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In evaluating a company’s competitive ability, one has to consider the effectiveness of the current strategy. Apple has managed to maintain high levels of profitability since the late 1990s. The company has been consistent in developing innovative products that captures its customer’s interests. The launch of the iPod, iPhone, and iPad in the market proves this. The company has realized increased sales in iPads and iPhones. However, sales for the iPod are declining (Marino & Gamble, 2010). This could be because customers can get the applications found on the iPod on the company’s other devices. Thus, they see no need of purchasing the iPod since the other devices have additional features. The company has a strong overall performance despite the increasing competition it continues to face. It might not need to change its strategy and business approach for the present. However, if the company intends to continue with the impressive performance, it might need to introduce another gadget in the market.
Apple managed to introduce the iPad and interest consumers when they already had the option of mp3 players. It introduced the iPhone, when people had access to smart phones. The company developed the iPad as an improvement on the computer tablet that was already in the market. It needs to introduce another gadget that will change the mobile market entirely. This will enable it to attract new customers while at the same time retain the older ones. Apple continues to face mounting pressure from other players in the industry, especially in the smart phone market. It will need to review its product prices as a marketing strategy.
Apple has managed to remain profitable despite increased competition from other industry players. It has been in the computer and mobile industry for a long time. This has given it a competitive advantage, as it has been able to examine the market trends and develop products that appeal to the consumers. It has enough resources to remain competitive. It has managed to attract the most sought after leaders in the technology and business fields to chart its way forward. It appeals to many people who are daring in their innovations. This has made it a pioneer in the industry. It has been able to create products that have set the trend in the industry. However, the company faces stiff competition from other companies.
The introduction of the Android operating system has made it possible for companies such as Samsung, Nokia, and LG to create products, which can easily substitute the iPhone (Marino & Gamble, 2010). This shows that the company might not sustain its leadership position for a long time. Already, the company is facing tough competition from Samsung through its galaxy range of products. Samsung has managed to introduce different versions of the galaxy, to meet the customers’ needs. Some of the models have the same functionality and capabilities of the iPhone. Others have additional features lacking in the Apple product and this has enabled Samsung to penetrate and gain a significant share of the smart phone market. In addition, many people can afford to purchase the products because of the lower prices.
Apple has been quick to identify the existing marketing opportunities and it has managed to deal with the threats it faces. Despite the success of the iPhone, the company did not give up on its computer market. It capitalized on the success of its subsequent products to increase its market share in the computer industry. It took advantage of its customer’s loyalty to market its products at a higher price compared to its rivals. The company managed to remain profitable and retain its market leadership position despite the high prices it offered. Over the years, the company has faced threats from its competitors and from a failing economy. Rivals in the industry have managed to create similar products at more affordable prices. The company’s entry in the international market has been shaky. While many people recognize and admire the brand, the high prices prevent them from acquiring the products. The company expects to make huge profits in countries such as China because of the high population. However, it faces the threats of counterfeits, which has reduced its sales and revenue (Marino & Gamble, 2010). The counterfeits have similar features to the real products but they are offered at lower prices. The recession experienced in 2008 threatened the company’s financial performance.
Apple has been able to create value proposition for its customers. When it introduced the iPod in the market, it did not realize great achievement until it developed iTunes. It was able to develop what the customers had always wanted to have. The company increased the values of the iPhone with every new model developed. This gave the customers a choice over which product to purchase. It also reflected the company’s desire to meet the customers’ needs. The introduction of the iPhone was another milestone for the company as it placed it above phone market industry. The company added value when it incorporated the features of the iPod to the phone. Additional models of the iPhone improved on the first version, giving customers a choice and increasing their satisfaction.
The company increased the value of its tablet computer by developing 11,000 applications for the iPad. Customers using the iPad also had access to many other applications contained in the iPod and the iPhone. The company made the tablet computer more interesting. Although the technology had been there for a long time, many people had largely ignored it. The company identified how the tablet would add value to people’s lives. This increased people’s interest in the gadget and they purchased it in the millions (Marino & Gamble, 2010). The creation of different models in each innovation has enabled the company to gain a competitive advantage through differentiation. Apple consumers are spoiled for choice because of the many different product varieties.
Apple is competitively stronger compared to its rivals although the competition continue to increase as other companies penetrate the market. The brand name is its main selling point. The company is not competitive in terms of prices. Many of its products are expensive compared to other similar ones in the market. One can get a smart phone with the same functionality and capability as the iPhone. However, because of the brand, customers prefer purchasing the iPhone. The customers are loyal and they wait eagerly for the company’s introduction of new products. Apple capitalized on its competitor’s weakness in the tablet market. It created an easy to use interface, which was more convenient for the customers (Marino & Gamble, 2010).
One of the company’s strengths was that it was able to develop a tablet computer that enabled customers to use the internet, play music, and view videos in addition to performing other media tasks. Because of such features, the company was able to charge high prices for the iPad. It did not have direct competitors then. The other option was to use an e-reader, which was specifically for accessing and reading books and did not have other functions. This was a competitive strategy for the company and it took advantage of that to charge high prices. The iPad costs four times as much as an e-reader (Marino & Gamble, 2010).
The main issue facing the company is how to maintain market leadership in the face of growing competition. The company has to decide how it will improve its technology and continue attracting customers. Many companies, especially in the smart phone market, introduce new products with innovative products frequently. This is not the case with Apple, which seems to have slowed down the development of different products. Another issue facing the company concerns the affordability of its products. The company has to find a way of reducing its production costs, which lead to a reduction in prices.
Reference:
Marino, L., & Gamble, E. J. (2010). Apple Inc. in 2010