Consumer Behavior Group Project (Loyalty Program)

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Table of Contents

Company Background
Product Opportunities
Product Threats
Competitive Analysis
Demographic Characteristics of the Target Market
Works Cited

Company Background

Apple is a multinational corporation from America that is in the business of designing, manufacturing and selling personal computers, software and consumer electronics. Its headquarters are based in Cupertino, California. The company was founded by Steve Jobs and Steve Wozniak in 1976. It is unimaginable that both gentlemen were college drop-outs.

Consequently, many people in the society did not want to associate with them. Until early nineties, the company had made great strides in coming up with best personal computers in the market. Such brands included Macintosh, Apple brand, Power Mac computers, iLife, iWork, iTunes browser, iPhones and software (Linzmayer, 31).

Product Opportunities

The company applies proper marketing tactics and majority of adverts are conducted online. The unique feature with the adverts is an ability to use familiar terms instead of difficult ones; therefore, they are easily understood.

The pricing strategy makes the products almost two times expensive relatively (Linzmayer, 33). However, the fulfillment consumers derive out of it justifies the price. As the company kept on growing, its products drastically improved. Currently, everyone in the technological market talks about Apple since the company is well-known for innovation.

Some of the factors that Apple has enjoyed and boosted its growth include customer loyalty and the growing closed ecosystem. Earlier, closed ecosystem has been a setback for business, but currently it supports the operations. Apple now possesses a variety of applications, products and software. Production of new products and supplements at a fast rate has expanded the ecosystem.

In addition, strong loyalty from clients gives Apple a competitive edge. Another reason that serves as a plus to the Apple Company is the reality that it has strong financial backbone (Hitt,43). Apple Company is one of the leading organizations in terms of profitability.

By the end of year 2012, it was estimated that the company had $10,000,000,000, with gross profit margin totaled to be 43.9%, which was far greater than its competitors’ financial indicators. Extra cash is channeled into business activities like acquisitions, purchasing back of the company shares among other things.

Innovation in mobile handsets technology plays a crucial role in a success of the company. In 2012, for the third time, Apple was awarded as the most innovative company in the world. As a result, the organization has capacity to bring technologically innovative products to the market. Apple also enjoys global reputation (Hitt,45).

The company has a world reputation because its products are technologically up to date and well structured. In addition, its products function well. The Apple brand has the property value of $76.5 billion. Moreover, the company has a well-coordinated marketing team and it takes pride in it. This is achieved through the building of superior stores (Hitt,45).

Product Threats

Despite the great opportunities, which Apple Inc. enjoys, the company is facing some threats that pose a great challenge to its business. The demise of Steve Jobs, who has played significant executive role in engineering of the company to its present position, is a major threat. Deep managerial questions arise as to whether his predecessor will keep the track record that has been already established.

In addition, the company is facing challenges of the legal environment, which have chances of curtailing its operations. For example, the lawsuit brought by HTC in which Apple was alleged to have used various patented technologies belonging to the claimant (Young, 110). This stands as a time bomb to Apple.

Competitive Analysis

Another big threat for Apple is the competition from other companies in the technology industry. It is noted that Apple is ranked as the second company in the world after Korean Samsung. This provides the greatest competition in the industry. In Europe, we also have the fast growing Android tide. While there is no doubt that Apple’s products, especially the iPhone, face a great success, the Android platform has started to overtake it.

This is attributable to the finely designed Google software (Young, 113). If Google keeps this momentum, then we will expect tough competition between the two producers. Google also released their Operating System: the Google Chrome, which is now implemented into net-books with users being able to access a variety of contents online as well as surfing the web. This has an impact on the computer sales of the Apple (Hitt,47).

Another potential competitor of the Apple is the Microsoft. The company is in a process of developing Windows Phone 7, which is a direct target of the Apple’s iPhone. Also, the software is admitted to be one of the latest version after the touch screen.

As a result, this move will challenge Apple drastically. Therefore, it is very necessary for Apple to become more creative and come up with competitive strategies due to the new entrants (Hitt, 49).

Demographic Characteristics of the Target Market

Apple has put in place a number of strategies to remain ecologically friendly. For instance, all the company’s data centers completely rely on power retrieved from renewable sources like wind, solar, geothermal and hydro. The products are designed such way that they are environmentally friendly and efficient.

Demographically, the iPhone and iPod have hit their highest rates of usage among the adults in Asian, White and Non-Hispanic market (Young, 117).

It is estimated that 52% of Non-Hispanic adults use the iPod online and the rate of the usage by Hispanic adults is roughly 42%. Currently, Apple maintains over 408 retail stores as well as online stores in fourteen countries. In African markets, the products target the medium and rich layers of the society.

Works Cited

Hitt, Michael, Duane Ireland, & Robert Hoskisson. “Strategic Management Cases.” Competitiveness and Globalization. 2012. 43-50. Print.

Linzmayer, Owen W. “Apple confidential 2.0.”The definitive history of the world’s most colorful company. 2004. 31-39. Print.

Young, Jeffrey, & William Simon. “iCon.”Steve Jobs, the greatest second act in the history of business. 2005. 110-115.Print.

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