company announced that it had significantly reduced its carbon
footprint by 35% compared to 2015.

Micro Environment of Apple

Porter’s Five forces
The threat of new entrants
Despite the industry Apple operates in is highly competitive, Apple has an enormous market
share; it is highly reputable and has high capital, which makes it very difficult for new entrants to
establish a company. There are numerous challenges new entrants will face, such as competition,
high cost of development, and rigid regulations. Hence, there is a low threat of new entrants in
the industry; however, Apple should continuously investment in product development and
research to expand its market share.

Bargaining power of suppliers

Apple has adopted a vertical integration strategy which enables it to have strict quality control of
the products they acquire from suppliers (Ayunda, 2022). Apart from a strong strategy in place to
control product quality, Apple has a strong relationship with its suppliers which enables it to
leverage input prices. Hence, Apple enjoys the low bargaining power of suppliers.

Bargaining power of buyers

Apple has acquired a strong, loyal customer base mainly due to its strong reputation for
innovation and quality (Ayunda, 2022). Also, Apple products contain excellent features and are
of unique design, which gives the firm significant bargaining power over its buyers. However,
the switching costs of Apple products are low because prices are significantly similar or lower to
Apple products. Hence, it’s still concrete that the bargaining power of the consumers is
moderate.

Threat of Substitutes
The substitutes for Apple products are many and include Dell computers, Samsung computers,
and phones. In other words, there are numerous alternatives in the market for Apple products,
such as windows computers and Android phones (Weinstein, 2022). However, Apple only relies
on its loyal customer base, which aids it in mitigating the threat of substitutes. As a result, the
company faces a moderate threat of substitutes.

Competition
Apple operates in an industry that is highly competitive and faces competition from Samsung,
Amazon, Xiaomi, Google, Dell, and Hp computers (Chen et al., 2021). However, Apple has
mitigated the competition in the market by segmenting itself through having a unique product
design, effective user interface, and strong market share. Also, Apple has a strong reputation and
customer loyalty, which has enabled it to compete efficiently. Therefore, Apple faces high
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competition, and it needs to invest heavily in research and development to continually develop
products that capture customer attention and satisfaction.

Ability to achieve Strategic Fit

Apple revenues have increased by over 2.5% year-over-year and it is attributed to its ability to
achieve Strategic fit that aligns with its business operations (Chen et al., 2021). For example,
Apple adopted the design and user experience strategy, which ensured that their products were
highly differentiated in the market compared to competitors. The Apple product's user interface
is complemented by the product's ease of use and has resulted in the firm acquiring a loyal
customer base. Lastly, Apple integrated its software and hardware, which has allowed it to
optimize the user experience and boost its competitive advantage in the market.
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References
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%202004.

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AND EXTERNAL ENVIRONMENT OF APPLE INC. Marketing Journal.

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