What should Apple do to sustain its position? Lari Pelanne, Aleksi Halttunen, Ali, Stheffany Godoy
Agenda 1.Problem 2.Current Position 3.Possible Options 4.Strategy 5.Implementation 6.Summary
The Problem
Brand Positioning – Apple slipping? Apple’s overall positioning has been dropping to Super Premium because of tightening competition of iPhone and Apple Watch Value Benefit Ultra Premium Super Premium
Apple Products- Positioning Value Benefit Ultra Premium Super Premium Value Benefit Ultra Premium Super Premium
Apple Products- Positioning Value Benefit Ultra Premium Super Premium Value Benefit Ultra Premium Super Premium
Alternatives Exploit existing - find new innovative markets stay within the current diversification strategy Diversification to lower customer segments by offering more products Be open for innovations - Open the platform ABC
A. Diversification to lower customer segments by offering more products + Attacking new market caps More volume Serving more clients Bigger market share in units sold - Cannibalization The brand and the design are Apple’s core capabilities Stepping into lower segments would greatly damage those sources of the advantage –Manufacturing and distribution get more complex –Relay too much on finding new growing technologies
B. Be open for innovations - Open the platform + Less R&D costs + More innovations + More users - Abandoning the hub strategy would probably shift Apple in the same category with all the others Apple would not be special anymore It would cancel long term efforts from the differentiation strategy Possible effects on the loyal Apple customers
C. Exploit existing - find new innovative markets stay within the current diversification strategy + Align with the current strategy, which has grown Apple to be the market leader + Keeps the current profitability which is the best in the markets + Closed iOS platform has been key to success - Too little exploring instead of exploiting - Relay too much on finding new growing technologies
Justification Exploit existing - find new innovative markets stay within the current diversification strategy Diversification to lower customer segments by offering more products Be open for innovations - Open the platform ABC NOT SELECTED Abandoning the long term digital hub strategy probably effect negatively on the brand and loyal customer base, and the positive effects to innovativeness and R&D costs would not surpass the drawbacks NOT SELECTED Major profits from the top segment where Apple currently is positioned Cannibalization by lowering the value of the brand and unique designs SELECTED
New iNNOVATION shifts Apple back to Ultra Premium Value Benefit Apple’s new product creates even more value – Increase the competitive advantage Ultra Premium Super Premium
The most valuable company in the world Ultra Premium product - Outstanding margins Loyal customers – Good volumes +=
The iNNOVATION process Q1/16Q2/16Q3/16Q4/16Q1/17Q2/17 Revaluate the R&D function & company culture Invest more in innovative ventures Search for new acquisitions Develop the product ‘’behind closed doors’’ Launch of a new generation product Marketing campaign targeted to early adopters Key distribution via own stores to enhance the superior design Keep innovating Apple should do what it does the best – being Apple