Apple is faced with both internal and external strategies issues in the course of producing and selling their products to the consumers. Some of the external strategic issues faced by apple includes:
1. Product differentiation strategy; Apple uses a differentiation marketing strategy to get to its customers, thus directing its products to a particular segment mostly the affluents (that can easily afford the products) and charge a premium price.
2. Apple as a marketing strategy that really appeal to its customers with great and better design than its competitors. For example the popularity of Ipod appeals to a very large market, and because of its unique features its accepted mostly by a populace between the ages of 12-25, thus creating little room for advertising or marketing of the product. Also the fact that people are mostly attracted to the product because of its innovative features makes it easy for the company to market its products.
3. Distribution Channels: The distribution forms used by apple includes the company's retail outlet, business to business selling, online stores. In most cities of every country in the world an apple retail outlet can be easily be located, thus bringing the product closer to the customers. For example, Apple offer their products in large quantities to educational sector such as schools, universities to people who are familiarized with products. This also allows Apple to observe the students because they are mostly of a population between 20-30 which is a typical marketing segment of the company. By they can easily understand the trends and features required by the people and innovative better products in the future.
4. Competitive Strategy: One of the strategies used by apple to outweigh its competitors in the market is constant innovation of the products. The company's ability to compete depends on its ability to provide new innovative features on products; this is due to aggressive and highly competitive global markets from competitors like Samsung, Microsoft, Teckno etc. Thus, the company must continually introduce new products, services and technology, and also be able to stimulate customer demand for new and upgraded products. For this strategy to be successful Apple ensures a timely and successful product development putting into consideration that the product has to be accepted by the targeted market.
5. Another obvious strategy is the premium pricy strategy which apple uses; the product market segment is higher, medium and upper classes of the economy making it unaffordable for average people to purchase. And Apple being a trend setter having a differentiation strategy they tend to bring out products that are perfectly complete for the market and charge a premium price, and thus creating more market opportunities and their ability to maintain their share with more product offerings.
6. Outsourcing is another major external issue faced by apple; the supply of raw materials for apple products are sourced from partners outside the United states reducing the company direct control over and distribution. The transportation and logistics management are sole-sourced in Asia, Europe supplying many important parts for the product build up. A failure in function of any of the partners as a result of unforeseen contingencies such as disasters, political issues tend to have an unpleasant effect on the overall cost of the finish product. This Strategy tend to reduce the operating costs of apple.
7. Apple products are faced with quality problems frequently which could result to decline in sales, operating margin or even harm the reputation of the company. Due to the complex nature of the hardware and software, the designs could contain defects like bugs which in some cases the company cannot detect.
8. Being a Global concern, Apple is subjected to risks in international operations. Risks such as credit risk, exchange rate risk on trade receivables in different foreign markets are inevitable. Also legal compliances by the company, employees, contractors and other related parties are mandatory by foreign laws and regulations which could be defaulted by any of the them.
9. Reliance on third party intellectual property may not have available for apple on a commercial basis. Failure to obtain third party rights to use intellectual property on a commercial basis hinders Apple from trading with certain products, which can affect the company financial position.
10. Inadequacy of key personnel personnel services could impact on the success of Apple; the availability of high skilled workers such as CEO, executive team and other highly skilled employees are needed for the success of the company. But as a result of the high demand of talents and competition in the industry especially in Silicon Valley where most company's key personnel are situated.
11. Issues such as political war, natural disasters, terrorism can also have impact on the business activities of the company.
12. Also, legal issues such as US and international rules and regulations, policies and other obligations regarding data protection.
13. Acquisition and investment in new businesses can disrupt ongoing business and present risks that were not initially contemplated.
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