Executive Summary - APPLE

Table of Contents EXECUTIVE SUMMARY ......................................................................................................... 3 SWOT Analysis ...................................................................................................................... 4 Stakeholders ......................................................................................................................... 5 Employee .............................................................................................................................. 5 Suppliers ............................................................................................................................... 5 Customers ............................................................................................................................. 5 Shareholders ......................................................................................................................... 5 Marketing Procedures & Tools ............................................................................................... 6 Company’s Position on Social Responsibility .......................................................................... 7 Marketing Strategy ................................................................................................................ 8 References ............................................................................................................................ 9

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EXECUTIVE SUMMARY This is a marketing overview of one of the most valuable companies in the world – Apple, Inc. The key fundamental business model for Apple - is to make simple products. It is able to make simple products because it has a value of simplicity that permeates from [the late] Steve Jobs. Apple is engaged in design, development and marketing of personal computers, media devices and portable digital music players. In addition, according to MarketLine, a research company, Apple, Inc. is also involved in selling a variety of related software, services, peripherals, networking solutions, and third-party digital content. The company’s main headquarters is based in Cupertino, California, and employees more than 76,000 people as of September, 2012. According to MarketLine, the company recorded revenues of $156,508 million during the fiscal year ended in September 2012. This was an increase of 44.6% from the prior year, FY2011. Through their integration model, Apple was able to build non-replicable and sustainable competitive advantages. However, the success of Apple - when it comes to strategies and product development is quoted in these words by Market Week, “Apple is paranoid about everything.” Apple’s projects are done in secrecy. No external agencies are used. Rather, internal teams are recruited for projects. Those who are recruited are not told what they will be working on and according to Apple, those who accept are only given instructions that they will be expected to "give up nights and weekends for a couple of years". The project for iPhone was applied in the same method. Once the project was approved, development took place within a special super-secure section at Apple's Cupertino HQ called the Purple Dorm. This section was so secret that it was never openly mentioned to other employees and even the door to 'the dorm' did not mention where it led. Aside from the cameras and the card swipe entry, the only clues that this area was special were the words "Fight Club" printed on the entry door in the Purple Dorm. And as everybody knows, the first rule of Fight Club is you do not talk about the Fight Club. Although not publicly communicated, Apple, its products and its competitors are measured constantly for feedback and evaluation. But research is only used "downstream" to review consumer perceptions about Apple and its competitors. Upstream, the product development and design teams are not allowed to review the research in an attempt to maintain innovation and cutting edge design. Market research is used to only guide strategy but not to design products. Apple is very good with misdirection of plan products to the outside world. Apple is known to display a craftier and more strategic use for public announcements that throw competitors off. The truth is that the world's most innovative company does not have a fixed formula or approach for developing new products. Page | 3

Apple is generally good at just saying one thing and not getting involved in all the specifications [of a device] and minimizing what it does. This is shown by the small number of products Apple makes compared with the number of products other companies make. Just by making those few products, Apple makes more money than all the other companies combined. Good technology is about great design, but really great technology is powered by companies having a solid marketing ethos that makes consumers as passionate about owning the products as the developers were about creating them.

SWOT Analysis

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Stakeholders Apple uses relationship marketing techniques to build mutually supportive bonds with its stakeholders. Stakeholders for Apple Inc. include but do not limit to shareholders, preferred and common lenders, employees, manufacturers and their employees, software developers, customers, suppliers and music industry.

Employee

Apple was founded in 1977 and since then has employed over 75,000 people worldwide. The majority of Apple’s employees are located in the United States, but Apple has large manufacturing, sales, marketing, and support organizations. Worldwide, and some engineering operations in Europe and Asia. Apple understands it is important to keep employees happy because many employees are instrumental in building relationships with customers.

Suppliers

The ideal suppliers are those who understand Apples culture and expectations. Apple requires from all suppliers to meet the highest standards for all goods and services. In addition, suppliers must be committed to ensuring the highest standards of social responsibility.

Customers

The Apples customers are external shareholders, and they don’t have say in what happens in the business and what specifications their products have. Their customers are sometime shared with other companies, as for example T-Mobile which also sells Apple’s products.

Shareholders

In the third quarter of 2013 Apple distributed a total of $2.77 billion. Shareholders were paid $3.05 per share. Apple’s major shareholders are Vanguard Total Stock Market Index with 13,410,916 shares and Power Shares QQQ with 9,802.606 shares. The company's current dividend payment rate is quite modest when compared to its current and future cash position. At the same time, Apple's nearly $3 billion in quarterly dividend payments makes it one of the highest dividend payers in the world.

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Marketing Procedures & Tools Apple implemented practices and procedures over the years which contributed to the company’s worldwide success. Apple uses branding as a primary marketing tool to deliver on its promises, building trust with customers, and product innovation. With the surge of smartphone and tablets hitting the market, Apple maintains a simplistic approach when creating groundbreaking devices. Through creative advertisements, Apple has created a “buzz” with consumers and media psychographics. Large investment in research and development in their integrated marketing communications (IMC), utilizes crowdsourcing before they develop new products.

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Company’s Position on Social Responsibility Apple is committed to ensuring the highest standards of social responsibility wherever our products are made. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes.” Apple found violations of its, “Supplier Code of Conduct” primarily in China while auditing many of the suppliers. Apple has placed more efforts in their responsibility and responded by increasing auditing and monitoring processes, and hiring the nonprofit Fair Labor Association to audit working conditions. Apples’ 2013 annual report revealed a 72% increase in supply chain audits in comparison to 2011. The FLA covered 178,000 apple workers at the company’s largest supplier, Foxconn during a 2012 investigation.

The inspection has been labeled as one of the largest independent audit in history. In 2012, the tech giant also extended the time period allowed for employees to attend worker empowerment training programs. The training focused on local laws, workers’ rights, occupational health and safety, in addition to revisiting the Apple Supplier Code of Conduct. Lastly, Apple’s movement in campaigning for social responsibility was displayed when the company required its supplier to reimburse US$6.4 million in excess foreign contract worker fees in 2012.

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Marketing Strategy One continuous marketing strategy Apple promotes is its ability to develop in-house hardware & software, operating systems, application software and numerous portable devices that work together seamlessly and provide flawless integration. The strategy gives customers the ability to connect their entire technological existence at a core level, making it hard to accept any other products or replacements. The revolutionary iPhone introduced a marketing strategy known as the exclusivity technique. Through this technique Apple allowed certain phone carriers the ability to sale the groundbreaking device, making the eligible subset of customers unique. The strategy contributed to making the mobile phone one of the worlds most popular, despite it supposedly being exclusive. According to Fion McCormack from Business 2 Community, Apple took this technique and put their own spin on it to develop what has been one of the most successful, and probably low-cost marketing techniques of all time. (McCormack, 2013)

Listening to customers is another key element in Apples marketing strategy. The company does not focus solely on what the competition is doing, but pays close attention to what the customers want. Besides improving the screen, increasing the processor, and reducing the weight, Apple has made very few changes over the life of the iPad tablet. The minor changes are far less than what competitors like Samsung, Amazon and Google are introducing; yet the iPad Air is the best-selling tablet on the market, according to (Franklin, 2013). “You‘ve got to start with the customer experience and work back toward—not the other way around”, Steve Jobs.

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References         

Apple reveals core values in patent trial. (2012). Marketing Week (01419285), 35(32), 38. Handley, L. (2012). Q&A: Ken Segall. Marketing Week (Online Edition), 6. O'Reilly, L. (2012). Tech brands wake up to the Apple way of marketing. Marketing Week (Online Edition), 7. http://articles.bplans.com/writing-a-business-plan/writing-an-executive-summary/207 http://articles.bplans.com/writing-a-business-plan/writing-an-executivesummary/207#whatshouldanexecsummaryinclude http://sbinfocanada.about.com/od/businessplans/a/execsummary.htm http://sbinfocanada.about.com/od/businessplans/a/execsumexample.htm http://articles.bplans.com/writing-a-business-plan/writing-an-executivesummary/207#execsummaryformat http://www.investopedia.com/university/business-plan/business-plan3.asp

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