Apple Defies Gravity with Innovative Genius
In 2011 Apple has become the most valuable brand in the world, having overtaken Google by more than $40 billion. It is hard to believe that only 15 year ago Apple was experiencing major problems and could only compete in a small niche of the computer market. Their current success was made possible through the innovative and effective business model, which allowed efficient use of the company core competencies in order to successfully compete in the market and attract more and more customers.
According to Lindgardt, Reeves, Stalk, & Deimler a business model is comprised of two components: operating model and the value proposition (Lindgardt, et al., 2009). Operating model refers to the cost structure of the company, its organization and the value chain, which defines product development and delivery to the customer. Apple is striving for improvement in every detail, trying to organize the company in a way that would enhance innovation of the employees, pursuing cost cutting through outsourcing and scale economies through mass sourcing, as well as developing new ways to approach customers, such as Apple own retail stores.
However, the major success of the company is mostly attributed to their value proposition, which clearly identifies the target segments, the right product and the pricing model. As innovation has always been a core competence of the company, Apple’s brand promise is formed around the exceptional experience with their products. That is why a large amount of money is yearly spent on R&D and product development. Apple does not only invest in new products, it also puts a lot if effort in the older ones. This allows the company to be successful in several market segments, from laptop computers to smartphones and music players.
The success of the company can be also seen in the great loyalty of their customers. Apple brand offers a unique combination of innovative technology, modern look and at the same time simplicity in use. Product creation is very much customer-driven and appeals to the emotions and passion of the users. This combination has created a very strong Apple brand, which can be considered the core competence of the company. Apple brand name is heavily used in the marketing of the new products and creates a base for the competitive advantage of the company. The success of the brand not only creates a strong barrier for the competitors through customer loyalty, but also allows the company to charge significant price premium on their products, increasing their profits even during the crisis.
The current success of Apple can be seen by the increasing revenues and customer popularity. Almost every Apple product is becoming an event in the industry and creates an enormous customer demand. Although it is impossible to know for sure the future performance of the company, Apple’s business model based on efficient positioning, the right value proposition, innovation and customer-orientation as well as on the effective operating model definitely forms a strong basis for the long term success and future brand strengthening.
Lindgardt, Z., Reeves, M., Stalk, G., & Deimler, M. S. (Ed.). (2009). Business model
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