Sample Report On Apple’s Business Model Analysis
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Apple is a multinational cooperation based in America. The company designs and develops electronics that are then sold to their consumers. Besides electronics, Apple also sells the computer software they develop and online services they offer (Hill, 2014). Apple is also a major dealer in personal computers. Apple is the second largest company in the information and technology sector by revenue with Samsung Electronics leading. In the mobile phone world, Apple is the third largest globally, and the world’s largest music retailer. The company has 72,800 permanent employees with 437 retail shops in fifteen countries around the globe. They can be found in Asia Pacific, the Americas, Europe, and the Middle East. There is also an operation in the online Apple and iTune stores. In terms of market share, Apple commands 32.6% in America to be the leading smartphone brand. However, this has been a decrease from 35.9%. Globally, its market share has been steady at 11.4% (Jones, 2014).
Apple’s Customer Segments
Apple’s customer segments emphasize that at their core, the digital users who are the customers need to set the behavior for all the marketing situations. “Bringing your persona” is a fundamental requirement that leads to the fundamental thinking of customers. The customer segments that result from digital personas are characterized by trust and digital capabilities. Apple designs its products with the customer in mind. It segments them into psychological, demographical, behavior and geographic bases. They look at the occupation, age, and life cycle of the people. They also ensure their adverts are quite informative, and most of their products target the Millennials.
Apple’s Value Propositions
Apple’s iTunes are among the best of the product’s visual and innovation appeals. Other value propositions for Apple include Pinterest, Opera, Salesforce, Hubspot and Skype.
Apple’s Business Channels
The business channels at Apple have made them come this far overcoming all the hurdles. Apple has a strategy of ignoring their critics. Entrepreneurs have a lot of opinions coming their way on how best they can manage their businesses. Apple’s innovations always faced mockery in the beginning; however, they still prevailed.
Apple matches the competition better by using a business channel that focuses on the software and not much on hardware. It is evident that software is more appreciated than hardware because when the iPhone 4S entered the market, even those who had an iPhone 4 opted for the new brand. The iPhone 4S did not offer a different hardware architecture but a more integrated software.
Apple’s Customer Relationships
The strategies for customer relationships that lead to Apple being the world’s greatest marketers include:
Hiring empathetic employees who are customer-obsessed.
The iterative involvement of customers.
Protection against feature bloat and scope creep.
Building on compatible experiences.
Enabling customer discovery and differentiation in different Apple stores.
The building of a moat.
Devising of business models that create an ongoing customer value.
Cannibalizing when necessary.
Apple’s Revenue Streams
The revenue streams for Apple are from the sale of their software and hardware to their consumers. The biggest of Apple’s revenue package comprises iPads, Macs, iPhones, and iPods. The company controls everything that happens to their products bearing the Apple name (Lashinsky, 2012). The company will not let any other company use their platform software in the invention of their devices. As such, Apple became one of the most profitable companies around the globe. However, if the interest in a company’s hardware decreases, the revenue streams to fall back on decrease. Consequently, it is crucial that the Apple fan’s loyalty off- the- charts remains safeguarded. The company has secure revenue streams provided that consumers keep coming back for the iPad, iPhone and the Mac that are latest in the market.
Apple’s Key Resources
The key resources of Apple include:
Having an established business network
Having a distinctive image among the competitors.
Harboring some bargaining power with the suppliers.
Having a competitive rivalry that enhances their growth.
Apple’s Key Activities
The key activities of Apple include:
The division of their lines of business into iPad, iPhone, Mac, iPod, Software, iTunes, accessories and services.
Computing of software and hardware. The software and hardware both have a level of quality and their usability is efficient.
Developing mobile devices.
Apple’s Key Partnerships
Since Apple likes to do business their way, they have resorted to unique partnerships particularly with Cingular, Intel, and Microsoft. Cingular are Apple’s new mobile partners, Intel supplies Apple with processors, and Microsoft have since the conception of Apple, had a lifetime relationship. Intel replaced IBM due to the disappointments Apple received from IBM. Cingular have an increasing free publicity generated by the iPhone. Microsoft has always offered Apple a good competitive history, and they both strengthen each other at their current positions.
Apple’s Cost Structure
The cost structure describes all the costs realized for a business model to work. After long periods of speculation, Apple confirmed that their prices are high but emphasizes the quality of their software (Cruikshank, 2006). Outside the United States, the prices of Apple are not subsidized. However, as each day ends, the Apple brands stand for premium. The cost structures do not at all have their basis on the massive adoptions. Despite the misunderstood cost structures at Apple, the market is still prevalent.
CRUIKSHANK, J. L. 2006 The Apple way: 12 management lessons from the world's most innovative company. Burlington, N.C.: McGraw-Hill Audio.
HILL, C. W. 2014 International Business: Competing in the global marketplace. New York, NY: McGraw-Hill Education.
JONES, C. (2014) Apple Is Starting to Claw Back Some iPhone Market Share. Forbes. [Online] 31st October. Available from: http://www.forbes.com/sites/chuckjones/2014/10/31/apple-is-starting-to-claw-back-some-iphone-market-share/. [Accessed 25th January 2015].
LASHINSKY, A. 2012 Inside Apple: how America's most admired and secretive company really works. New York: Business Plus.
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