Apple's product development strategy always makes its competitors constantly admire. Success isn't just about high revenue, it's about how they position their brand and change the game. Join Tanca to explore the business strategies and marketing strategies of Apple - the "giant" of the technology industry through the article below.
3 main factors in Apple's business strategy
Strategic objectives
The goal is always something that the brand needs to clearly define. The goals of Apple's business strategy always change from time to time.
However, the company always focuses on issues related to revenue, profits as well as the value and influence of the brand.
Target customers
The customers that Apple identifies are high-income consumers, that is, in the high-end market segment. Apple is not in the mass segment. The market share numbers as well as the product characteristics they launch on the market prove that.
Target market
In every business strategy, identifying the target market is always necessary. If determined incorrectly, it will cause businesses to waste resources and not bring about the desired results.
Apple divides its market into many different segments. Especially carry out activities focusing on main markets. In particular, Apple's main markets are areas and countries where people have high incomes such as the US or China.
Apple's product development strategy
The Ansoff Matrix was created by the father of strategic management – Igor Ansoff. The matrix helps analyze the relationship between the product and the market to evaluate the advantages and disadvantages of the product in the target market.
From the results of Ansoff matrix analysis, brands can identify market opportunities for the product.
Apple's strategy for the Apple II product
The Apple II was one of the world's first personal computers. With its release in 1977, this device played a prominent role in the personal computer revolution.
Steve Wozniak – co-founder of Apple – designed the first Apple IIs, using the BASIC programming language and a TV as the screen. The company sold versions of the Apple II until 1993 with total sales of 5 million to 6 million units.
Macbook product strategy
The first Macbook was introduced in 1984, making Apple a leading technology company. This was the first commercially successful computer to use a mouse and a graphical user interface.
However, Mac's market share in the personal computer industry is only 8.5%, many times lower than companies like Lenovo, HP or Dell. Even so, Mac market share has increased over the past two years, after Apple switched to using its own M1 chip, instead of Intel's chip.
Strategy for iPod/iTunes products
In 1997, co-founder Steve Jobs returned to Apple and quickly helped stabilize the business. In 2001, he launched the company's first revolutionary product, the iPod - a music player that allowed users to carry thousands of songs in their pockets.
It is estimated that Apple has sold 450 million iPods as of May 2022. Meanwhile, iTunes - the online music store launched with the iPod - has sold more than 30 billion songs.
In May 2022, Apple announced that it would discontinue the iPod – after years of declining sales due to being replaced by smartphones. The company is also replacing iTunes with the Apple Music streaming service.
Apple's strategy for iPhone products
Perhaps Apple's most world-changing product, the iPhone transformed cell phones primarily used for making calls into advanced computers and created a thriving economy.
Apple sold 233 million iPhones last year, generating about $196 billion in revenue. Currently, iPhone sales account for about half of the company's revenue.
Since its launch, more than 2 billion iPhones have been sold worldwide, making it one of the most successful consumer electronics products in history.
Apple watch product strategy
Launched in April 2015, Apple Watch quickly became the best-selling wearable device. With sales of 4.2 million units in the second quarter of 2015. By the end of 2020, the number of people who had used this device was about 100 million.
This smartwatch includes features like health and fitness tracking and is highly compatible with iOS and other Apple products and services.
Accordingly, users can pair Apple Watch with iPhone to make calls, text messages, and receive synchronous notifications from applications on the iPhone.
AirPods product strategy
Despite receiving a lot of criticism when launched in late 2016, AirPods quickly became popular in the following years. Just 2 years after its launch, it is already Apple's most popular accessory device.
Year 2020, Apple sold more than 100 million AirPods. Analysts estimate that AirPods account for more than 60% of the global wireless headphone market.
Apple's strategy with iPad products
Although there have been tablet computers released before. But it wasn't until April 2010 - when the iPad was born - that it was widely accepted by consumers. More than 400 million iPads have been sold, including nearly 58 million in 2021.
However, iPad sales are no longer as high as in the mid-2010s. One of the main reasons is that phone screen sizes are increasing and more convenient.
Analyze Apple's global business strategy
Marketing strategy
Differentiation strategy - focus on improving product quality
From Macbook products to iPods or mobile devices iPhone, iPad, Apple watch... Apple has used the iOS or Mac operating system to send a strong message that its products are superior to competitors. compete. Apple has implemented a differentiation strategy by:
- Breakthrough in product design
- Develop genuine operating systems
- Apple's product pricing follows a differentiation strategy
Develop and connect users
This is one of the factors that helps Apple's brand positioning strategy succeed. Apple creates a community of loyal users. With that, Apple has connected them by allowing anyone with a Mac or iOS operating system to easily share information, photos and videos.
Advertising content focuses on customer benefits
In Apple's strategies for the iPhone or any other product, advertisements always promote creativity. They focus on customer interests using simple content, aimed directly at the target audience.
More about the benefits and necessity of the features that Apple products have. Thanks to that, Apple has brought customers many experiences so they can feel the difference.
Marketing Mix Strategy
Product
Apple implements a product diversification strategy to bring high efficiency in its business strategy. However, the products are aimed at the high-end market segment. In particular, each Apple product is innovative, durable and high quality.
Furthermore, Apple also continuously upgrades its products and services to enhance customer experience.
Price
Brands always have effective product pricing strategies, consistent with the value their products bring. Some prominent pricing strategies that Apple has used:
- Pricing products according to Premium
- Apple prices products according to value
- Pricing according to customer psychology
Place
Apple uses a multitude of sales channels to distribute its products. The channels Apple commonly uses are:
- Webpage
- Online retail from websites
- Company agent
- Apple store
In addition, Apple also distributes products of these brands to authorized dealers. Therefore, the company's distribution network gradually covers the whole world.
Promotion
The Apple brand has long been famous for its smart and highly effective advertising campaigns. Attract a huge number of customers worldwide. That's why Apple's international business strategy is successful.
Effective campaigns include:
- Different and unique advertising campaigns
- Few preferential pricing policies to emphasize product value
Brand positioning strategy
Currently, Apple is attracting customers with products that have beautiful designs and satisfy the emotions of buyers. The message that Apple always aims to "Think Different" shows that this brand is aiming for innovative leadership and customer emotional connection.
Apple recognizes that its customers want to be cool, innovative, game-changing, and different. They know that their competitors are strong and can provide good quality products. So how to convince customers to choose them?
Apple wants to inspire through creative and innovative products that help make customers' dreams come true. They want to show you that they not only “think differently” but also want their customers to “think differently”.
8 bright spots in Apple's product development process
Apple is one of America's leading technology companies. Apple's product development process has made them the success they are today. To do that, they implemented a product development process that included the following highlights:
Empower the Design Department
A product that users trust depends not only on product quality. Appearance is also an important factor. At Apple, the authority of the design team is placed first - a product development strategy that has been applied effectively for many years at Apple.
The design team at Apple is empowered to work, without having to report on financial resources, production... Not only that, they also have Freedom to set budgets for your department.
Isolate the design team
Most Apple employees are not allowed into the company's design studio. Even some people holding other executive positions are automatically not allowed to enter. When a design team works on a new product, Apple implements a strategy of isolating the design team.
Accordingly, the design team will be separated from Apple's business operations, tightly controlled to avoid communication or interaction with other teams during the day. Their workplaces can be completely segregated when developing new products.
Isolating the design team is important in Apple's product development strategy. This helps the design department only pay attention to the goal of creating new products and avoid being affected by external factors.
Detailed documents and procedures
Apple's new product documentation is provided to the product development team when they begin implementing the project. The document outlines in detail the stages of the creative design process and documents each stage that the design team will undertake.
Who will work on each phase, who will be responsible for completion, and what to expect when a product is completed? All of this is clearly documented, a key process in Apple's product development strategy.
Audit weekly
Every Monday Apple's executive team meets to review every product the company is producing. Meetings usually last about 3 hours. Apple can do this because Apple doesn't do multiple product reviews at once.
Partly because they have fewer products produced at the same time. This helps increase resources to focus on key projects that bring efficiency to the Company instead of wandering around with small projects.
Apple's product development strategy could be as successful as it is today starting from these weekly sessions.
The importance of two positions: EPM and GSM
Once a product is manufactured, the EPM (engineering program manager) and GSM (global supply manager) are responsible for taking over the product from design to manufacturing, and bringing the designed product reality.
They have absolute control over the product process and so much power that at Apple they are known as the “EPM mafia.” Both positions are staffed by executives who spend most of their time in China overseeing manufacturing operations.
The job of EPM and GSM is to ensure that products get to market in the right way, at the right time and at the right cost. During their work, they always make decisions based on the principle of doing what is best for the product and following the process of Apple's development strategy.
Constant repetition is the key to success
Sometimes there are leaks from versions of a product like the iPhone that you never see its official release. Many times these leaks come from China, where a factory worker may have been paid to pass a test sample to a blogger or journalist.
That said, to perfect a product, Apple must iterate on the design throughout the manufacturing process. The product is created, tested and reviewed, then the design team improves the product and rebuilds it.
This is a process that takes 4-6 weeks and can run multiple times during the product's development lifecycle. Therefore, there are many versions of the finished product. It's an extremely expensive way to build a new product, but is standard in Apple's product development strategy.
How to package the product
To successfully implement Apple's product development strategy, they took an important step by building a packaging room with absolute security, preventing information leaks to the outside.
If you've ever seen a leaked Apple product prototype, it's definitely not from here, but most likely it has disappeared from the production line in China.
Through Apple's product development strategies, you can see the difference between Apple and its competitors in the same industry. Successfully dominating the market, continuously launching new products but still ranking at the top in revenue is not something every brand can do. Hopefully Tanca's above article will provide you with a lot of useful information.
