Apple is a US-based multinational technology organization that develops, designs, and sells a variety of consumer electronics, online services, and computer products. It is headquartered in Cupertino, California and was found in 1976 by Steve Jobs and Steve Wozniak (Rahman, 2018). It is one of the Big Four technology companies in the world. The company is known for its innovation, unique designs, creativity in products, and quality of the products. The company sells smartphones, tablets, music players, digital media players, wireless earbuds, operating systems, and various other hardware and software. The company continues to lead the technology market in terms of revenues and sales. The company has faced various allegations and lawsuits over the years but has managed to come out of them without having its brand reputation tarnished.
Following are the four dimensions of the Ansoff Matrix for
Market Penetration
Under this strategy, Apple attempts to sell its existing products in its existing markets. The existing markets of Apple include various nations in which it sells its products. The products are sold through Apple-operated retail shops or authorized sellers. They are also sold by third-parties that purchase and sell Apple products. The aim is to increase market share. The company also uses the strategy of selling its products through various platforms other than retail stores such as its online store. The company also lowers its prices and offers discounts on products sometime after its launch to further penetrate the market (BII, 2016). The company also offers software updates and other accessories that attract new customers and retain existing ones. The company also forms a strategic alliance with telecom companies like Verizon and AT&T to further penetrate the market. It sponsors various events and participates in technological exhibitions to promote its products. As a result, the company can increase its sales in its existing markets.
Market Development
Selling existing products in new markets is market development. Apple does this by continuously expanding into new geographic markets by opening its retail stores to allow customers access to products directly from the company. The first international expansion was done by Apple in 1980 when it opened its facility in Ireland. Since then, it has been expanding and now has retail stores in 24 nations (Apple, 2019). The company also identifies new distribution channels for each new market to suit the needs of the local consumers. It has also moved into various developing markets rather than confining itself to key markets such as India and Indonesia (BII, 2016). This allows Apple to attain greater sales as its products easily become saturated in one market soon after they are launched.
Product Development
Developing new products and selling them in existing markets is product development. Apple is the king of product development. It regularly innovates and designs new models for its smartphones, tablets, computers, and other electronic devices and launches them in its existing markets. The most famous example is the iPhone smartphone which is regularly launched with the latest being iPhone 11. Not only that, but Apple also launches various variants of the same products to further create diversity and attract customers with different technological needs. This is the need of the time as consumers desire new products after some time to take advantage of technological developments taking place. This also allows Apple to earn new customers and serve existing customers with new products. The products are first launched in the US and Europe and then in successive markets. Apple CEOs are known to themselves launch new products to further help consumers understand the technological developments which have been incorporated.
Diversification
Launching new products in new markets is diversification. Apple has launched several new products unrelated to earlier products such as the Apple Watch, Apple Card, and Apple Pay. The company has launched these new products into various new markets as well, in addition to the current markets it is serving. This is a risky approach and requires the greatest expense in terms of advertising and promotions to launch the products in a market. Apple continues to follow this approach to develop new avenues of revenue and sales to further increase its earnings. Since the company has strong cash flows and can manage risks, diversification presents less of a risk for Apple (Yarrow, 2019).
References
Apple, 2019. Apple Retail Stores, United States. [Online] Available at: https://www.apple.com/retail/storelist/ [Accessed 23 Dec. 2019].
BII, 2016. Apple is focusing more on emerging markets. [Online] Available at: https://www.businessinsider.com/apple-focuses-more-on-emerging-markets-2016-12?r=US&IR=T [Accessed 23 Dec. 2019].
Rahman, A., 2018. Ansoff Matrix in Apple Inc. [Online] Available at: https://www.howandwhat.net/ansoff-matrix-apple-apple-ansoff-matrix/ [Accessed 23 Dec. 2019].
Yarrow, J., 2019. Apple proved that it is no longer just an iPhone company. [Online] Available at: https://www.cnbc.com/2018/05/02/apple-proved-that-it-is-no-longer-just-an-iphone-company.html [Accessed 23 Dec. 2019].