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IMPLEMENTING STRATEGIC

MANAGEMET
Apple Inc.

[DATE]
ADNAN
Table of Contents
COMPANY BACKGROUND: ............................................................................................................................ 2
OVERVIEW:.................................................................................................................................................... 3
VISION: .......................................................................................................................................................... 4
PROPOSED VISION STATEMENT: ............................................................................................................... 4
Mission Statement ........................................................................................................................................ 4
MISSION ANALYSIS: ................................................................................................................................... 5
GOALS: .......................................................................................................................................................... 5
OBJECTIVES: .................................................................................................................................................. 6
CORPORATE GOVERNANCE: ......................................................................................................................... 8
ORGANIZATIONAL STRUCTURE: .................................................................................................................... 9
BOARD OF DIRECTORS: ........................................................................................................................... 11
TOP MANAGEMENT: ............................................................................................................................... 11
COMPETITIVE PROFILE MATRIX: ................................................................................................................. 12
EXTERNAL FACTOR EVALUATION FOR APPLE: ............................................................................................ 13
INTERNAL FACTOR EVALUATION: ............................................................................................................... 14
SWOT MATRIX:............................................................................................................................................ 14
SPACE MATRIX: ........................................................................................................................................... 15
BOSTON CONSULTING GROUP MATRIX:..................................................................................................... 16
INTERNAL EXTERNAL MATRIX: .................................................................................................................... 17
PORTER’S FIVE FORCES MATRIX: ................................................................................................................ 18
GRAND STRATEGY MATRIX: ........................................................................................................................ 18
QSP MATRIX: ............................................................................................................................................... 18
STRATEGY FORMULATION: ......................................................................................................................... 19
RECOMMENDED STRATEGIES: ................................................................................................................ 20
MARKET DEVELOPMENT: ........................................................................................................................ 21
COMPANY BACKGROUND:
Apple Inc. is a technology company, which designs, produces and sells goods of the Computer, Music
and Mobile-phone Industries. It is differentiated by its brand-perception and identification. Over the last
couple of years, Apple has become a cult-brand, thanking it’s iLife, iTunes, QuickTime and iMac lines.
Apple Inc.’s short-term goals is currently increasing the sales of the just launched iPad (the most
innovative web=browser in market). In the long-run, Apple aims for the top of the market, becoming the
number one leader. Apple Inc. has incorporated numerous features that are unique and well known in
the market today. We consider that there are several Apple products with several appealing features
such as: iMac, iPod, iPhone and iPad. These products represent a revolutionary era for the development
of Apple. By placing such products in the market, Apple Inc. has attracted a lot of customers in one way
or another. Highly advanced technology, simplicity and design, and the sense of luxury are the main
features integrated in these products. Moreover the comfort and convenience that these products
provide are very crucial. ‘Think Different’ One of the main reasons which inspired me to choose Apple
Inc. is its unique, simple and luxurious image that Apple has created in the market over the years. ‘Think
differently’ which is an inspiring motto, made us believe that simplicity and creativity combined with
luxury can lead to a successful and profitable company, such as Apple. Another component that we
found to be challenging for us was to understand Apple’s goals, objectives and their secret of being
successful. A very important fact about Apple products today is that these products are globally spread.
This has created among us the idea that Apple products are no longer luxuries but real necessities due
to the technological developments. Moreover, what has motivated us most to select Apple Inc., is the
way we relate ourselves with its products. Each of us being an Apple consumer has built trustworthiness
relationship with the products that this company offers. Owning an iPod or iPhone today definitely will
make your life easy and simple. As mentioned above, 2010 came with the launching of the iPad, which is
a totally differentiated product in the market. It is a web-browser, which also can be used as laptop, and
can be useful in every aspect of educational and professional areas. Its price, compared to regular Apple
prices, is pretty affordable ($499), which is an incentive for more buyers to purchase. This is the main
goal of Apple in the current day.
OVERVIEW:
According to (OPPapers, 2012).Apple Inc is an American multinational organization located in 1 infinite
loop, Cupertino, California 95014, in the middle of the Silicon Valley. It is focused on designing and
developing the personal computers, other related software products, and the electronic products such
as MP3 players and iPods. Apple Inc’s main products are iMac, iPod, iPhone, and its latest advanced
product is iPad, which is on the verge of creating another revolution after iPhone. Apple Inc was
founded in 1976 and since then Apple Inc has been leading the way in innovating new products,
however it has encountered numerous ups and downs since then. Apple Inc produced the first ever
extremely successful personal computer. It has been always on the forefront of innovating new
products; however it has often struggled to maintain the hold on the market share in the product line.
Lately, Apple Inc has transformed its image from an inventive computer manufacturer to a fully-fledged
consumer’s electronic company. Some facts of its success can be calculated from its sales of $13.95
billion in the year 2005. In year 2005, Apple Inc had controlled 4.2% of the US market in PCs. Also, Apple
iPods models had controlled 70% of the hard drive MP3 player market. Apple Inc enjoys the leading
share in the handset market, generating over 71% of the industry’s profit with 6.5% of the international
handset market. Apple unveiled its first iPhone on 9th January, 2007. The most recent iPhone, is iPhone
4S, and it was announced on 4rth October, 2011 and was released 10 days later.

However, according to (Scribd Inc., 2013) Apple has to be one of the greatest success stories of all time.
The beginnings of Apple started with Wozniak assembling a simple built computer machine. It was in the
summer of 1971 Wozniak 21 and Jobs 16 were introduced to each other by a mutual friend Bill
Fernandez. Wozniak had shown Jobs his simple built computer machine and this impressed Jobs to the
point Jobs believed he could sell it for a profit. It was here they would form a strong friendship because
they not only shared a passion for computers, but because they were both known as outcasts and for
the first time they had a great understanding, admiration and respect for each other’s abilities,
personality and intellect. They would begin the Apple project by selling some of their possessions:
Wozniak's HP scientific calculator and Jobs' Volkswagen, they raised $1300 and assembled their first
prototypes in Jobs bedroom. When the project became too big for the bedroom they moved the project
into Jobs family's garage, it was on a huge wooden work bench that served as their first manufacturing
base. The computers were hand built by Wozniak and first shown to the public at the Home brew
Computer club. After selling a number of the machines Apple was established on April 1, 1976 and went
public on December 12, 1980. Apple has maintained its great success with its ability to understand what
the consumer wants before the consumer even knows what they want; Apple effectively creates wants
by their constant creative innovation and unique design which is stylish, user friendly and affordable.
They have also been able to create a brand in the high technology world just as Chanel has in the fashion
world. People can easily recognize an apple whether it's the I-Pod, the I-Phone, the Mac Air or the I-Pad.
It has become a product that defines one's identity in how they desire to be seen by society that is a
person who is highly innovative, intelligent, stylish and apart of the in crowd. This is pure marketing
genius. This marketing genius of Apple has seen this company outperform beyond the business world's
expectations. While so many companies are struggling to break even in the current recession Apple is
getting stronger by the day. Apple’s Most Successful Products and Services iPhone 4, iPad&iPad 2,
iPhone, iTunes, PowerBook G4, iPod, OS X, iMac, Quick time, Mac, Apple II. PRODUCTS and SERVICES
Apple Store, Mac, iPod, iPhone, iPad, iTunes. Other Products and Services Desktops, Xserve, Notebooks.

VISION:
It is especially important for managers and executives in any organization to agree on the basic vision
that the firm strives to achieve in the long term. A vision statement should answer the basic question,
‘What do we want to become?’ A clear vision provides the foundation for developing a comprehensive
mission statement (David, 2011) a. Vision Statement of APPLE ‘Man is the creator of change in this
world. As such he should be above systems and structures, and not subordinate to them.’

PROPOSED VISION STATEMENT:


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 doesn't simply make a statement. It lives it by ensuring that its employees understand the vision
and strive to reach it. It has put systems in place to enable smooth customer interaction. It has put
objectives in place to continuously move forward; implemented strategies to fulfill these objectives; and
ensured that the right marketing, financial and operational structures are in place to apply the
strategies.

Mission Statement
APPLE ‘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 reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently
introduced its magical iPad which is defining the future of mobile media and computing devices.’
MISSION ANALYSIS:
According to (Study mode, 2013) apple is mainly focusing at the following components of mission
statement:

1. Apple may not be important to elaborate on its concern for its employees or to thoroughly outline its
customers and targeted market. Apple is a trendy technology company which prides its self in providing
easy to use electronics and efficiently run software systems. Because of this it is most important for
Apple’s mission statement to focus on components like company philosophy, self-concepts, and current
technologies. These aspects of Apple are what make it popular and successful today.

2. Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the
personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in
innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife
and professional applications. Apple is also spearheading the digital music revolution with its iPod
portable music players and iTunes online music store.

3. Apple’s mission statement only includes descriptions of products and services and past and present
technologies.

4. The mission statement from Apple is somewhat unconventional. It’s more of a brief history rather
than a summary of the corporations overall purpose. It does however paint a picture of where Apple
came from, how far it has come, and where it’s continuing to go. But for such a popular company it may
be beneficial divulge into points like its self-purpose and their concern for public image.

5. Values as stated in (apple investor, 2012) Apple Values are the qualities, customs, standards, and
principles that the company believes will help it and its employees succeed. They are the basis for what
they do and how they do it. Taken together, they identify Apple as a unique company. These are the
values that govern Apple’s business conduct: Empathy for Customers/Users
aggressiveness/Achievement Positive Social Contribution Innovation/Vision

GOALS:
Current Goals of Apple Inc. "The ultimate goal is to power all Apple facilities entirely by renewable
energy."

Past Goals of Apple Inc. To make good products.


OBJECTIVES:
When a company has established its marketing mix and began to understand its plan for the four P’s:
product, place, price, and promotion. It must then incorporate objectives and strategies for what the
company aims to do and how it will reach its goals. Apple Inc., a market leader in the technology market
is great at marketing and branding their products but it does not come easy. It’s all about your action
plan for meeting and accomplishing your objectives.

Product

Apple offers premium products at premium prices while still maintaining large market share and high
profit margins.

Objective 1- Continue to create groundbreaking products. Apple has made a name for itself becoming a
trend setter in the market with every one of their products introducing something new and exciting to
the world.

Strategy- To create groundbreaking products Apple will need to have a great team building culture along
with a strong research and development team. Too they will have to operate with a sense of no
complacency and not let current success limit future potential.

Objective 2- Innovate and dictate the movement for future technology

Technology is forever changing and even the biggest companies can get left behind. The consumer will
always buy the next big thing and brand loyalty is hard to come by. This is why Apple must continue to
lead the serge of the innovative world.

Strategy- To continue success of having the best products, Apple must study the market to understand
what consumers want next while improving their current products from listening to customer feedback.

Place

You can find an Apple product in most areas of the world and that is certainly the overall goal for global
business. However where there is product demand there must be supply.

Objective 1- Expand nationwide chain of Apple stores globally.

The Apple store accounts for the majority of the company’s sells. Therefore there must be more stores
to increase sells substantially.
Strategy- Begin placing stores in all large markets and expand outward based on population and
demand of products.

Objective 2- Make products available in every other possible retail channel, ex. Online, Big Box retailer

Even though the Apple store leads in sells, Apple must make sure it’s products are accessible to every
consumer since their demand is so high.

Strategy- Place products in every retail store that carries electronic devices, all e-commerce web sites,
and make sure mobile devices are featured on every large mobile carrier.

Price

With every premium branded product there will come a premium price. It’s to be expected that the big
name brands that present superior quality will bring the highest price.

Objective 1- Enter and sustain premium pricing while attempting to gain market share.

As long as their products are cutting edge consumers will have no problem paying more for them. It’s
important this trade off does not subside in order for the premium pricing to be sustained.

Strategy-Strategically price all products at the top of the market base price relying on brand and quality
to offset the price differential.

Objective 2- Increase profit margins.

Even with a high or low share of the market it’s your margins that make or break you. Apple has great
margins but a low market share across the board due to competitors low price points.

Strategy- Continue push to lower cost to make products while sustaining the same retail price in the
market.

Promotion

Building a brand may be the toughest challenge in all of business. To start at absolutely nothing and
build something that persuades millions of consumers to buy your products. Success like this is not built
without excellent marketing and promotion strategies which Apple has certainly demonstrated they
have.

Objective 1- Build hype and anticipation for new upcoming products.


No better promotion than getting consumers to anticipate your next release. Every great product’s next
version will always do great despite its functionality based solely on the anticipation from its previous
version. Ex: If you liked the iPhone 5 why would you not like the 5S with newly added features and
design?

Strategy- Use annual conference and events to announce release and information on each new product
before it hits the market. This allows the consumer to build a demand for the product before it ever hits
the shelf.

Objective 2- Sustain and expand on strongly branded name.

There is no bigger name in the tech world and it can only get bigger as we go. Apple has changed the
way we look at phones and tablets. Who says the word tablet anymore, most associate the device with
iPad.

Strategy- Be a trend setter, enter new product markets before competition, and deliver current
products at an unreachable standard of quality.

If they continue to set trends, enter new product lines and take their share of the market they will not
only build their brand they will dominate the competition.

CORPORATE GOVERNANCE:
As part of its plan to add two additional independent directors, Apple announced the addition of former
United States Vice President Albert Gore Jr. to its board. Mr. Gore was elected at Apple’s board meeting
yesterday. Apple has commenced a formal search for a second independent director, which the
Company hopes to add before the end of the summer. With the addition of the second independent
director, five out of seven Apple directors will be independent under SEC and NASDAQ rules.

Apple’s Board of Directors has expanded the role of its independent Nominating Committee to include
corporate governance as the new Nominating and Corporate Governance Committee, and has expanded
the role of its Audit Committee in accordance with the Sarbanes-Oxley Act and proposed SEC and
NASDAQ regulations. These two committees are chaired by independent directors and staffed by a
majority of independent directors.

Apple’s Board of Directors also approved two measures to reduce the Company’s issued stock options as
a percentage of total options and shares outstanding from the current level of 23 percent to 16 percent.
The first measure is a voluntary employee stock option exchange program which allows the Company’s
employees who are not executive officers and hold options with exercise prices at or above $25.00 to
exchange them for a lesser number of new stock options priced at fair market value six months and one
day after their existing options are cancelled. The second measure is for Apple CEO Steve Jobs to
voluntarily exchange his 27.5 million stock options for a new grant of 5 million restricted shares that will
vest on the third anniversary of the grant. Together these measures are expected to return a net total of
over 32 million options back to the Company, which represent almost 7 percent of the total options and
shares currently outstanding.

In addition, the Board approved cancelling the Company’s non-shareholder approved option plan upon
the completion of the employee exchange program and shareholder approval to amend the remaining
shareholder-approved executive officer stock plan so it can be used to grant options to all employees.

“This is a good day for Apple’s shareholders—they will have even more independent representation on
their Board, the addition of a terrific new director in former Vice President Al Gore and a reduction in
issued stock option overhang from 23 percent to 16 percent,” said Steve Jobs, Apple’s CEO. “Apple
makes the best personal computers in the world and there is no reason why it shouldn’t be among those
companies with the best corporate governance in the world.”

ORGANIZATIONAL STRUCTURE:

Fig1: Organizational structure of Apple


Apple’s organizational structure is one of the factors contributing to the company’s successful
innovation. A firm’s organizational structure can create opportunities for business growth. However, it
can also impose limits on how the firm develops. In Apple’s case, the organizational structure is mainly a
traditional hierarchy, with some key elements from other types of organizational structure. The success
of the company is linked to innovation and the leadership of Steve Jobs, but its organizational structure
is partly responsible for ensuring support for such leadership. Now, under Tim Cook’s leadership, Apple
has made some small changes in its organizational structure to suit market and industry demands.

Apple’s organizational structure is effective in supporting business performance to ensure leadership in


the industry. However, further changes in this organizational structure can help improve Apple’s
capabilities, especially in the area of rapid and creative innovation and design.

Apple’s organizational structure enables the firm to continue innovating rapidly. The creation of new
products like Apple Watch is linked to the support from the firm’s organizational structure. The
following are the most significant characteristics of Apple’s organizational structure:

Spoke-and-Wheel Hierarchy:

A bird’s-eye view of Apple’s organizational structure shows considerable hierarchy. In the past,
everything went through Steve Jobs’ office. Jobs made all the major decisions. However, under Tim
Cook’s leadership, this hierarchy in Apple’s organizational structure has slightly changed. There is now
more collaboration among different parts of the company, such as software teams and hardware teams.
Apple’s vice presidents have more autonomy, which was almost absent under Jobs. Thus, the company’s
organizational structure is now less stiff, but still has a spoke-and-wheel hierarchy where Tim Cook is at
the center.

Function-Based Grouping:

The upper tier of Apple’s organizational structure has function-based grouping, which is an element
derived from the functional type of organizational structure. Each senior vice president who reports to
Tim Cook handles a business function. For example, Apple has an SVP for industrial design, an SVP for
marketing, and another SVP for retail. In this aspect of the organizational structure, Apple’s top leaders
address business needs in terms of function areas.

Product-Based Grouping:
The lower tier of Apple’s organizational structure has product-based grouping, which is an element
derived from the divisional type of organizational structure. Below the senior vice presidents, there are
many vice presidents for different outputs or products. For example, Apple has a VP for iOS apps, a VP
for iPad, and another VP for consumer apps. This aspect of the organizational structure enables Apple to
address specific products or product components.

BOARD OF DIRECTORS:
 Arthur D. Levinson, Ph. D.
 James A. Bell. Former CFO and Corporate President. ...
 Tim Cook. CEO. Apple.
 Albert Gore Jr. Former Vice President of. The United States.
 Robert A. Iger. Chairman and CEO. ...
 Andrea Jung. President and CEO. Grameen America, Inc.
 Ronald D. Sugar, Ph. D.
 Susan L. Wagner. Co-founder and Director.

TOP MANAGEMENT:
Next on the line of the apple management hierarchy, second only to the BOD, is a chain of
executives managing the company. The list of executive positions in this tier of management
includes-

 Chief Executive Officer


 Senior Vice President, Retail & Online Stores
 Senior Vice president, Internet Software & Services
 Senior Vice President, Software Engineering
 Chief Design Officer
 Senior Vice President & CFO (Chief Financial Officer)
 Senior Vice President, Hardware Engineering
 Senior Vice President, Worldwide Marketing
 Senior Vice President and General Counsel
 Senior Vice President, Hardware Technologies
 Chief Operating Officer (COO)
The CEO and the Senior VPs are all directly answerable to the board of directors. But there is a point
of difference between the CEO and the Senior VPs in the list of executives, which is, the Senior VPs
are also liable to report to the CEO; even though they are all in the top tier of management.

COMPETITIVE PROFILE MATRIX:


The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and its particular
strengths and weaknesses in relation to a sample firm’s strategic position (David, 2011). a. CPM for
APPLE Inc. Fig:2 Showing CPM for APPLE Inc.
Fig 2: CPM for Apple

EXTERNAL FACTOR EVALUATION FOR APPLE:


External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate economic,
social, cultural, demographic, environmental, political, governmental, legal, technological, and
competitive information (David, 2011).
Fig 3: EFE for Apple

INTERNAL FACTOR EVALUATION:


Summary step in conducting an internal strategic-management audit is to construct anInternal Factor
Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and evaluates the major strengths
and weaknesses in the functional areas of a business, and it also provides a basis for identifying and
evaluating relationships among those areas.

Fig 4: IFE for Apple

SWOT MATRIX:
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is an important matching tool that
helps managers develop four types of strategies:
SO (strengths-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths-
threats) Strategies, and WT (weaknesses-threats) Strategies (David, 2011).

S-O Strategies

• Increase awareness through the web of the immunity of Mac products to worms and viruses. (S5, O1)
• Advertise using individuals that will link Generation X & Y to the iTunes and other related products.
(S1, O2, O4, O5, O6)

• Using movies and music groups that are geared towards Gen X and Y to promote computers and
laptops. (S3, S5, O2, O5, O6)

S-T Strategies

• Increase and promote the compatibility to Window operating system. (S5,T1)

• Promote the originality of Apple computers and the different style and stable system that is slightly
more but worth the price difference in style, stability and speed. (S2, S5, T2, T4, T5)

W-O Strategies

• Increase ties with Microsoft and Intel and their products.(W1, W2, W4 O2, O3)

• Promote to business the safety of having a worm and virus free computer by using Mac. (W2, W4, O1,
O5, O6)

W-T Strategies

• Improve relationship with Microsoft and Intel so that companies will see them as compatible. (W1, W2
T1)

• Increase productivity and turn-around of high demand products to compete with Dell and HP (W5, T2)

SPACE MATRIX:
The Strategic Position and Action Evaluation (SPACE) Matrix The Strategic Position and Action Evaluation
(SPACE) Matrix is four-quadrant framework indicates whether aggressive, conservative, defensive, or
competitive strategies are most appropriate for organization. The axes of the SPACE Matrix represent
two internal dimensions (financial position [FP] and competitive position [CP]) and two external
dimensions stability position [SP] and industry position [IP]). These four factors are perhaps the most
important determinants of an organization’s overall strategic position (David, 2011).

Fig 5: SPACE MATRIX for Apple

BOSTON CONSULTING GROUP MATRIX:


BCG Matrix When a firm’s divisions compete in different industries, a separate strategy often must be
developed for each business. The Boston Consulting Group (BCG) Matrix is designed specifically to
enhance a multidivisional firm’s efforts to formulate strategies (David, 2011).
Fig 6: BCG Matrix for Apple

INTERNAL EXTERNAL MATRIX:


The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organization divisions in a
schematic diagram; this is why they are both called “portfolio matrices.” (David, 2011). The Grand
Strategy Matrix has become a popular tool for formulating alternative strategies. All organizations can
be positioned in one of the Grand Strategy Matrix’s four strategy quadrants. A firm’s divisions likewise
could be positioned (David, 2011).

Fig 7: IE Matrix for Apple


PORTER’S FIVE FORCES MATRIX:
Porter’s Five-Forces Model of competitive analysis is a widely used approach for developing strategies in
many industries. The intensity of competition among firms varies widely across industries (David, 2011).
a. Porter’s Five Forces Model for APPLE Inc. Porters Five force Model is a very powerful tool to
understand the core of the power in a business or in a company. The Porter Five Force Model for Apple
Inc. is shown below.

Fig 8: PORTER’S FIVE FORCES

GRAND STRATEGY MATRIX:


The Grand Strategy Matrix has become a popular tool for formulating alternative strategies. All
organizations can be positioned in one of the Grand Strategy Matrix’s four strategy quadrants. A firm’s
divisions likewise could be positioned (David, 2011).

QSP MATRIX:
The Quantitative Strategic Planning Matrix (QSPM), which comprises Stage 3 of the strategy formulation
analytical framework. This technique objectively indicates which alternative strategies are best (David,
2011).
Fig 9: QSP Matrix for Apple

STRATEGY FORMULATION:
In order to suggest possible strategic options for Apple, the framework of generic strategies are used.
The possible strategy to be followed by Apple is highlighted in ‘Table 1: Generic Strategic Framework’
below.

Applying the framework above, it is found that Apple shall not follow any options of the low cost
strategy, as the key competitive advantage of Apple is about delivering best users’ experiences, quality,
cutting-edge, innovative products that are selling at a premium price. Thus, it is crucial for Apple to
capitalize on its existing competencies/ strengths for growth of the firm. As the electronics industry are
divided into several sub-market segments, it is then important for Apple to target each of these
segments separately. To perform this, a focus differentiation strategy will be best suited for the firm,
whereby Apple should continuously drive products innovations and trends in the following markets, (a)
personal computer, (b) personal media player, and (c) smart phones.

Apart from that, by referring to the discussions mentioned from external and internal analysis above,
other possible strategic options that can be taken include: (a) focus on succession planning, (b) expand
to White Space in the industry (e.g., delivering innovative with integrated functions and capabilities), (c)
focus expansion in emerging countries, (d) expand products portfolio to cater for niche market currently
not being served by Apple.

RECOMMENDED STRATEGIES:
1. Open six computer retail stores (not just peripheral and accessories). Apple currently has stores
opened throughout the United States with only peripheral and accessories for their computers.
Adding the hardware should generate more hands-on awareness and use already established
locations. This will increase product accessibility for those who wish to view items other than
just accessories and increase awareness of the originality of Apple’s products. 2 percent increase
over the next 2 years in sales representatives for the computer hardware.
2. Contract music spokesperson to attract the upcoming generation who are attending high school
and college. This will invoke a sense of style and linking apple with a distinctive and memorable
top 10 hit. This will stay in the customer’s awareness and influence future purchase decisions.
Contracting one music spokesperson estimated $6 million.
3. Add more features to current products for greater Wintel compatibility. Features such as iTune
software compatible with windows based computers, Office programs loadable from PC
installation disk (This would require a software agreement with Microsoft). In late October 2003
Apple released an iTune software package that is PC ready. It will increase the United States
market share at least 30 percent for the next 2-3 years. $50 million is the estimated cost for
Research and Development.
MARKET DEVELOPMENT:
Apple uses market development as the least significant of its intensive strategies for growth. Market
development involves creating new markets for new products or entering entirely new markets. This
intensive growth strategy is similar to market penetration, but market development focuses on
establishing presence in new markets. Apple applies this intensive growth strategy by authorizing
new sellers in markets where the company does not have any presence yet. Thus, this intensive
strategy applies mainly in developing markets. Also, Apple implements the market development
intensive growth strategy through novel products. For example, the company innovates to offer
goods like Apple Watch, which is an entirely new product line for the firm. Through Apple Watch,
the company develops its reach in the smart watch market. This intensive growth strategy agrees
with Apple’s generic strategy of broad differentiation by expanding the company’s market reach.
Such generic strategy requires that unique products should be offered to different market segments,
which the company reaches through market development.