Apple as One of the Biggest Companies on the Planet

Apple’s BackGround

Apple Inc(formerly Apple Computer, Inc) was founded by Steve Jobs and Steve Wozniak on April 1, 1976. The company was later incorporated on January 3, 1977. Apple’s products are mainly consumer electronics, personal computers, software, servers. In addition, Apple is also a digital distributor, often distribute music, film, video, etc.

In the last three decades, Apple Inc has been predominant manufacture of personal devices but found little success due to low market share in the 1990s. After Steve Jobs become the CEO of apple in 1997, he began inserting a new corporate philosophy of products that are both recognizable and simple, and he started that philosophy with the original iMac in 1998.

Today, Apple is well known as one of the biggest companies on the planet. It was the first American company to hit the trillion-dollar company mark in August 2018. Its reputation is well known across the world with its product and service. Apple alone holds 18.2% of the world phone market share. From 2000 to 2018, Apple’s share increases 58 times its value back in 2000, that is 5800% profits in just 18 years. Currently, Apple’s one of the biggest companies in the world, in term of both valuation and popularity.

Apple’s Product and Service

Apple offers a varied line up of products and services. For physical products, Apple is well known for its i-lineup, which included the iPhone, iPad, Mac, iPod. It also sells Apple Watch, Apple TV. Apple also controls an operating system such as iPhone OS (iOS), watch OS and OS X. In the last five years, Apple has extended its business reach toward sell and deliver digital content such as music, application, movies through iTunes and online financial transaction with Apple Pay.

Last but not Least, Apple also provides a range of accessory, services, and support to customers such as a portfolio of consumer, professional software applications, iPhone OS (iOS), OS X and Watch OS operating systems, iCloud, Apple Pay and a range of accessory, service and support offerings.

Apple’s Segmentation and Targeted Customer

According to John Dudovskiy: “Apple segmentation, targeting, and positioning represent the core of its marketing efforts.”

Apple, being a multinational company, positioned itself to be a premium brand such as Rolex or Lamborghini. By doing that, Apple is able to offer products and services for a premium price. In addition, such product and services usually come for an additional cost.

Apple’s strategy is using a mono-segment type of positioning, which in turn make it appealing toward only a single customer Segment, the type of customer who is willing to pay extra for the company products and services.

John Dudovskiy’s table illustrated Apple segmentation, targeting, and positioning:

Apple’s Segmentation and Targeted Customer

According to Edward Ferguson from Paramore Institute, Five Forces Analysis of Apple Inc could be shown as:

1. Competitive rivalry or competition: Strong force
2. Bargaining power of buyers or customers: Strong force
3. Bargaining power of suppliers: Weak force
4. The threat of substitutes or substitution: Weak force
5. The threat of new entrants or new entry: Moderate force

After considering the five forces, it is clear Apple is needed to its attention on competitive rivalry and the bargaining power of buyers. By utilized this external analysis, the company will be able to support, maintain and raise its current position on the market. By keeping the innovation rapidly, Apple was not only able to strengthen its place when against a competitor but also able to keep the customer attracted to its products current and future.

Look closer in each force, we could see:

Competitive rivalry or competition: Strong force

• High aggressiveness of firms (strong force)
• low differentiation of products (strong force)
• Low switching cost (strong force)

Bargaining power of buyers or customers: Strong force

• Low switching cost (strong force)
• The small size of individual buyers (weak force)
• High buyer information (strong force)

Bargaining power of suppliers: Weak force

• Moderate to the high number of suppliers (weak force)
• Moderate to high overall supply (weak force)
• A high ratio of firm concentration to supplier concentration (weak force)

The threat of substitutes or substitution: Weak force

• Moderate to the high availability of substitutes (moderate force)
• Low performance of substitutes (weak force)
• Low buyer propensity to substitute (weak force)

The threat of new entrants or new entry: Moderate force

• High capital requirements (weak force)
• The high cost of brand development (weak force)
• The capacity of potential new entrants (strong force)

Apple’s use of CRM

According to Expert CRM Software, Apple has been implementing CRM technology in its customer service departments and other related sectors for nearly a decade. This use of CRM ranged from sending emails to current and potential customers, mostly customer who have used their in-store services, with the intention of assessing the customers’ feedback. Which in turn will prove useful when it comes to boosting its customer satisfaction.

Apple makes it wide and clear for its retail department that it solely focuses upon a pleasant experience for its customer, rather than pushing for a purchase

Apple uses CRM with the purpose of encouraging to establish a long-term relationship between Apple and its clients, to strengthen its customer loyalty and increase customer satisfaction towards the company. In order to retain and develop the relationship between the company and its customer base, Apple appeal to enhancing the customer experience so it is a “unique memory of buying a phone”.

Apple central strategy is not making the customer to buy as much of their product as possible, but to teach their customer to love, treasure, appreciate and see the benefits that the company’s products and service could provide

Apple uses a variety of different strands of using CRM in its infrastructure. However, Apple primary purpose of using CRM is data collection. According to Expert CRM Software: “This occurs whenever a customer makes a purchase, whether it is an iPhone, use of software such as iTunes, or registering their product using their Apple ID. All of this information is used to help define advertising so that it is more directly targeted at potential customers.”

In addition, Apple developed a CRM tool for their customers, which is entirely cloud-based. This means that when the customer uses this CRM, Apple could also benefit from the data collected by this CRM due to “There is a pyramid effect of businesses benefiting from CRM data”.

To this current date, Apple most focus its intention of using CRM is to improve the customer service experience, as well as their satisfaction. This goes for an existing, new and potential customer. The Apple Genius at your local store is actually an important part of the Tech support department.

The presence of this apple genius allowed the customer to meet face-to-face with professional technicians and discuss problems and solutions regarding their devices or online services. By doing this, Apple enhancing its customer experience, by making them feel like Apple really care about their problem and would willing to solve it regardless of who they are, which “worth the money”.

Apple’s use CRM manages the effectiveness of this face-to-face contact, which also helps to establish and enhance brand awareness. The data that the CRM system collected allow Apple to make an educated guess about which type of advertising and emails they should target.

By implementing the CRM technology so extensively within its retail sector, Apple was able to create a lifestyle experience, an ecosystem base on their products and service, moving away from being a purchase-based company.

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