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Strategy Formulation
Vision & Mission Statement:
There are no official or written statements of vision or mission
on apple website but different statements of CEO or press
release may be the vision or mission of Apple.There is no
specific area for vision and mission as there are no clarifications
about the vision and mission.
VISION STATEMENT : (Future positon ideas)
We strive to provide users of Apple products the best
experiences possible though innovative product designs and
software
MISSION STATEMENT:
Not all market shares are equal, and Apple has never been
about the most; we are about being the best.
We believe that we are on the face of the earth to make great
products and that’s not changing.
We are constantly focusing on innovating.
We believe in the simple not the complex. (only selected initial 3
statement by Tim)
“Apple designs Macs, the best personal computers in the world, along with
OS X, iLife, iWork and professional software. Apple leads the digital music
revolution with its iPods and iTunes online store. Apple has reinvented the
mobile phone with its revolutionary iPhone and App Store, and is defining
the future of mobile media and computing devices with iPad.”
Analysis:
Vision or Mission statement is critically important to any organization
because it’s the right way towards its vision. The best vision or mission
statements should be short, simple, and specific for any business.
Steve Jobs started the new iconic company, the mission statement was:
"To make a contribution to the world by making tools for the mind that
advance humankind.
This mission statement is clear, simple, and for human advancement.
Tim Cook the current CEO of Apple. Inc. stated this is the company
mission statement which is published in 2018 annual report.
“We strive to provide users of Apple products
Stage 2:
The Matching Stage
BCG Matrix
Grand Strategy Matrix
IE Matrix
SPACE Matrix
SWOT Matrix
OPPERTUNITIES:
1. Apple pays finger prints
2. In-house credit system
3. Product diversification
4. Formation of strategic partnerships
THREATS
1. Patent infringement
2. Reverse packaging
3. Quality problems with negative effects on sales and Apple brand image
4. Intense competition like Samsung, Lenovo, Chinese companies in smart
phone. Dell, Sony and Toshiba in PCs.
5. Rising popularity of Google Android may affect its market share.
SWOT ANALYSIS:
STRENGTHS:
1. Safety of personal data.
2. Pioneer in the personal desktop computer.
3. Max market capitalization.
4. High performance production line with products like iphone, ipad, ipd, mac
computer.
WEAKNESS:
1. 15% global market show.
2. Significantly expensive.
3. Not compatible with many software and windows machine
4. Late production of Larger screen in smart phone.
Key Internal Factors Weight Rating Weighted Score
Strengths
iTunes Music Store is a good source of 0.15 4 0.60
revenue, especially with the iPod and
the availability on Windows platform.
Apple‟s niche audience provides the 0.10 3 0.30
company with some insulation from
the direct price competition.
Revamping desktop and notebook 0.10 3 0.30
lines.
Low debt—more maneuverable. 0.06 4 0.24
Developing own software and 0.14 3 0.42
hardware.
Good brand loyalty. 0.05 3 0.15
Web technology can be used to 0.10 4 0.40
improve product awareness and sales.
Weaknesses
Dependency on new product launches. 0.06 1 0.06
Weak presence in business arena. 0.07 1 0.07
Slow turn around on high demand 0.03 2 0.06
products.
Weak relationship with Intel and 0.10 1 0.10
Microsoft.
Weak presence in markets other than 0.04 2 0.08
education and publishing.
Total 1.00 2.78
BCG,Grand&IEMatrixes
Advantages of cost leadership:
Higher profitability:
The selling of products in a lower cost basis and competitive pricing,
allow the organization to have a margins greater than other
competitors who invest more to produce a similar quality for the
same product.
Increasedmarketshare:
By earning higher profits, the organization can use them in
increasing their market share and satisfy their customers demand.
Sustainability:
During tough economic times, or in a beat down price war in the
market, companies with lower costs of production have a better
chance to survive facing other competitors.
Capital growth:
When an organization use cost leadership strategy, they‟ll have
more capital resources available to invest for further developments.
Disadvantages of cost leadership:
In order to have a cost leadership strategy, the company need to
reduce the cost of some of their services such as the customer
services who will lead to lose the loyalty of their customers, and in
the other hand, they will reduce the cost of the R&D department
who will lead to the lack in the innovation, and it will affect
negatively on the customers who looking for the up-to-date
technologies and innovations.
ProductDesign
A major aspect of a product differentiation strategy comes
from product design. Products that display a different visual
style, include different features or handle different tasks
stand out from those offered by the competition. Apple has
made product design a hallmark of its product differentiation
strategy since the company's origins. When Apple introduced
the iPod, iPhone, and iPad, no similar consumer electronics
products existed in the market that included so many features
in one package.
PricingStrategy
Another factor in product differentiation plans stems from the
company’s pricing strategies. Apple Computers co-founder
Steve Jobs sought to create a topnotch product with a price
proportionate to its level of quality while maintaining high
profit margins. The lowest-priced Apple products consistently
fall in the mid-range, but customers are willing to pay that
price for the high quality of the user experience. This pricing
strategy runs counter to that of makers of PC "clones," which
put out low-end computers and rely on slim profit margins.
Brand Loyalty
Apple has been among the most successful technology
companies in the development of loyalty to a brand. Loyal
Apple customers will wait in line to purchase the latest
iPhone, download music through iTunes, watch their favorite
television shows on Apple TV and play games on their iPads.
The company's efforts toward building brand loyalty have
allowed Apple to differentiate itself from Microsoft, Samsung
and other competitors in its various arenas.
Retail Outlets
Apple's pricing strategy extends to its differentiation in the retail
electronics marketplace. While users can purchase PC clones,
tablets and mobile phones from nearly any electronics outlet,
Apple differentiates itself by providing limited quantities to "big
box" retailers and focusing its retail efforts on its Apple Stores.
For its third-party retailers, Apple uses a "minimum advertised
price" to prevent outlets like Walmart and Best Buy from
undercutting the prices found at the Apple Stores.
Targeting:
1.One supplier target one segment with a single product
2.One supplier targets all segments with one brand and
several products.
3.One supplier target several segments with several
products or brands, and each segment has its own product
or brand. Apple uses the second type of targeting, they
target all segments with a single brand,
“APPLE” contains several products (like the iPhone, iPad,
iPod, and iMac).
Positioning:
It’s the third and the last step in the STP process. It‟s
all about perception. After the segmentation and the
targeting of a market, the marketers need to put the
products in the market finally. Apple positioned as a
premium brand and price for the customers who look
for a high-class relation with the company. This
premium price includes all Apple products. Therefore,
Apple create a culture that has differs it from its
competitors by positioning a less price sensitive
customers.
Break the Price competition-option 1 Strategic evaluation and selection
Sustainable(√)  Suitable to redesign of services cape and
layout.
 UK culture adaptation
 Attract new customers’ attention.
Acceptability(√)  Low risk of redesign of Apple store
 Attract local customers
 Increasing profits will maximize
shareholders wealth
Feasibility(√)  Debt Coverage > Industry average→ low
financial risk.
 Leverage ratio < Industry→ low business
risk.
 Sufficient cash reserves
Keep sustainable development-option 1 Strategic evaluation and selection
Sustainable(√)  Build the gap of price between UK and other
countries, like US
 Appeal local customers
 Attain existing customers
Acceptability(X)  Improve the customer satisfaction and
loyalty
 decrease gross profit margin in the short
term and rise afterwards
 Less dividends for shareholders
Feasibility(X)  Further funds for accessories products or
service
Apple Inc. Case Study.
Apple Inc. Case Study.

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Apple Inc. Case Study.

  • 1.
  • 2. Strategy Formulation Vision & Mission Statement: There are no official or written statements of vision or mission on apple website but different statements of CEO or press release may be the vision or mission of Apple.There is no specific area for vision and mission as there are no clarifications about the vision and mission. VISION STATEMENT : (Future positon ideas) We strive to provide users of Apple products the best experiences possible though innovative product designs and software MISSION STATEMENT: Not all market shares are equal, and Apple has never been about the most; we are about being the best. We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. (only selected initial 3 statement by Tim)
  • 3. “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.” Analysis: Vision or Mission statement is critically important to any organization because it’s the right way towards its vision. The best vision or mission statements should be short, simple, and specific for any business. Steve Jobs started the new iconic company, the mission statement was: "To make a contribution to the world by making tools for the mind that advance humankind. This mission statement is clear, simple, and for human advancement. Tim Cook the current CEO of Apple. Inc. stated this is the company mission statement which is published in 2018 annual report. “We strive to provide users of Apple products
  • 4. Stage 2: The Matching Stage BCG Matrix Grand Strategy Matrix IE Matrix SPACE Matrix SWOT Matrix
  • 5. OPPERTUNITIES: 1. Apple pays finger prints 2. In-house credit system 3. Product diversification 4. Formation of strategic partnerships THREATS 1. Patent infringement 2. Reverse packaging 3. Quality problems with negative effects on sales and Apple brand image 4. Intense competition like Samsung, Lenovo, Chinese companies in smart phone. Dell, Sony and Toshiba in PCs. 5. Rising popularity of Google Android may affect its market share. SWOT ANALYSIS: STRENGTHS: 1. Safety of personal data. 2. Pioneer in the personal desktop computer. 3. Max market capitalization. 4. High performance production line with products like iphone, ipad, ipd, mac computer. WEAKNESS: 1. 15% global market show. 2. Significantly expensive. 3. Not compatible with many software and windows machine 4. Late production of Larger screen in smart phone.
  • 6.
  • 7. Key Internal Factors Weight Rating Weighted Score Strengths iTunes Music Store is a good source of 0.15 4 0.60 revenue, especially with the iPod and the availability on Windows platform. Apple‟s niche audience provides the 0.10 3 0.30 company with some insulation from the direct price competition. Revamping desktop and notebook 0.10 3 0.30 lines. Low debt—more maneuverable. 0.06 4 0.24 Developing own software and 0.14 3 0.42 hardware.
  • 8. Good brand loyalty. 0.05 3 0.15 Web technology can be used to 0.10 4 0.40 improve product awareness and sales. Weaknesses Dependency on new product launches. 0.06 1 0.06 Weak presence in business arena. 0.07 1 0.07 Slow turn around on high demand 0.03 2 0.06 products. Weak relationship with Intel and 0.10 1 0.10 Microsoft. Weak presence in markets other than 0.04 2 0.08 education and publishing. Total 1.00 2.78
  • 9.
  • 11.
  • 12.
  • 13. Advantages of cost leadership: Higher profitability: The selling of products in a lower cost basis and competitive pricing, allow the organization to have a margins greater than other competitors who invest more to produce a similar quality for the same product. Increasedmarketshare: By earning higher profits, the organization can use them in increasing their market share and satisfy their customers demand. Sustainability: During tough economic times, or in a beat down price war in the market, companies with lower costs of production have a better chance to survive facing other competitors. Capital growth: When an organization use cost leadership strategy, they‟ll have more capital resources available to invest for further developments. Disadvantages of cost leadership: In order to have a cost leadership strategy, the company need to reduce the cost of some of their services such as the customer services who will lead to lose the loyalty of their customers, and in the other hand, they will reduce the cost of the R&D department who will lead to the lack in the innovation, and it will affect negatively on the customers who looking for the up-to-date technologies and innovations.
  • 14. ProductDesign A major aspect of a product differentiation strategy comes from product design. Products that display a different visual style, include different features or handle different tasks stand out from those offered by the competition. Apple has made product design a hallmark of its product differentiation strategy since the company's origins. When Apple introduced the iPod, iPhone, and iPad, no similar consumer electronics products existed in the market that included so many features in one package. PricingStrategy Another factor in product differentiation plans stems from the company’s pricing strategies. Apple Computers co-founder Steve Jobs sought to create a topnotch product with a price proportionate to its level of quality while maintaining high profit margins. The lowest-priced Apple products consistently fall in the mid-range, but customers are willing to pay that price for the high quality of the user experience. This pricing strategy runs counter to that of makers of PC "clones," which put out low-end computers and rely on slim profit margins. Brand Loyalty Apple has been among the most successful technology companies in the development of loyalty to a brand. Loyal Apple customers will wait in line to purchase the latest iPhone, download music through iTunes, watch their favorite television shows on Apple TV and play games on their iPads. The company's efforts toward building brand loyalty have allowed Apple to differentiate itself from Microsoft, Samsung and other competitors in its various arenas. Retail Outlets Apple's pricing strategy extends to its differentiation in the retail electronics marketplace. While users can purchase PC clones, tablets and mobile phones from nearly any electronics outlet, Apple differentiates itself by providing limited quantities to "big box" retailers and focusing its retail efforts on its Apple Stores. For its third-party retailers, Apple uses a "minimum advertised price" to prevent outlets like Walmart and Best Buy from undercutting the prices found at the Apple Stores.
  • 15.
  • 16. Targeting: 1.One supplier target one segment with a single product 2.One supplier targets all segments with one brand and several products. 3.One supplier target several segments with several products or brands, and each segment has its own product or brand. Apple uses the second type of targeting, they target all segments with a single brand, “APPLE” contains several products (like the iPhone, iPad, iPod, and iMac). Positioning: It’s the third and the last step in the STP process. It‟s all about perception. After the segmentation and the targeting of a market, the marketers need to put the products in the market finally. Apple positioned as a premium brand and price for the customers who look for a high-class relation with the company. This premium price includes all Apple products. Therefore, Apple create a culture that has differs it from its competitors by positioning a less price sensitive customers.
  • 17. Break the Price competition-option 1 Strategic evaluation and selection Sustainable(√)  Suitable to redesign of services cape and layout.  UK culture adaptation  Attract new customers’ attention. Acceptability(√)  Low risk of redesign of Apple store  Attract local customers  Increasing profits will maximize shareholders wealth Feasibility(√)  Debt Coverage > Industry average→ low financial risk.  Leverage ratio < Industry→ low business risk.  Sufficient cash reserves
  • 18. Keep sustainable development-option 1 Strategic evaluation and selection Sustainable(√)  Build the gap of price between UK and other countries, like US  Appeal local customers  Attain existing customers Acceptability(X)  Improve the customer satisfaction and loyalty  decrease gross profit margin in the short term and rise afterwards  Less dividends for shareholders Feasibility(X)  Further funds for accessories products or service