Apple’s Macro and Competitive Environment

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Table of Contents

Introduction
Conducted experiments
The impact of media exposure
Justified Recommendations for the Marketing Program Elements
Conclusion
References

Introduction

The aim of this report is to explain the company’s product/brand’s macro and competitive environment through the use of PESTEL and SWOT analysis of the businesses. In addition, the report details the 7Ps of marketing that the company applies currently including, people, product, price, promotion, place, process, and physical evidence. Finally, it gives a clear evaluation of justified recommendations for the marketing program elements, which the company should apply for its success in business strategies.

Background of the Company

The company was initiated as “Apple Computer” in 1976 (Shimp, 2007, p. 7). It started on a high note with stable brand, high profit rate and rapid growth, before experiencing the worst periods, which led to the decline in its profitability. After the decline in business, one of the company’s founders called Jobs, embarked on the reconstruction of the company. This made the name changed to “Apple Inc” in 2000, where the focus was on sophisticated technology and innovation of non-PC products (Shimp, 2007, p. 8).

The company designs, manufactures electronics and many other software products. Some of the company products include the iPhone, iPod and Macintosh (Shimp, 2007, p. 8). As well, the software includes Mac OS X, Final Cut Studio, iLife, and iTunes browser (Shimp, 2007, 9).

Comparing iPhone4s with Blackberry and Nokia

In terms of features, the iPhone4s displays a number of features. For example, the phone has a high resolution retina display, two cameras strategically positioned at the back and front of the phone, multi-touch display, A4 processor, gyro, and accelerometer (iPhone 4 Apps Developer, 2010, p. 1).

Moreover, the feature are user friendly making many people prefer the phones. Blackberry, on the other side has several features including speakerphone system, high speed trackball and wireless data, broadband EV-DO, full keyboard, and Bluetooth among others (Cell Phones, 2012, p.1). As well, Nokia Phones have excellent features such as Bluetooth connectivity, speakerphones, wireless data, and digital camera among others (Cell Phones, 2012, p. 1).

Conducted experiments

The Product/Brand’s Macro and Competitive Environments

The PESTEL analysis

This involves the analysis of political, economic, social, technological, environmental, and legal issues affecting the operations of the company.

Political Analysis

The company designs, comprehensively develops and market many products in the mobile telephony industry (Zanoni, 2011, p. 39). The company’s consumers cut across the diverse groups of people, including education, creative professionals, government, and business consumers. Identifying the different groups that the company serves, and managing them is a political process that threatens its existence (Zanoni, 2011, p. 39). For example, diversity was viewed as the cause of the problems, which befell Apple Company during its operation.

Economic Analysis

In 2005, the company opened many retail outlets, reaching about 102 in number with an aim of increasing the income level (Zanoni, 2011, p. 39). Though the initiative was beneficial, not all the stores could survive so that the company realizes its potential. As well, it made the company to face cannibalization, thereby leading to low sales and subsequent economic crisis that affected the company’s operation.

Social Analysis

Noting that the company has huge capital base, it increased the corporate social responsibility initiatives to give back to the people (Zanoni, 2011, p. 40). This would also make sure that the company familiarizes itself to the communities and globally.

Technological Analysis

In essence, the company is based on the technological innovation and creativity of the workers. It invests in the workers’ creativity and innovativeness since it was the founders’ talent that led to its creation. In this regards, the company relies heavily on technology advancement to manufacture most of their products (Zanoni, 2011, p. 40).

Environmental Analysis

The company is keen on environmental protection so that its operation could prolong. The environmental consciousness of the company is to make sure that the process of manufacturing becomes sustainable (Zanoni, 2011, p. 40).

Legal Analysis

The company obeys the legal framework under which it operates. Indeed, the company has the necessary licenses, which the government outlines for such manufacturing industries (Zanoni, 2011, p. 40). Apparently, following the outlined rules ensures that the operation takes place without the government interference.

In line with the PESTEL analysis, the company benefits from competitive advantage that it has over its competitors, thus making it realize high profits (Errigo & Zempol, 2011, p. 42). Noting that the company focuses on design of the products and technological innovation, it has greater vertical and horizontal integration.

The company designs are developed from scratch to the finished products. The finished products are tested and compared with the available brands to note if there is some significant difference (Errigo & Zempol, 2011, p. 46). For example, the ‘plug and play’ product was a direct result of research and development of the company.

Through the products differentiation and innovation of technologically advanced products, Apple Company has a large command of the world market share, thus able to realize high returns. It also enabled the company to leverage many workers who are directly involved in the manufacture of iPhone, iWorks, iPod and iTunes products, which have influenced many potential users (Errigo & Zempol, 2011, p. 49).

Over a long period, the company has started many activities, which are intended to improve innovation of other prime products that the customers would easily opt to identify with. Therefore, it takes an initiative to design some of the excellent new products (Kotler & Armstrong, 2009, p. 96). The other prominent issue is the high rivalry that characterizes the PC manufacturing sector and the low cost of switching to this production.

The SWOT Analysis

As an electronic company, it faces a lot of challenges during operation, ranging from technical to managerial aspects. Therefore, the detailed SWOT analysis is presented as below.

Strengths

The company draws its strength from the fact that telecommunication is gaining popularity among the people. With increase in technology, many handset companies have inclined their operations towards the manufacture and distribution of smart phones, which Apple Company is not left out (Kotler & Armstrong, 2009, p. 96). Indeed, it gives the company its strength in doing the business.

The company also draws its strength from the competitive advantages it has over the main competitors such as Nokia. It achieves this through fair pricing of the products and offering high quality handsets, which are competitive for current business world (Belch & Belch, 2009, p. 14).

The company also has unique selling points, which allow it to reach the intended consumers. Notably, such selling points include the wholesales and retail outlets that help in distributing the products.

The company also draws its strengths from its resource base. Here, the company has many assets and stakeholders whose contribution to the company success is significant (Belch & Belch, 2009, p. 15). The company’s employees are experienced, knowledgeable and have dependable data that enhance the business operations. In addition, the experienced staff and the marketing team create enough room for staging sales promotion in a bid to popularize the products among the consumers and the public (Belch & Belch, 2009, p. 15).

The company also promotes innovation among the employees, thus making them contribute to the efficiency in its operations. Indeed, the aspects increase the company strengths, making it able to compete favorably in the market.

Weaknesses

The company has some notable gaps in its capabilities, making it unable to compete favorably with the others. Indeed, the occurrence poses a very big challenge to the operations. Moreover, the company has its own vulnerabilities, which interfere with internal operations (Belch & Belch, 2009, p. 16). They include timescale, work pressure, strict deadlines, start-up cash-drain, problems of continuity, and robustness of the supply chain among many others.

Sometimes, the company data and plan might not be reliable or predictable respectively, making it difficult for the business to operate optimally (Belch & Belch, 2009, p. 17). Probably, this could be attributed to low morale, lack of commitment to the work and poor leadership exhibited by some managers.

Similarly, the processes and systems that the company uses are complex, making it difficult for some employees to cope within a very short time. Such systems, problems of succession and the management cover contribute to the weaknesses of the company and its operations (Belch & Belch, 2009, p. 19). Notably, the manner in which the company resolves the crises and manage its weaknesses would eventually strengthen its operations.

Opportunities

The growing demand for the smart handsets, increase in technological innovation and development present the opportunity for the company. Additionally, the possibility that is evidenced in the market development and the competitors’ vulnerability are some of the opportunities for the company to exploit (Kotler & Armstrong, 2009, p. 106).

In another argument, the changing lifestyle trends of the people and the global influences in adopting technology present a lot of opportunities for the company. These create new markets, which are either vertical or horizontal in nature. Moreover, the niche market that the company targets is growing and has the purchasing power to acquire the products.

Geographically, the company exports most of the products to the international market, thus increasing its sales and global prevalence (Kotler & Armstrong, 2009, p. 113).

Furthermore, the company encourages partnerships with its stakeholders, including the distributors, wholesalers and retailers as an opportunity for growth (Kotler & Armstrong, 2009, p. 114). Finally, the increase in volume of trade and demand trend towards the smart phones has raised the opportunity for growth in the company.

Threats

As other forms of business, the company faces numerous threats that originate from inside or outside the organization. Among the threats include political, legislative and environmental effects (Kotler & Armstrong, 2009, p. 106). Apparently, the political forces, factions and crisis in the country could pose imminent threat to the existence and business operation in the company. There are also the government laws, which threaten the company operations. On environmental issues, the physical, economic and social aspects of the company affect its business.

The other threat includes the development of Information Technology as it might give the competitors an edge over the others. Here, the competitors may decide to introduce varying technological ways of improving on the quality of their products and increasing trade (Kotler & Armstrong, 2009, p. 117). With high living standards, many people are opting for cheaper products, leading to low demands. In fact, the reduced demand threatens the business operations in the company.

As the competitors advance in the use of new ideas and advance technologies, they might produce gadgets with sophisticated features, which might threaten the products of Apple Company. There are other obstacles and insurmountable weaknesses in executing the business that the company has to take into account. They include employment market, credit and financial pressures, domestic and international economic trends, seasonality and the effects of weather (Kotler & Armstrong, 2009, p. 121).

Concerning the issues related to competition, the company faces stiff competitive environment from Blackberry and Nokia. The two companies have invested a lot in technological development making them to manufacture goods of high quality and highly sophisticated to meet the consumer demand regionally and around the globe (Kotler & Armstrong, 2009, p. 123). Importantly, competition is healthy as it assures the consumers of best quality of the products.

Another threat is the group of entrants whose impacts have been felt in the pricing of products. For instance, the entrants bargain the prices at low levels making the competition very difficult for the company (Kotler & Armstrong, 2009, p. 124). Since, the competitors are still new in the market with limited resource base and few workers, they are able to charge low and realize minimal profits, a situation that would lead to excessive losses in large corporations such as Apple.

The impact of media exposure

The Marketing Program Elements

The 7Ps of marketing that the company applies currently include, people, product, price, promotion, place, process, and physical evidence (Colin, 2011, p. 1). They determine the success of the business if well articulated. In business, the 7ps are called the marketing mix and are available to the authority managing the company affairs. Primarily, the marketing mix combines the product and service aspects, thereby making the 7ps (Kerin, Hartley & Rudelius, 2010, p. 19).

For the case of Apple Company, the marketing mix is considered in the situation of mobile phone marketing. The report outlines the various ways, in which the company has used the elements in improving the mobile technology and marketing plan for the business operations.

People

In reality, the people are the most important aspect of the marketing mix, an issue that the company had recognized. For instance, the use of mobile is capable of altering the dynamics, which surround those delivering the mobile service (Colin, 2011, p. 1). Additionally, the mobile apps might not necessitate one to make calls or converse with someone, but merely send short text messages to pass the intended message.

Product

Through improved mobile technology, the company has provided a means of manufacturing and delivering new and unique products, which are intended to match many other available products (Kerin, Hartley & Rudelius, 2010, p. 28). Besides, the purely new products are presumed to develop new business opportunities for the company. Some of the products they make are in line with the technological development, and are in form of mobile phones with optimized websites offering a variety of services including SMS (Colin, 2011, p. 1).

Price

Pricing of the mobile phones that the company manufactures is very significant in determining the overall sales volume. Typically, most of the products are below $5, while others are higher (Colin, 2011, p. 1). The price is determined by the durability and the inbuilt features of the mobile. Therefore, it means that the company might charge high rates on exclusive and premium products.

The company also appreciates the fact that the mobile apps are not for sales, thus giving them for free to advertise the products and attract the customers. Mostly they give such free apps to the prospective customers, who may be in turn willing to purchase the products, leading to high returns (Colin, 2011, p. 1).

Promotion

Carrying out promotion is one of the ways in which the company could create awareness on the products. For Apple Company, the mobile services provide them with many opportunities for doing promotion to sensitize the public on the products (Grewal & Levy, 2011, p. 10).

For example mobile subscribers interact with colleagues using text messages, mobile internet sites, MMS messages, mobile apps, mobile email, and chat systems (Colin, 2011, p. 1). Therefore, the company majorly uses the opt-in text system of messaging that is currently used in disseminating the so called marketing information that targets the mobile phone users.

Place

The company has created a new interaction place for their consumers so that the communication between them could be cordial, easy and with maximum efficiency (Colin, 2011, p. 1). With this system, the handset could be established in, or from the manufacturer’s stores and other outlets. For example, the Apples’ iTunes is one such place where the gadgets could be found. In addition, the growing need for internet technology has been exploited by the company to create a stable base for the production of more goods (Colin, 2011, p. 1).

Process

The issues relating to the process involve the channel through which the manufacturer follows in making its products and delivering the services (Colin, 2011, p. 1). It also outlines the various ways through which the customer should follow to receive the service. For the case of Apple Company, the management understands and outlines the other ways of making the customers have personalized knowledge about the mobile phones that the company offers.

Physical Evidence

Mostly, the mobile can offer numerous substitutes for purposes of offering physical evidence that is useful in quality service delivery. For example, the company used mobile ticketing, a service in which bar code, QR code or SMS message could be directly sent to the customers’ mobile phone (Colin, 2011, p. 1). This is a good option as the information would reach the intended destination promptly, without any form of distortion.

Justified Recommendations for the Marketing Program Elements

Ideally, using the marketing program elements mentioned above is justifiable and the report recommends them for a number of reasons. For example, people are the central factor of the marketing mix as they are the ones who engage on the production of goods and giving the service (Grewal & Levy, 2011, p. 11). Therefore, the company has to make sure that they meet people’s wishes, both the workers and the end users.

Secondly, the company should make sure that the products it makes adopt and adhere to the technological development, meaning that the final products should be in form of mobile phones with optimized websites offering a variety of services (Parente, 2006, p. 55).

Third, though the price is determined by the durability and the inbuilt features of the mobile, the company should make sure that their pricing is competitive in the market so that this could keep them in business. In fact, fixing the price at higher rates will eventually derail the services and might lead to the collapse of the business (Parente, 2006, p. 58).

Fourth, the company should enhance the interaction between mobile subscribers and other people using text messages, internet sites in mobiles, MMS messages, mobile apps, mobile email and chat systems (Scott, 2010, p.31). This would make promotion of the products to be easy. Moreover, they have to provide place that would promote this kind of interaction.

Furthermore, the process of making the products and delivering the services should be done in a way that increases efficiency. On physical evidence, the company ought to increase the use of mobile ticketing, a service in which bar code, QR code or SMS message that should be sent directly to the customers’ mobile phone (Scott, 2010, p. 34). Notably, the proposed initiatives could increase the market size and increase the company’s profitability.

Conclusion

In summary, it is important to realize that the technological innovation has propelled the company to greater heights of innovation. In this regard, the mobile phones no longer serve the purpose of making calls, but do a range of other activities including the products’ marketing. For instance, with the mobile phone, one might be able to send targeting short test messages (SMS), chart, browse, and make online transactions, among many other services to the main audience.

Precisely, the use of mobile phones has also revolutionized the telecommunication industry where the users have witnessed unprecedented and dramatic increase in the mobile services. Therefore, the company has fully applied the various options, which are available for integrating the marketing mix, or the 7P’s of marketing. When such marketing options are integrated to the mobile phones’ use and experience, the customers would be willing to buy more of the smart phones or handsets.

References

Belch, G. E., & Belch, M. A. (2009). Advertising and promotion: An integrated marketing communications perspective (8th Ed.). Boston, Mass: McGraw-Hill.

Cell Phones. (2012). Latest Blackberry Cell Phones – Specifications and Features. Web.

Cell Phones. (2012). Latest Nokia Cell Phones – Specifications and Features. Web.

Colin, C. (2011). The 7P’s of the Mobile Marketing Mix. Web.

Errigo, J. & Zempol, E. (2011). A Lean Marketing Revolution: The Timeless-Know How Principles. Kindle eBooks.

Grewal, D. & Levy, M. (2011). Marketing. New York, NY: McGraw-Hill.

iPhone 4 Apps Developer. (2010). Features of iPhone 4. Web.

Kerin, R., Hartley, S., & Rudelius, W. (2010). Marketing. New York, NY: Pearson.

Kotler, P. & Armstrong, G. (2009). Principles of Marketing (13th Ed.). New York, NY: Prentice Hall.

Parente, D. (2006). Advertising campaign strategy. A guide to marketing communication plans (4th Ed.). Mason, Ohio: Thomson/South-Western.

Scott, D. M. (2010). The New Rules of Marketing and PR. (2nd Ed.). New York, NY: Wiley.

Shimp, T. (2007). Advertising, promotion, and other aspects of integrated marketing communications. (7th Ed.). Mason, Ohio: Thomson South-Western.

Zanoni, A. (2011). Strategic Analysis: Processes and Tools. (Routledge Research in Strategic Management). New York, NY: Routledge.

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