Apple, Inc. Incorporation is one of the largest organizations dealing into Information Technology. Apple, Inc. has a host of products ranging from Laptops, Desktops, Mobile Phones and Multimedia Devices. The company has been extremely innovative in the field of multimedia and it owes it success to one of the greatest innovators, Steve Jobs. The company has always believed in innovation and that is the major reason why it has been so successful in the mobile phone segment. In recent years Apple, Inc. is second only to Samsung in the Global Mobile Phone industry. However the operations have been largely based in the United States and in times of recession any organization needs to focus on economies of scale and thus focus on growth opportunities like Diversification and Market Development. This report will illustrate new market entry strategies for Apple, Inc. for entering Australia.
Marketing strategies are based on the 4 P’s or Product, Price, Promotion and Place or Distribution Channel. This section will briefly look into the Product and Pricing strategy of Apple, Inc. and will illustrate various factors how it has been capable of sustaining competitive advantages in times of extreme competition. The product constitutes of two major aspects which are tangible and intangible in nature. The tangible part is the product and the packaging and the intangible part constitutes of factors like installation services, warranties, credit etc. In case of Apple, Inc. Products the tangible part or the product and the packaging are best in class. Apple, Inc. is into deep market research and considers the varying taste of the consumer and designs and innovate the products accordingly. The iPhones or the IPODS are designed to be sleek and have functionalities that are best in class. The major target of the company has been to elevate the customer experience and thus it has ensured high customer satisfaction and brand loyalty (Aaker, 2010). It has been evidenced that Mac Users would never prefer to shift to any other brand and so is true for I Phone users. The intangible aspects like after sales support and warranties are also best in class for the products and thus the user experience has been always very high.
The product can be further categorized into three areas which are: Core: In this category the benefits or the service of the product is analyzed. The products that Apple, Inc. offers are high on service quality. Apple, Inc. invests heavily into Research and Development and thus the services are of high quality. For any product or service there is a product life cycle in which there is a decline phase. The following figure illustrates the product life cycle for any product (Baker, 2007) .With Apple, Inc. the Growth has been substantial and it can be stated that the Products have reached a maturity stage and hence there is a chance of decline. This has also been evidenced to certain extent as Samsung has taken over as the market leader in the mobile phone segment. The emergence of cheaper brands like Lenovo etc. has also been a challenge for IT products of Apple, Inc. However it is also true that Apple, Inc. has always focused on consumer trends and demands and thus has been capable of avoiding the decline stages. Further market development and diversification strategies have been suitably implemented by Apple, Inc. to ensure that there are no major collapses (Graham, 2008). In the case of Apple, Inc. it has been extremely successful in market penetration and product development. However it is also true that the organization has majorly focused on the US market and hence there are opportunities for market development and diversification strategies. This report is mainly based on International entry and hence the diversification strategy is most significant. The organization needs to classify its products and services based on the Australian Market. The consumer needs and consumer preferences will be different and hence the company needs to focus on the trends in the specific country and also focus on the socio-cultural aspects to design and innovative products for this market (Kohtler, 2009).
In the next level of product categorization the points that are focused on are the brand name, quality, style, features and packaging. For an organization like Apple, Inc. brand name is very high and so is the brand value. With brand name and brand value is the Perceived User Value of the product or the service. The PUV of the product is the perception of the user or the customer regarding the value of the product irrespective of the actual production cost. The PUV of Apple, Inc. Products is very high as the brand value is high. The brand has always positioned itself into the niche segment and therefore the PUV has been high. Quality and style are areas that Apple, Inc. has always focused on. Niche design, high resolution imaging, fast processing are some of the features that makes Apple, Inc. unique. In graphics and display Apple, Inc. has been unbeatable and this provides the greater appeal to Apple, Inc. products. For the Australian market the actual product level would not need to change much but however for branding it needs to focus on the local taste and also needs to change packaging to suit the Australian sentiments (Kotler and Keller, 2009).
The final product categorization is done on the basis of augmentation or the intangible aspects. This includes services, warranties and after sales support. Apple, Inc. has highly effective and dedicated customer support services and provides high after sales support. The products also have global warranties and thus the customer experience and satisfaction are both high. Overall it can be stated that the product strategies adopted by Apple, Inc. have been significant in ensuring high market share and profitability. The entry into the Australian Market should be successful as the product strategies used by Apple, Inc. has a global appeal. However, the company should focus into the local market and its exact needs and trends. For example the maps on I phone do not work for many countries and this is an area that Apple, Inc. needs to focus on. The navigation feature is an essential feature of the product but the organization needs to ensure that the features are supported for the country for which the product is being targeted (Lane, 2008).
Pricing strategies are based on quality and the alleged value. In case of Apple, Inc. quality has been the focus since the conception. The following figure illustrates various pricing strategies that are used by organizations:
(Marketing Insider, 2013)
Pricing strategy that Apple, Inc. focuses on is the Premium Pricing strategy. The premium pricing strategy has been useful for the product categorization and also for the positioning of the product. The target market for Apple, Inc. product is the upper middle class and the upper class and hence it has always targeted the niche segmentation. Niche segmentation has allowed Apple, Inc. to focus on the premium pricing strategy. The company has also focused on quality and has never compromised in this segment and therefore the skimming strategy is not applicable. The pricing strategy has not been a hindrance for the products popularity. It can be stated that in the laptop segment, Apple, Inc. has been affected due to rise of organizations like Lenovo, however the company persists with the pricing differentiation as it has concentrated on niche segmentation. If the company choses a penetration strategy it will lose its product differentiation strategy and hence will have an impact on the global brand image and hence the premium pricing strategy should be kept intact even when it focuses on the Australian Market (Baker, 2007).
There are various types of market entry which have been illustrated in the diagram below. The Direct Export strategy is already in use by the organization as it has a network of distributors for its products globally. However the report focuses on foreign production and thus the options to be explored are licensing, Joint Ventures and ownership. In case of licensing Apple, Inc. would be needed to share its patents with another organization and this is not desirable as the company invests heavily into research and development. Joint Ventures with cellular operators are the best possible way of entering into a foreign market. Apple, Inc. needs to identify the best carriers in the Australian market and set up joint ventures with them so that both can be mutually profitable. The cellular operators can provide the phones at cheaper rates and can also provide bundled data offers which would be highly attractive for the customer segment. This means of foreign entry has been largely organized by Apple, Inc. in other countries as well. Thus it can be indicated that the company needs to form joint ventures with cellular operators in Australia to have a good market share. Further ownership is also another area that is concerned; as foreign market production is being considered Apple, Inc. should focus on total control of operations in Australia and should have fully functional operations within the country. The span of control and the organizational structure have been described in the following segment (Graham, 2008).
Apple, Inc. having its headquarters in California, USA, is globally expanding its wings in various other countries. Its growth strategies and organizational structure in Australia is being discussed widely in this article. Apple, Inc. is a brand that has grown extremely fast at less time in various parts of the country. Its growth in Australia has undertaken the organizational strategies of headquarters to build its organizational structure in Australia.
If we consider the initial organizational structure that was created by Steven Jobs and Stephen Wozniak in the year 1977 was very simple, though it got modified a number of times by the CEO’s and managers of Apple, Inc. The culture of Apple, Inc. is generally based on the tactic that a worker would work more efficiently if he is self-motivated and passionate towards his job. This distinctive structural strategy has proved to be worthwhile thereby generating a greater progress in the growth of organization. The tactics always focused on delivering the responsibilities of decision making in the hands of its employees in the field (Apple, Inc. Computer, 2009).
Apple, Inc.’s entire organization depends upon one motto that is ‘Think Different’. Apple, Inc. has a strong and potential following of loyal customers and wide fan list that consistently deliver to the success of organization. Apple, Inc. has incorporated the tactic influence of creating innovations with more relevant ideas in its Australian expansion. They have the unique ability to design and develop their own operating system, application software and hardware. The open minded and innovative approach to business has popularized the company worldwide. The main focus of Apple, Inc. is to provide quality products and services to its customers. Apple, Inc. is a prominent company in the corporate technology and consistently strives to retain its leading position. It gives priority to its office staff the same way it gives importance to its customers (Baker, 2007).
Apple, Inc. strongly believes their philosophy that has been absorbed from headquarters says that business can never be operated as usual. In order to expand it to the highest level it has to endure several changes by conducting endless meetings. Innovation and ideas is all that made Apple, Inc. a discernable name in the corporate technology (Apple, Inc. Computer, “Investor Relations”, 2009). Innovation is the leading factor of Apple, Inc.’s business strategy. Apple, Inc. has classified its business strategies into three sub sets.
• Providing quality and innovative products to customers
• Pioneering business process
• Business model innovation
Innovation of products is about refining the features of existing products and services. The other way it incorporates state-of-the-art ideas and technologies is inventing or developing new products or services with updated features. Business process innovation comprise of re-engineering of the business structure thus opening a complete new realm of the market and reach broad range of customers. An innovation in the business process begins the condition of delivering solutions to the untouched needs of customers. Innovation proposes a complete new introduction of business to the market. The Australian extension of Apple, Inc. Company has its entire business process innovated and introduced new variations and ideas of products and services to its customers (Kohtler, 2009). Innovation is considered to be the best way to lead the competitive market. Innovation of products, business structure or model helps in creating a long lasting impression in the market. 95% of customers desire products or services with innovation in it. Accordingly it is a successful strategy to draw more customers and satisfy them by fulfilling their innovative demands. Companies those are not potent in the field of innovation and stick to their existing products would face a major pitfall in the market place (Lane, 2008).
Below is a graphic representation of Organizational structure of Apple, Inc.:
Existing products in the Australian sector of Apple, Inc. in both the software and hardware production has been kept in mind while creating newer models of Apple, Inc. products. (Mac OS X) is the signature operating system of Apple, Inc., which operates on Mac but Apple, Inc. controls the development, distribution and price of the products. This configuration is done to ensure a secure, powerful and integrated outfit of computers built by Apple, Inc. Apple, Inc.’s latest products list comprise of all Apple, Inc., iPhone, iPod and iTunes media store, and iPad. These inventions are the most cutting-edge technology incorporated in the innovative device (Apple, Inc. Computer, “iPad: Technical Specifications”, 2010).
Apple, Inc. has planned to make use of their earnings obtained from its market segment in the operation of their business in Australia. With the earnings and revenues obtained from market segments and Australian segment, Apple, Inc. is planning on expanding its operation by increasing its market share, extending product life cycles, reducing consumer costs and obtaining greater vertical integration (Funding Universe, “Apple, Inc. Computer, Inc.,” Funding Universe Company Histories, 2009).
Apple, Inc. makes every effort to offer ample quantities of quality products to customers at a competitive rate. The company focuses on encouraging consistent demand for its products by implementing new designs, innovative features and operation. The operation of this leading brand rides on the evolution of high quality mobile communication devices. As its operation in the Australian segment may encounter rise and falls with resources and exchange rates and taxes may also affect their finance and operational strategies. Thus, Apple, Inc. plans to reduce their product price in order to grab more customers in their international operating locations.
I have presented the focus on the marketing strategies of Apple, Inc. and also illustrated the need for foreign entry. The paper has highlighted all the important approaches that would be favorable for the entry of Apple, Inc. in Australia. The different modes of market entry have been discussed and the most applicable techniques have been highlighted. Furthermore this report has shown the organizational structure that needs to be maintained for its operations. As the suggestion has been of total ownership the span of control is needed and these factors have been discussed in this report to illustrate how effective the organization can be in the United States as well as Australia.
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