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 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 has two major aspects which are material and immaterial. The material part is the packaging and the product. The immaterial part constitutes things 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. The iPhones and iPods were created to have the best in class functions. Apple, Inc. relies on deep market research and considers the exquisite tastes of the consumer and designs the products accordingly (Aaker, 2010). It is proof Mac users would never want to change to another brand and this holds true for iPhone users. Sales support and warranties are best in class for products and user experience is always very high.
The product can be classified into three areas: Core- The benefit of service of the product is analyzed. The products Apple, Inc. offers are extraordinary on service quality. Apple, Inc. invests heavily in research and development which makes the service high quality. All products or services have life cycles; this is where there the decline phase begins. The following figure illustrates the product life cycle for all products (Baker, 2007).
In the next level of product categorization the points focused on are the brand name, style, features, quality, and packaging. For Apple, Inc. brand name and value is extraordinarily high. With brand name and value there is the Perceived User Value of the service and products. The PUV of the product is the awareness of the customer regarding the value of the product regardless of the production cost. The brand will always position itself into the niche segment and therefore the PUV will remain high. Style and quality are areas that Apple, Inc. has always concentrated on. Niche design, fast processing, high resolution imaging, are features that makes Apple, Inc. standout from the competition regarding graphics and display. Apple, Inc. is invincible and provides great appeal. For the Australian market the actual product level would need to be altered for branding since it needs to focus on local consumers. It also needs to revamp its packaging to suit the Australian consumers (Kotler and Keller, 2009).
With Apple, Inc., growth has been substantial and the products have reached a maturity stage and there is a chance of decline. This has also been shown to certain extent as Samsung has become the market leader in the mobile phone segment. The rise of cheaper brands like Dell, Asus and Aspire is a challenge. Apple, Inc. has always focused on consumer trends and demands and has been capable of avoiding the decline stages. Additional market development strategies have been applied by Apple, Inc. to warrant no major failures (Graham, 2008). Apple, Inc. has proven to be very successful in market penetration and product development. The organization has majorly focused on the US market which leads to openings for market development and diversification strategies. This report is based on global entry and diversification strategy is most substantial. The organization needs to classify its products and services based on the Australian Market. The consumer needs and preferences will always be different which means the organization needs to turn their focus on trends in a particular country and focus on socio-cultural aspects to innovative products for the market (Kohtler, 2009).
The final product categorization is done on the basis of augmentation or the intangible aspects. This includes warranties, services, and sales support. Apple, Inc. dedicates customer support services and provides higher than norm sales support in all stages of the consumers purchase. The products also have global warranties so customer experience and satisfaction remain extremely high. It is globally known that product strategies used by Apple, Inc. have been substantial in safeguarding higher profitability and market sharing. The entry into the Australian Market will most likely be successful since product strategies used by Apple, Inc. have a global appeal. However, the company should focus into the local market and its exact needs and trends. The maps on iPhone do not work for some countries, this is an area that Apple, Inc. needs to definitely focus on and bring to the market. The navigation feature is essential and Apple, Inc. needs to ensure this feature will be supported for each country the product is being targeted (Lane, 2008).
The Direct Export strategy is already in use by the organization as it has already has a network of distributors for its products all over the world. In the case of licensing Apple, Inc. would need to share its patents with other organizations and this is not likely since the company heavily invests in research and development. Joint Ventures with cellular operators are the best possible way of joining a foreign market. Apple, Inc. will need to pinpoint the best carriers in Australian to set up joint ventures so both can be equally profitable. Cellular operators can provide phones that are more cost effective for the consumer and provide bundled data which is very appealing for customers. This means the foreign entry would be largely organized by Apple, Inc. in other countries as well. This 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. needs to focus on total control of operations in Australia and needs to have a fully functional operation in the country. Apple, Inc. has its headquarters in California is globally expanding its branches in various other countries. Its organizational structure and growth strategies in Australia are being discussed at great lengths 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.
Pricing strategies are based on presumed value and quality. In the case of Apple, Inc. quality has been the focus since the beginning. The following figure illustrates various pricing strategies that are used by organizations:
(Marketing Insider, 2013)
Pricing strategy Apple, Inc. focuses on is the Premium Pricing strategy. Premium pricing strategy is useful for the positioning of the product and product categorization. The expected market for Apple, Inc. product is upper middle class and upper class; this has always been the target concerning the niche segmentation. The company has also focused on quality and has never compromised in this segment which makes the skimming strategy is not valid. Niche segmentation has allowed Apple, Inc. to focus on their premium pricing strategy. This pricing strategy has not hindered the products attractiveness. It can be stated that in the laptop segment, Apple, Inc. has been affected due to rise of organizations like Asus, Dell and Aspire, however the company continues with pricing diversity since it is concentrated on the niche segmentation. If the company choses a penetration strategy can lose its product distinction and it will have an impact on its global brand image and the premium pricing strategy would be kept unbroken even when it chooses to focuses on the Australian Market (Baker, 2007).
The initial organizational structure created by Steven Jobs and Stephen Wozniak in the year 1977 was very simple, though it got changed 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 workers will work more efficiently if they are passionate and self-motivated towards their job. This distinct structural strategy has proven to be worthwhile in so doing generating a greater progress in the growth of organization. This tactic has 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 of influence and creating innovations with more relevant ideas in its Australian expansion. They have the ability to develop and design application software, operating system, and application hardware that is suited for them. They are open-minded and innovative when it comes to being universalized worldwide. The focus of Apple, Inc. is to provide quality products and services to its customers. Apple, Inc. is a well-known company in the corporate technology and always strives to retain its top 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 from headquarters stating that business can never be operated as usual. In order to expand it to the highest level it has to undergo changes by having countless meetings. Ideas and innovation are all that made Apple, Inc. a distinct name in corporate technology (Apple, Inc. Computer, “Investor Relations”, 2009). Innovation is the leading factor of Apple, Inc.’s business strategy. Apple, Inc. classified its strategies into three sub-sets;
• Business model innovation
• Providing quality and innovative products to customers
• Pioneering the business process
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. For that reason it is a successful strategy to draw more customers and satisfy them by fulfilling their pioneering 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).
This graphic represents the organizational structure of Apple, Inc.:
Current products in the Australian sector of Apple, Inc. in both the hardware and software production has been kept in mind while generating 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 is completed to ensure a powerful, secure, integrated and powerful group 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 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 Australia may see rise and falls with resources, exchange rates and taxes may also affect the finance and operational strategies. Apple, Inc. plans to reduce their prices in order to attract more customers in the international operating locations.
I illustrated the need for foreign entry. I have touched on all the important approaches that will be favorable for Apple, Inc. in Australia. The different modes of market entry have been discussed and the most applicable techniques have been highlighted. This report has shown the organizational structure that must be maintained for consistent operations. As the suggestion has been of total ownership, control is needed and these factors have been discussed to illustrate how effective the organization can be in the United States as well as Australia.