How Can Apple Increase Their Market Share?

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Case Study:
How Can Apple Increase their Market Share?

May 20, 2012

Analyze the Current Situation
Apple was founded on April 1, 1976 by Steve Jobs and for the fifth consecutive year, Apple has been named the World’s Most Admired and World’s Most Innovative Company by Fortune Magazine. “Noting the runaway success of the iPhone 4S and iPad 2 and increased sales across the board, the magazine writes: “To say it was another big year for Apple would be a gross understatement” (www.apple.com).

Although Steve Jobs was an iconic figure at Apple, even his passing did not have much of an effect on Apple’s success. It came as no surprise to many that Apple continued to prosper in a global marketplace despite difficult economic times in what has become a highly competitive personal computer market. `“The company sold 4 million Macs during the second quarter of 2012, a 7 percent increase over the year-ago quarter” (www.apple.com). However, in order to remain competitive, Apple must continue to be an industry innovator while distinguishing itself from the competition.

A big part of Apple’s success is because they use a differentiation strategy. With their high-end product offerings, personalized service and exceptional design, which differentiate their products from Microsoft and caters to loyal Mac users.

Identification of Key Problems
Apple as a brand is a household name and strong brand that is synonymous with quality and longevity. Their products offer cutting-edge technology and sleek designs are considered a must-have by many. Although Apple does not necessarily invent the market, its products set the bar high for the market and as a result, it is difficult for other companies to compete on the same level. With an extremely loyal customer base supported by clever marketing campaigns and advertising, Apple’s product sales are continuing to keep loyal customers happy while gaining market share on a consistent basis.

However, it is important to note that even though Apple is gaining overall market share, the company is finding it hard to compete in the personal computer market due to the fact that a Mac is much more expensive than a Windows-based personal computer. “In years past, PCs dominated the budget friendly market, with Macs ranging anywhere from $100 to $500 more than a comparable PC but now this price gap has lessened significantly” (www.intel.com). When purchasing a personal computer, for many people, the cost is an important and sometimes deciding factor and people want to get the absolute best personal computer for your money—one that suits your personal needs best. It is important to note in order to provide the lower price point, lower end Apple models tend to skimp on memory and hard drive space and that could be considered a definite disadvantage. Mac users need to be familiar with Windows applications in addition to the Mac’s OS system, “most computer software has a different version for Mac that you have to learn again if you already know how it works on Windows” (www.itok.net).

Even with Apple’s current hugely successful product line, there are still plenty of opportunities for the company to grow. For instance, “only 5% of business establishments use Mac computers as opposed to 95% of schools and offices that run Windows” (www.itok.net). This could be an area where Apple could expand its product offerings and gain more market share of the PC market by offering customized personal computer systems to business and schools as well as making those systems more affordable.

Another area where Apple might grab more of a market share is to continue to innovate and expand its existing product lines. Not only will they be able to gain new customers by using this strategy but also keep their loyal customers by improving upon their existing products. Overall, as previously mentioned, Apple has a very loyal customer base which has continued to expanded and grow...
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