Meeting Demand for Apple iPhones in the Global Mobile Market
Apple Inc. is a technological company dealing in a variety of products such as mobile phones, accessories, computers and laptops, music ,stores, and softwares. It has been in the technological industry for quite some time, led by its then legendary CEO, Steve Jobs. His demise, as expected, resulted to a change in guard at the helm, with Tim Cook taking the mantle. The initial speculation and uncertainty that encompassed Jobs’ demise has been well dealt with, by the able leadership of Cook (Lashinsky, 2011).
The mobile phone market is very large consisting of a few large players which include Apple, Samsung, Huawei, Xiaomi and Lenovo. In this report we are looking at how Apple met its consumer demand for the IPhone 6. At the end of the fourth quarter of 2014, Apple had a market share of 19.7% of the world Smartphone market (IDC, 2014). Apple mobile phone includes the use of the internet and multimedia services. It is an intelligent phone which integrates network, audio, and multimedia. In the first quarter of 2012, the number of global mobile terminal users was increased by 39 million and the growth increment was the best since the company started its operations. The growth of mobile terminal users across the globe is inseparable from the high-speed expansion of the domestic intelligent phone market. In the mobile internet era, driven by market demand, the terminal merchants improve their own product line layout, and the operators of terminal also input spare no effort, intelligent phone sales show explosive growth trend, and the market gradually develops on large-scale basis.
The major challenge which Apple faces is meeting the large demand for their IPhones. Apple’s supply chain model is not very complex and uses a producer driven approach to meet demand. It consists of 5 stages namely sourcing, manufacturing, warehousing, distribution and return. This paper mainly analyzes the market the marketing strategy of the world famous mobile phone brand Apple. Based on the growth stage of intelligent phone market, Apple’s iphone marketing model and marketing strategy are analyzed. Through the analysis of the present situation and marketing strategy of the Apple mobile phone, the paper points out the problems that Apple Inc. face in the domestic and global marketing.
Management Style and Structure
Apple Inc., like any other company, has its own management hierarchy and corporate structure that ensures efficiency within its ranks. It is headed by the CEO, currently Tim Cook, and then has a Board, shareholders and finally the employees. However, the distinctive organizational structure observed in this setup is quite contrary to the management technique in place. The employees, for example, are provided with ample free time in order to increase not only their productivity, but also make them love the Apple brand. This enhances loyalty to the cause of the company. The CEO is answerable to the board and the shareholders, who act to regulate him (Hamel, 2011).
Apple’s supply chain model is unmistakable from numerous others in the mobile phone and gadget technology sector. It is organized to give the organization most extreme perceivability and, vitally, control over the configuration and make-up of its items, even down to the minutest parts. After some time, the business has tried to build its control over its production network by putting resources into the assembling of its own parts and submitting substantial development requests to secure key supplies where required. In the latest advancement, Apple has gone on a professionals spending spree in Asia to enlist architects and store network administrators who may have the capacity to accelerate its item improvement.
The company has employed two main methods to increase its influence; joint ventures and acquisition. Joint venture is where a company decides to undertake a specific business with another company. The terms for such an agreement are all inclusive, encompassing profit or loss share. In joint ventures, apple usually takes up service provision such as consultancy, training or technical support. Acquisition is whereby a company fully takes over another company or a section of another company into its own control. Apple employs this strategy in order to maintain and further develop a competitive advantage (DailyFinance, 2010).
Production planning from forecasting
Apple sources raw material from a variety of countries that is United States, China, other Asian countries and Europe. They then ship these raw materials to China where the IPhone is then assembled. From there, the IPhones are shipped to consumers who buy IPhones from Apple’s online store, and for other distribution the IPhones are shipped to Apple’s only warehouse in California from where the IPhones are distributed to retail stores, their direct sales force and wholesalers.
It is true beyond any reasonable doubt that Apple’s brand marketing and innovation has helped the company to become an icon in terms of innovation and marketing (IDC, 2014). Apple has received lots of criticisms for pricing of its products, system integrations, and its consistency with leaving old hardware obsolete. Despite the fact that the company has received such criticisms from the public, at the end of the day, everyone will still ask what Apple does for it to continue succeeding and overtake its competitors ((IDC, 2014).
The key factor for Apple’s success in the global market is its innovation. Upon its launch of iphone in 2006, the company was not trying to compete or copy from any other company since by that time there was none. Since then, every other company that used to distribute hardware that had different features from those produced by Apple had to follow suit purposely to beat Apple in its own game. Today, such companies have only contributed to a small dent on Apple’s prosperity. The competition has always between Apple Inc. and the rest. Even though Apple is yet to take control of Smartphone industry, it is true beyond any reasonable doubt that Apple is the ‘father’ of most smart phones that are currently in the market (Apple, 2014).
The second key factor for Apple’s success is the style that it uses in designing its products, especially iPhones. Every product that bears Apple’s logo is termed to be a product designed with the highest quality and precision than its competitors in the Smartphone industry. The company designs its iPhones in the most simple and user friendly way. Even the simplicity of the product may not be appealing to everyone, but the professional user and the common user will always like the simplicity used in the design. Therefore, the attractive design of the product is an important factor (Examiner.com, 2013).
The third factor that has helped Apple to increase the demand of iPhones in the global market is quality customer service (Examiner.com, 2013). Customer service may look like an odd factor in this case, but it still remains a fact that just walking into any Apple retail store is a huge advantage (Apple, 2014). A customer may walk into a retail store but without any intention of buying anything, but will walk out more satisfied with kind of knowledge he will have gathered about the iPhones in the store. Good customer service plays an important in creating customer loyalty.
At the end of the fourth quarter of 2014, Apple had a market share of 19.7% of the world Smartphone market (IDC, 2014). The major challenge which Apple faces is meeting the large demand for their IPhones. Apple’s supply chain model is not very complex and uses a producer driven approach to meet demand. It consists of 5 stages namely sourcing, manufacturing, warehousing, distribution and return. Apple sources raw material from a variety of countries that is United States, China, other Asian countries and Europe. They then ship these raw materials to China where the IPhone is then assembled. From there, the IPhones are shipped to consumers who buy IPhones from Apple’s online store, and for other distribution the IPhones are shipped to Apple’s only warehouse in California from where the IPhones are distributed to retail stores, their direct sales force and wholesalers.
The supply chain network also handles returns by consumers which handles returns on warranty, Apple’s trade in program and recycle/reuse program (SupplyChainOpz, 2013). Apple’s IPhone targets a variety of customers, from adults to every member of the family, business people who use various applications available on the IPhone and it serves as an entertainment device for younger kids (Prezi, 2013). The IPhone has little variety on the different types; they include the IPhone 6 which comes with different memory size of 16 GB, 64 GB and 128 GB. The IPhone 6 plus has a slightly larger screen size and comes with the same variety of memory as the IPhone 6. Apple’s top three business characteristics which helped the company become successful are; innovation, style and customer service (Examiner.com, 2013). Just after the launch of the IPhone 6 and IPhone 6 plus, Apple sold an incredible 10 million units just 3 days after the launch (Apple, 2014), in order to meet these sales volume apple were running 100 production lines 24/7, 200,000 workers dedicated to the production of the IPhone 6 and 6 plus producing a total of 540,000 units daily of which 140,000 were IPhone 6 plus and 400,000 were IPhone 6 (Lovejoy, 2014). One of their main issues was to meet the demand apple had and this caused long lead times from when a phone was ordered and when it was delivered (Hughes, 2014).
Future opportunities and challenges
One of their main issues was to meet the demand apple had and this caused long lead times from when a phone was ordered and when it was delivered. Apple is doing all it can to expand its product line to include media and software in addition to hardware. However, as it tries to reach many different consumers rather than its traditional niche of “cult followers,” the tech-savvy consumers who work in different fields such as education and design, the company will find it more difficult to keep a positive brand image among all consumers. The technology and entertainment industries are rapidly changing. The big question has been whether Apple will be able to keep its reputation related to innovative design and continually launch products that will be the “latest hit” (SupplyChainOpz, 2013).
Competition has become extremely fierce in the technology sector, and Apple needs to be concerned not only about major competitors, but also startup companies. For example, in relation to the iPhone, GotVoice is a web-based company that allows subscribers to record voicemail messages in MP3 format and send those messages to their email account to view the subject line and the message length. This capacity rivals Apple’s Visual Voicemail on the iPhone, and the service is free unless users prefer to pay $10 to avoid ad pop-ups (Prezi, 2013). Interestingly, GotVoice has an advantage over Apple’s Visual Voicemail in that it works not only with cell phones, but also with home and work phones. It will be a challenge for Apple to maintain its competitive advantage in new product hardware and to create strong relationships with powerful suppliers of media and other services as well as GotVoice in software and other areas.
There is also stiff competition from products originating in China and Taiwan. The main reason for this increasing competition has been brought about by the rigidity of Apple’s supply chain management, which is quite bureaucratic at times. This is contrary to other companies, whose supply chain has been built upon a quick market entry, hence quick growth. The supply chain and roll out strategic model by Apple has been their mainstay, and actually a source of their immense success over the past decade, however, that is now subject to scrutiny and change, with the emergence of the new competitors (Williams, 2014).
Strategic launch planning
Apple has taken a step launching a new generation of iPhones in more countries across the globe. Taking different markets in different countries has led to two results: one is appearing gray in the country which is not listed; this has led to a reduction in consumers’ brand loyalty. The other is that it has helped in making customers easily think that Apple has unfair treatment to the different market, which affect the brand image. Apple has also listed itself on the new generation of the iPhone to choose as far as possible in more countries, and in the face of high demand market (Lovejoy, 2014).
Secondly, Apple has always been careful while setting its strategies. Apple is an enterprise which innovation drives the development, at present from the perspective of the product design and market reaction of the iPhone, using alone for strategy does not have a large impact on sales of its iPhones. Such a strategy cannot be used for a long time since its marginal utility is diminishing. Therefore, Apple has put a lot of emphasis and seriousness in choosing its strategy. To choose a stronger cooperation operator in meeting the demand of iPhones, Apple has tried to abandon this strategy in some in some markets and has chosen cooperation operators (IDC, 2014).
In summary, Apple Inc. has been one of the leading technological companies in the industry. A large part of this has been down to its products and a solid management structure. Its supply chain has been in place for quite some time, and has brought much of the success to date. However, this has proven to be a challenge as well, since the competing companies, especially those originating from Asian, have proven to have a supply chain that is based on rapid expansion. This has put pressure on the current structure at Apple, which is in a way, bureaucratic. The company has future opportunities and challenges. One of their main issues was to meet the demand apple had and this caused long lead times from when a phone was ordered and when it was delivered. Apple is doing all it can to expand its product line to include media and software in addition to hardware.It has strategies in place to improve these
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