Apple Inc.'s business model and product ecosystem strategy

Apple Inc.

About the company

The odds that Apple will be mentioned as the most innovative company are very high due to its reputation for leading edge products. It is the world's third largest mobile phone maker just after Samsung and Nokia. Apple has had a reputation since its founders who are college dropouts Steve Jobs and Steve Wozniak brought it into existence. It was established in 1976 and incorporated in 1977 (Reuters Edition U.S., 2012). It had the name Apple Computers Inc. For thirty years until it was renamed in 2007 since the traditional focus of production of computers shifted to the production of consumer electronics.

Apple memorably invented the Mackintosh in 1984 and since then it has gone on to build a hard core brand name due to the fact that its customers who liked the good designs of their products (Reuters edition U.S., 2012). Apple Inc. is a company that is engaged in designing, manufacturing and marketing mobile communication and media devices that include personal computers and portable digital music players. It also sells a wide range of related software, peripherals, services and third party digital content and applications. The software and services include iPad, iPhone, Apple TV, a portfolio of consumer and professional software applications, the IOS operating system and accessory services and support offerings. The company sells and delivers applications and digital contents through iTunes store, App store, and iBookstore. The introduction of a store for purchase of software application was a representation of Apple's new business model. Though touch screens had been invented and seen in the mobile industry before Apple was the first to achieve the first mass market adoption of this user interface that included specific preprogrammed touch gestures. The logo of the company is an Apple with a bite so that it would not be recognized just as another fruit.

Apple has become well-known for its advertisements that launch musicians into stardom due to their highly creative graphics and catchy tunes. Apple products are sold worldwide from their retail stores, online stores, direct sales force not forgetting third- party cellular network carriers, retailers, wholesalers and resellers. In addition to its main products Apple also sells a wide range of third party iPad, iPhone and iPod compatible products such as application software, printers, speakers, storage devices, headphones. The customers of the company range from consumers, small and mid-sized businesses, education enterprise and customers in government demanding the hardware and software products (Apple Inc.,2012).

The company ranges of products are also designed to address students' needs since they support mobile learning and a real time distribution of education related material online. The sales to the education market are made through direct sales force, a selected range of third party resellers and other online and retail stores. The company's operations are in five segments; America segment includes North and South America. The Europe segment includes European countries as well as Africa and the Middle East, Japan, Asia-pacific including Australia and Asia not forgetting retail that operate worldwide in Apple owned retail shops (Apple Inc., 2012).

In the traditional computing market Apple stands out as a leading innovator and strengthening its range of high quality products. Its reputation as a company was cemented by the launch of the iPhone that created its global publicity. It demonstrated the ability of Apple to break through existing paradigms since it is sold through specific mobile operators and is associated with a specific contract and hence sold at a specific high end price. This has really brought about a customer pool otherwise known as brand community for Apple. Apple element on approach to innovation is the interplay between service and product. First it was music and now it is movies, these are made possible via its iTunes service. Apple has brought a revolution in the operation of the music industry and has expanded its music videos, audio-books and movies.

Recommendations

The Apple brand, the quality of marketing strategies, its innovative capabilities and the continued success it has had in building of strategic partners are the factors that will determine the company's future in music, mobile phone and other of its products. Apples actions and commitments should be thoroughly integrated and well coordinated so that the company can overcome its core competitors, build up its strength on competitive advantage and maximize value. As a manager this can be achieved through cautiously engaging the low end market that has potential of tarnishing the name of Apple as a company. They should also ensure they carefully manage the brand exposure. The management should also invest continuously in research and development to ensure that they stay ahead always and lead radical products and discoveries in technology ( BrainMass Inc., 2012).

They should also maintain and upgrade the design of their products that will reduce the prospect of new entrants into the market. The products that Apple offer are characterized by rapid changes in the technology, for the company to be able to successful the management should ensure that it has a continual and timely flow of competitive products, services and technologies into the market. If Apple is unable to produce products that are commercially viable innovations in the market then it should consider an expansion of the products they offer through licensing, acquisition of businesses or even joint development projects. This will ensure that Apple will remain in business. The management should also ensure that they make an assessment of the customer base more deeply and broadly. This will enhance security, quality and image that will make the products more appealing to its customers. Increased market penetration can be enhanced through expanding the company's distribution networks that will effectively reach more of the targeted customers and provide products that are high quality (BrainMass Inc., 2012).

The management should also put up strategies that will ensure the success of Apple such as the vigilant management of costs that that will enable Apple to maintain price flexibility hence improve its competition among the competitors that offer low prices on their products. They should also leverage Apples share in the music market that will strengthen the performance of other applications. The company should also put up a management team that is effective and the strategy for succession that will reduce overdependence on a single individual to put the interest of the company at bay.