Strategic Management Case Study Report: Apple Inc. Analysis

This case study report provides a comprehensive analysis of Apple Inc.'s strategic management, examining its approach to sustainability in both the short and long term. The report begins by identifying Apple's customer base, segmenting them based on demographics and behavior, and analyzing the types of products offered. It then delves into operational insights, including production, research and development, and sales strategies. The marketing strategy, particularly the focus on niche markets and the use of a skimming pricing strategy, is also explored. Furthermore, the report outlines future plans, including descriptive, predictive, and prescriptive strategies, such as shifting production, software compatibility, expanding into consumer electronics, and enriching artificial intelligence with localized linguistic traits. The report concludes by emphasizing the importance of these strategies for Apple's continued success in a competitive market.

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Executive Summary
The aim of this report is to examine the strategies used by the organization for effective
sustainability in the short term and the long-term market. Firstly, this paper will try to
identify the customer base and what type of customers are the attracted towards the selected
products or services offered by the company. Then it will focus on the types of products the
company manufactures. Next, the paper will provide an operational insight and how it is
effectively used to maximize profits. Finally, the business initiatives will be drawn for
concluding the paper.

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Table of Contents
Introduction................................................................................................................................3
Company Background............................................................................................................3
Products..................................................................................................................................4
Customers...............................................................................................................................4
Operational Insights...............................................................................................................5
Marketing Strategy.................................................................................................................5
Plans for the Future................................................................................................................6
Descriptive Strategies.............................................................................................................6
Predictive Strategies...............................................................................................................7
Prescriptive Strategies............................................................................................................7
Conclusion..............................................................................................................................8
References..............................................................................................................................9

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Introduction
Strategic Management is a process of formulation, structuring, supervising and
analyzing the daily operations of a business to reduce the gap between the expected goals and
objectives of the company and the actual progress towards the objectives. The chosen
company for the report is Apple, Inc., which is a technological based company. The
advancement in the technological industry has forced the organizations to cope up with the
pace and provide the best products at the optimum price. For the purpose of strategic
management, the report will examine the internal and external strengths and weaknesses
using tools such as Swot Analysis. The report will further identify customers and tactics to
retain them, Products offered by the company, Operational Insights and Business Initiatives
(Ansoff et al 2018).
Company Background
Apple, Inc. is one of the founding members in the world of innovation. Apple has
been always known to challenge the ways of the world backed by constant innovation to
make the life of the people easier and more convenient. It was founded in 1976. The founding
members of the company are Steve Jobs, Ronald Wayne and Steve Wozniak. The
headquarters of the company are in Cupertino, California, USA (Khan, Alam and Alam
2015). The company is concerned with the production of both hardware and software. The
hardware section includes mobile: iPhone, which is the current flagship product of the
company, Laptop: MacBook, Tablet: iPad. The software section of the company includes
services like iOS, iTunes and iPad OS. Today, it is one of the Global Tech Giants and one of
the pioneers of the Silicon Valley.

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Products
Laptop: MacBook Air, MacBook Pro, MacBook Pro Retina.
Mobile Phone: IPhone X, IPhone 6 and 6S (Currently selling)
Tablet: IPad.
Software: IOS (operating system), ITunes, Apple Pay, I Life, IWork.
Customers
For the purpose of Identifying customers, this paper shall use the market segmentation.
1. Demographic Segmentation:
a) Age: For the devices such as iPhone, MacBook and iPad is between the age
brackets of 20-45. Software services such as iTunes, App Store and Apple Pay for
the age group of 18-30. Operating System target age group is 20-35.
b) Gender: The user base gender is both male and female.
c) Income: All the products of Apple are premium priced and targets only the high-
income group.
d) Occupation: For the devices such as iPhone, MacBook, Operating System and
iPad, the target customers are professionals and executives. Software services
such as iTunes, App Store and Apple Pay the target customers are both students
and professionals.
2. Geographic Segmentation: The main market if the products offered by Apple is the
US, but it has expanded globally over the years and is present in most of the

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developed and developing countries. Moreover, if the segmentation is done based on
density then it is mostly present in the urban areas.
3. Behavioral Segmentation: One of the strengths of the company from behavioral
perspective is that the degree of loyalty of the customers are very high. Once the
customers start using the Apple products they do not switch brands. This is mainly
due to the
4. Psychographic Segmentation: Social class of the customers are middle and upper
class for all the products. In addition, the lifestyle of the users are either aspiring or
successful people.
Operational Insights
Production: The production units of Apple are located in China. This is because the
Chinese policy has been structured in such a way that it attracts most of the companies in the
world to open and operate their production units in the country. This helps the companies top
perform free international trade. On the other hand, the labor cost is very low in the country
so the manufacturing cost is low compared to the other countries.
Research and Development: The research and development center of the company is
done in the headquarters. It comprises of the hardware designing, software development and
analytics team among other departments.
Sales: Apple Products are sold from both online and offline stores. Online, it sells
through third party e-commerce websites such as Amazon and E-bay. It also sells products
through their official website. The offline sales are mainly conducted through their flagship
stores (Lockamy 2017)

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Marketing Strategy
Almost all the successful companies of the world owe their success to their idea and
their marketing strategies. Apple has always targeted the niche markets of the world
following a skimming pricing strategy. The main ideology it follows is profit per unit rather
than sales maximization (Jackson and Ahuja 2016). This has led to the transformation of a
simple smartphone into an aspirational product. However, the core philosophy, pioneered by
Mike Markulla, which the company strictly follows, are as follows:
1. Empathy: Understanding the present customers closely and understanding the future
customers more precisely than the other competitors in the market ion the same
industry.
2. Focus: To act immediately on the market opportunities and decrease unnecessary
aspects engaged in the business.
3. Imputation: Presentation of products and services to the customer in a unique style to
increase the level of sophistication of the product. This justifies the premium pricing
of the products (Payne 2017).
Plans for the Future
These strategies will guide the organization to sustain in the long run. This will help the
company to stay ahead of the increasing competition in the market, from brands such as One
Plus and Samsung. The three segments are as follows:
Descriptive Strategies
a) Transfer of Production: The main production house of Apple is in China. It
accounts for more than 95% production. However, the Chinese economy is run by
the communist party, which is known for changing the rules and regulations of the

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industrial policy. On the other hand, the natural resources of China are also
decreasing (Hsu 2018). Therefore, it must shift its production from China to some
other countries where there exists abundance of cheap and effective labor like
Bangladesh and Pakistan.
b) Software Compatibility: Before the non-compatibility of the brand was seen a
strength which increased sales at a point of time. However, after the emergence of
One Plus and Samsung’s premium segment the market has become more dilute.
Therefore, the Apple’s Operating System must be compatible with other market
dominant Operating System such as Windows and Android (Wesley and Barczak
2016).
Predictive Strategies
a) Expansion in consumer electronics: To expand the consumer base it must increase
the product portfolio to relatable devices such as Operating System based
television, Smart Speakers and Controlled Interiors (Nieto-Rodriguez 2016).
b) Expansion in Unexplored Markets: On the other hand, the next step is the expand
the market of the products. The next market for premium segment is the African
markets where the economies of several countries such as Nigeria and Uganda are
growing at a fast pace. (D O'Rourke 2018)
Prescriptive Strategies
a) Enrichment of artificial intelligence with localized linguistic traits: The
artificial intelligence of Apple is very vague in the context of the Asian

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countries. For instance, one of the biggest markets of Consumer Electronics is
Asia. There are 28 official languages in the country, which has been extensive
analyzed by Google. Therefore, Google is the market leader in the country.
However, Apple is an aspirational product in the country (Heracleous and
Papachroni 2016). Therefore, if the artificial intelligence is aligned with the
local information of Asian markets then it can easily increase sales.
b) Digital and Online Streaming Channel: The next step for Apple is to enter the
digital field like Amazon Prime and Netflix on a subscription plan as the field
is still new with low levels of competition (Gershon 2016).
Conclusion
In the above study, we have selected Apple for the purpose of study. First, we have
identified the customers and product and conducted market segmentation. Then, the
marketing strategy of the company have been examined in details to understand the rationale
behind the philosophy of niche marketing. Then, the paper focused on the operational
insights including the three main aspects i.e. research and development, production and sales.
Then we have discussed the strategies that the company should develop in order to sustain in
the long run. Apple being the iconic brand it is will become more successful if it complies
with the above stated strategies.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external
environment of Apple Inc. International Journal of Economics, Commerce and Management,
3(6), pp.955-961.
Gershon, R.A., 2016. Digital media and innovation: Management and design strategies in
communication. Sage Publications.
Lockamy III, A., 2017, July. An examination of external risk factors in Apple Inc.’s supply
chain. In Supply Chain Forum: An International Journal (Vol. 18, No. 3, pp. 177-188).
Taylor & Francis.
Wesley, D. and Barczak, G., 2016. Innovation and marketing in the video game industry:
avoiding the performance trap. Routledge.
Jackson, G. and Ahuja, V., 2016. Dawn of the digital age and the evolution of the marketing
mix. Journal of Direct, Data and Digital Marketing Practice, 17(3), pp.170-186.
Heracleous, L. and Papachroni, A., 2016. Strategic Leadership and Innovation at Apple Inc.
SAGE Publications Ltd.
D O'Rourke, A., 2018. The world apple market. Routledge.
Mickalowski, K., Mickelson, M. and Keltgen, J., 2008. Apple's iPhone launch: A case study
in effective marketing. The Business Review, 9(2), pp.283-288.
Payne, B., 2017. Brand Positioning and its Usefulness for Brand Management: the Case of
Apple Inc. Newcastle business school student journal, 1(1), pp.51-57.

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Hsu, Y., 2018. LAUNCH STRATEGY AND NEW PRODUCT INNOVATION: AN
EMPIRICAL EXAMINATION IN TAIWAN. International Journal of Organizational
Innovation, 11(1).
Nieto-Rodriguez, A., 2016. The focused organization: how concentrating on a few key
initiatives can dramatically improve strategy execution. Routledge.
Dolata, U., 2017. Apple, Amazon, Google, Facebook, Microsoft: Market concentration-
competition-innovation strategies (No. 2017-01). Stuttgarter Beiträge zur Organisations-und
Innovationsforschung, SOI Discussion Paper.