The Success Of Apple Inc Marketing Essay

2871 words (11 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Of all the companies that needed to be selected for this question, choosing apple was not a difficult task. As a user and as an admirer, apple comes across as a company which is different that the others in many ways than one. Apart from being one of the most respected brand that exists today, apple also commands respect among the business community which named it “America’s most respected company” in the year 2008. Not only does apply provide the comforts of advance technology to its users but it has also proven to be “money making machine” for its investors giving astronomical returns to its shareholders year after year. But its just not the products of the company or the technology that makes this company an interesting choice, It also Steve Jobs. Apple co-founder and CEO, Steve Jobs is passionate about the products and only expects excellance and nothing less. As an ever demanding boss, he tries to maintain balance in his products when functionality requires to compromise beauty. Steve Jobs has embraced innovation and challeneged the company to its optimum potential. When Steve Jobs returned to apple after a 12 year exile, he assisted and helped creating the “Think Different” advertising campaign which glorified the innovators who were frequently were written off for their ideas which were often deemed crazy.

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Apart from being a company which has revolutionized the technology domain, apple has come to be recognized as the company with the difference. Its achievements have left many spellbound for years and apple with its consistent performance and innovative products still continues to do so. Most of the companies in the technology space focus on one or two core sectors, but apple is involved in all of them. Apple not only produces its own hardware and its own operating system. The application on apple products also run only on its hardware and operating systems. It can said that apple has combined characteristics of companies like Dell, Sony, Microsoft & Acer Technologies. Conventional wisdom would suggest that apple is doing it all wrong, it is involving itself in almost everything and keeping itself close. Even Adam Smith’s capitalist model suggested that new and better things arrive when there is openness and freedom of competition. Apple is creating success otherwise by operating by its own and keeping everything closed. The factors which have contributed towards its success are;

The technology; which make the apple products proprietary. Which means that it is one of its kind and its features are not common which could not be found in other products of similar type. Apple products are unique and cannot be substituted with other general products. This results in it having a better margin for higher profits.

Apple products are lieftstyle products which is focused to support the mass market and provide considerable offerings like music, video, internet all under one product. Most of apple products have the above common features.

Apple has created an ecosystem of its own by linking the functionality of the product with other apple products. For eg, Ipod remains uniquely competitive because Itunes are accessible only through Imac and vice versa.

To add to above certain key highlights worth mentioning also makes apple a very interesting company.

Apple inc. generated revenue of over 65 billion last year which is bigger than the GDP of countries like libya, iraq, Ecuador and 100 other countries in the world.

Iphone, which revolutionized the mobile phone segment and changed completely the way we look at the cell phone account for 39% of apple inc;s revenue. Interestingly, IPHONE did not exists about 4 years ago. We could only imagine how apple’s hard work and consistent focus on innovation has created tremendous amount of value.

Propreitary in the apple products which is one of the key features of the company has provided huge value in terms of revenue as music, videos and games offering to the customers generated more than USD 4 billion last year for the company.

Its recently launched IPAD became a rages as and when it was launched as apple sold 7.5 million IPADS last year, In 9 months, On an average1157 IPADS were sold every hour which means 19 IPADS were sold sold ever minute.

Apple inc is the leader in the category it serves. Not only apple follows what it believes in but also leads by example. Apple has consistently done that and has radically redefined a product category by creating its own distinctive business model. Apart from being passionate, Apple Inc has surprised by exceeding expectations of the marker but technologically and financially. Steve Jobs created something 30 years ago which encouraged its engineers to be an engineer but feel like an artist. He created an engineering company which was also had the touch of with arts and science. Technology has indeed bought people closer to each other but its apple which has combined style with modern engineering to give its products a different look and a different feel the way they go about tenchology in their every day lives.

There are many more things which can be said about this company but its also worth mentioning what has made this company such high levels of distinction in all walks of life and what is the factor which make the company and its products world class. All of the above make apple a very interesting company to explore and learn more about the factors which contributed towards it sustainable success.

Leading all the way:

In the tech universe, Apple became the largest company and second biggest in US after ExxonMobil. Apple’s market capitalization was hovering just under Microsoft for months, the company which almost killed apple and then saved it by investing around $150 Million in the year 1997. Today, apple has not just took leadership by increasing its market cap when compared to that of Microsoft but it is determined to keep companies like google, amazon, htc on the other side of the fence. The journey of apple to reach such heights has been very fast, which probably is the reason why there has been little understanding of what has happened.

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Getting to the top means having the better of your competition. The hall of fame in competition with regards to apple has been Microsoft in the late 80’s, IBM in the 90’s and for more than a decade intense rivalry has shaped up between google and apple . The resignation of Eric Schmidt’s resignation from the apple board highlights the intensity of the rivalry which exists today. But that hasn’t stopped of changed any of plans that apple inc has for itself. It continue to innovate and makes products which are technologically better and more stylish than the competitors. Apple has grown many leaps and bounds. Sicne jobs’ return to apply in the year 1997, apple stock has risen from $3 to $247. Today more than 85 Million IPods and IPads are in existence. launchesApply users have downloaded 4 Billion application for them the apple’s app store and more than 12 Billion songs, 35 Million movies and 275 Million TV shows from ITunes. Apple has occupied the leadership position in terms of mobile handset sales. In the year 2010, apples revenue reached an astounding $11.9 Billion when compared to the closest revial nokia, which achieved $9.4 Billion. Many books have been written about the success story of apple yet the reason behind the success story is a combined team effort by the employees and its leaders.

According to Gene Quinn (2010), Apple has managed to sustain its innovation efforts with calculated, consistent increases in R&D spending and rapid fire launches of new products and upgrades. What lies behind apples success is not luck – The company has very deliberately focused its efforts on generating better ideas faster”.

The major drivers of apple’s prosperity are creativity of the people and the ability to innovate. Being the above two is not as easy as it may sound. Studies have shown that effective management of people and success of the organization have a deeper correlation. Companies need to have a different approach to deal effectively with the people to become innovative and creative (Ted and Bessand, 2009). Ted and Bessand have clearly defined the fundamental characterisitics of a succssfull organization, according to them, companies which have a shared vision, effective teams, creative climate, high involvement innovation and effective leadership have more chances of succeeding than others. Apples approach to the same is completely different as it follows an integrated approach where it retails its products on its own rather than retailing it to the service partners. This has a whole new range of effect on software and hardware as you get an an apple product when you buy an apple product. As irrational as it may sound, apple follows this process since it wants it products to be high on reliability which is difficult to achieve if there are too many companies making contriburion to product a single product. This approach frees apple from any dependence on network partners and allows itself to change easily according to the everchanging environment. Another feature of apples strategy is to focus on few products for a particular market and try to make it as perfect as possible. In order to then differentiate the apple product from others significant attention is paid to the design, functionality capability and usability of the product. Customer loyalty is perceived from high quality products that apple produces for them. (Morrison, 2009) Another feature which makes apple successful is that it does not rely on research reports on the market but relies on its intuition to create a perfect product for itself (Burrows, 2004). The policy apple follows was beautifully summarized by the Apple Inc. VP who said that customers don’t know what they want for themselves, you have to tell them what they want (Applepeels 2005) and as steve jobs says, once a great product is produced then everybody would want to use it (Morris, 2008)

In terms of success achieved by apple at product development, it’s the environment under which the company operates which fosters its employees to think out of the box and produce some of the finest products ever known. Whatever it may be, all ideas are heard and meeting are never uneffective. Even the internal communication structure at gets remarkable attention and is taken extremely seriously (Grossman, 2005)

Steve Jobs argues that the reason behind apples success is the ability of apple to act as a gravitational force that pulls creative and bright people together towards it. It is steve jobs himself who has effectively conveyed the companys mission to its wrkforce, which is to make great products that high profits (Burrows, 2004). Everybody at apple feels proud of being part of the company which is the epitome of innovation. Steve jobs has been able to foster the right mix of individuals and has able to retain the best talent in the world by offering great working environment at apple.

Apple’s journey to becoming leaders was not an easy one and took a lot of time and hard work. It is unimaginable to think that the inception of apple computer was in a garage by two young people who dreamed of changing people’s life forever. Sever Wozniak was introduced to steve jobs in 1971 by a common friend and both of them shared a common passion for electronics. Jobs and wozniak started a company together in the year 1976 and together built their first computer called the “Apple I”. Immeidately after apple I, both of them started work on Apple II and needed money to make machines on a bigger scale. The potential was realized but money was needed to achieve optimum potential. Steve Jobs then met Mike Makulla who was a 38 year old retired millionaire who made money through stock option which he held while he was working at the Intel marketing department. Makulla invested $250,000 to get a thirds share of apple inc. and used his expertise to realize the perceived potential he saw in the company. Jobs along with the electronic wonder wozniak and makulla became the driving force for apple.

Apple II was an instant success with the public. Wozniak’s multi features floppy disk and Daniel Fylstra’s VisiCalc program specially made for the apple computer further increased the sales of the apple computer. Apple II proved to be the major success point for the company as in the year 1977, apple inc achieved sales upto $775,000. Just two years later, apple achieved sales os $50 Million. The tremendous growth continued and by the year 1981, apple was achieved sales upto $335 Million. Within five years of its conception apple achieved a distinctive rank in the list of fortune 500 companies and became the fastest growing company in the American history.

Though, succesfull initially, apple had its own share of disasters and problems. The computer Apple III which was introduced into the market in the year 1981 proved to be a disaster and cost the company dear. In the same year, Steve Wozniak’s four seater plane crashed which caused his temporary amnesia and led to his temporary retirement from the company. If the above problems were not enough, relationship between Jobs and a few senior management people soured. Meanwhile, Steve Jobs began work on designing computer which would be ahead of its time and in the year 1983, Apple introduced Lisa, but disaster struck as Lisa failed badly. The entry of IBM into the personal computer space also hardened the competing ability of apple as eventually it lost PC leadership to IBM. Apple maintained consistent growth in saled due to Apple II but all hoped were now on Macintosh to bring about a revolution in the market which Steve Jobs and rest of the apple inc hoped for. And indeed it did. Macintosh hit the market in the year 1984. Steve Jobs deemed at as the most revolutionary product which would be easy to use sophisticated computer. He compared macintosh with Bell’s invention. Macintosh broke IBM’s dominance and brought back apple to leadership position. In the intial three months, more than 70000 Macintosh were shipped and by the end of year the $2495 product sold more than 250,000 units by the end of the year. Eventhough the numbers were great, apple soon fell into crisis which eventually led to firing of Steve Jobs from the company. Macintosh did not meet the criteria for smooth functioning of certain applications as it was not powerful enough. Macintosh’s sales dropped drastically which led to steve job blaming everyone else but himself for the disaster. People at apple were leaving the company. Steve Jobs did not have enough support at the top level management and eventually for the welfare of the company, Jobs was asked to leave. Sales of Apple declined and corporate restructuring took place which led to eventual firing of around 1200 employeed by the apple president John sculley. Sculley eventually persuaded other software companies to write application compatible to the macintosh and soon sales began to increase. Eventually Steve Jobs returned to apple when Apple took over companies Jobs had created after he was fired from Apple Inc. Since then under his leadership apple has performed well financially, came out with innovative products, introduced new product lines and new features. IMac, iBook, Power Mac and the IPod were all released in the time frame from 1998 – 2001, each dominating the category space of its marker. Since 2001, Apple has changed the world looks at a music player, read books, working on a computer, listening to music among other things. Apple has not just changed the way we use technology but has brought about a way we live our lives.

There are certain principle which are the core reasons behind the astronomical success of apple. Though each company faces problems and have issues, the vision and goal if forgotten can lead to disaster and probably would not allow one to come back to the level they were once before tasting failure. Apple has displayed strength by following certain core beliefs which have never changed eventhough people would have changed at the company. These principle are the reason behind apple being the leaders in whatever it does today.

Apple has also got its pricing right. Apple products are neither too costly nor too cheap as it is cut above the rest. Apple products are premium products as its features are something which makes the product look reasonable eventhough it may be priced a bit higher then similar products in the market. But it’s the price people are willing to pay to own an apple product.

No other company till date have been proven to give customer what they want before they know what they want. This is due to the creative vision of Apple Inc’s leader steve jobs and also the employees of the company who live upto the expectations of their dynamic leader. Apple today is on the epicenter of digitilisation of life and doing a good job by “Wow’ing people with amazing products.

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