Andrew Dair
21/04/2014
Niagara College
E-Business Final Report
Andrew Dair Introduction to E-Business - MGT2346 Brian Glabb April 20th 2014
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The company I have decided to develop a business plan for for is Apple. I believe they still still hold a sizable market share with their IPhone, however there is room for expansion. Apple is a strong competitor in the cell phone industry however I strongly believe they can capture a higher percent of the market with a stronger business model. During the course of this paper I will discuss the main competitors to Apple, how their strategies differ and I will outline a plan which should allow Apple to continue dominating the market. Blackberry - The first blackberry was introduced in 1999 and it was a simple two way pager pa ger equipped with a keyboard for sending messages. 2003 marked blackberry’s first smart phone. This style of phone outfitted itself with standard phone functionality as well as, email and web browsing. One feature carried through the majority of RIM’s smartphone is the QWERTY keyboard. This keyboard is unique to blackberry’s blackberry’s design and separates them from the
competition. Throughout the different different iterations iterations of the blackberry, features such as enhanced screen resolution and coloured displays have been b een implemented along with constant co nstant software updates(2). Blackberry’s current phone, the z10, has been underselling in both the Canadian and US markets and RIM declared losses in their first first quarter. This has caused the company to cut back the price of their new phone from $200.00 to $50.00 on some network providers. As well, the new blackberry operating system has not been well received and is under unde r constant scrutiny by many critics (1). Overall, blackberry started strong with their original original smartphone however due to a lack of adherence with consumer demand, blackberry has found themselves on the losing end of the phone wars. Samsung – Their Their first phone, dubbed the clamshell, resembled a brick. It was a small small thick phone which only provided one service – telecommunications. telecommunications. As the years went on, popularity for flip phones increased increased which lead Samsung to develop their own rendition. 2007 marked the 2
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year that Samsung would release their their new slider phone named the Samsung Samsung moment. As the years progressed, Samsung became more aware if the potential consumer gain from phone products and in 2010 launched their first “candy bar” touch screen phone (5). These phones
include the Samsung galaxy lineup as well as the the Nexus. Samasung’s phones stand apart from from both Apple and Blackberry because they utilize the android operating system which enables a much more user friendly experience. Android is allows for a much more personal touch when Samsung Galaxy s5 has strong setting up a consumer’s phone experience exp erience (6). Currently, the Samsung sales and is leading the way in an inexpensive alternative in the smartphone market. The list price for the Galaxy is set at 200.00 for the base model. The ability to purchase exactly the kind of phone you want with a plethora of different options to fit any desire a consumer co nsumer has, makes Samsung effectively the strongest competition against the IPhone (10). The iPhone began as a simple idea proposed by Steve Jobs. He believed that phones and tablets were the way of the future and in 2005, apple in conjunction c onjunction with Motorola released the very first phone to run Apple software. Due to lack of confidence in Motorola, Apple discontinued discontinued its partnership and began developing its own new mobile phone. On January 9th 2007, Jobs revealed Apple’s phone aptly dubbed the IPhone. IPhone. This phone would support third party party apps and run Apple’s safari web browser. The IPhone was revolutionary when it was first announced and
Apple continues to innovate their phones with new apps and features (11). (11). Currently Apple is on its seventh iteration of IPhone and is continuously improving all d esigns, features and software. The IPhone is the top rated seller, even overtaking Google’s Nexus line. This past September,
Apple released the IPhone 5s which continued to have strong sales through through the first quarter. quarter. The uniqueness of Apple’s phone comes from the connectivity to their cloud system as well as the
easily operated operating system. The reputation Steve Jobs left with Apple will be everlasting
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however Apple must continue to innovate their products in order to stay relevant in today’s
market (12). Apple releases a new product every year year however the technological advancements are still far behind current generation phones. This must be improved if Apple is is to maintain the foothold they have in this industry. SWOT ANALYSIS Company Blackberry
Strengths Connectivity Push notification notification system Battery life QWERTY keyboard USB adapter
Weaknesses Low quality apps No touch screen QWERTY keyboard
Opportunities Opportunities Expand the applications library and innovate something new
Apple
Cloud Connectivity Connectivity Simple, easy to use interface ITunes enabled Safari Browser Quality materials
Small LED screens Poor battery life Lightning charger Restrictive operating system
Continuing revolutionizing their product with new features
Samsung
Open access operating system Large LED screen Good price point USB adapter
Flimsy material Confusing interface Service providers provide consumers with OS updates
Allow consumers more control over their phone – provide an even easier way to access OS software.
Threats The ever increasing demand for a more extensive smart phone with big screens and third party applications Stagnating and not introducing any new concepts which revolutionize revolutionize the industry – separating themselves from the competition Continuously downgrading materials and applications pandering to the lowest common denominator.
Some of the advantages Apple has over its competitors is its its easily accessible interface. interface. This allows for a much wider demographic as you don’t have to be a techie to understand how to use
an IPhone. The idea of cloud connectivity between multiple devices helps Apple establish establish a wide network between individual consumers. If a customer has multiple apple products, they can share and sync a myriad of photos, software and apps between all all devices (13). There integration of their already popular software, coming stock on any IPhone, means consumers 4
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understand exactly what they’re buying. This means more confidence while purchasing a product from Apple. Apple has a great reputation in terms of consumer confidence, you are buying the best made phone on the market if you pick an IPhone. The continued use of exemplary parts will only strengthen Apple’s hold in the current market. Since Apple has a foothold in the current market, taking small risks to expand ex pand their demographic, and minimize the amount of consumers defaulting to a competitor, comp etitor, will provide Apple the opportunity to grow in this competitive industry (12). (12). Enhancing the cloud software, improving the the functionality with their App store and of course, consistent updates upd ates to current applications widely used. Blackberry’s main problem comes with their small demographic. Currently, only moms, government officials and business owners use Blackberry. The phone’s major problem comes
from the lack of successful third party apps and their small library of first party apps (5). Blackberry is continuously holding themselves back due to their physical QWERTY, although a powerful tool, not realistic when approaching a new potential clients (3). Blackberry’s image is currently tarnished in the view of the public, due to the sizable amounts of layoffs inside their corporation (1). They are less likely to take any risks and will operate on an idea already implemented with substantial research. research. Blackberry is less of a threat to Apple, as they are already operating at a loss (4). Blackberry appears to be listening listening to theories and ideas internally as opposed to what their customers actually want in a device – this this is why they are failing. Samsung uses cheap parts while constructing their phones ph ones and their battery life is sub-par. Although they use a more “tech friendly” operating platform, it’s much more prone to crashes
and errors. Their library of applications applications is extensive however riddled with advertisements (8). The overall vibe behind Samsung’s line line of phones is cheap and “techie” oriented. A number of service providers which support Samsung’s lineup of phones, do not update on a regular basis 5
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which means users are often wondering if they will receive receive a new OS update. This is in stark stark contrast with Apple’s MO as they update all devices at once. On the topic of updates, Galaxy
phones are notorious for deleting applications as well as other information stored stored on the handheld without notice. Depending on the amount of “bloat ware” installed on Samsung phones can directly impact the overall speed and performance of the machine. If more add-ons are applied before consumers purchase the product, it could deter from from overall clock speed. As of right now, there is no way wa y to remove unwanted programs from Samsung phones on start-up (9). These unwanted applications can cause the consumer to feel overwhelmed and can even cause decreased battery operation. Apple must maintain the reputation of quality and continuously updates software and hardware, they the y will continue to make strides against their main competitor Samsung. Apple uses a plethora of different advertising techniques, whether it’s on television, radio or on
the internet. They most popular way to advertise any new phone is via the web however, Apple’s demographic also includes an older audience which means they also use television and
print ads regularly. Apple conveys the message of professionalism and quality through white back grounds and clean designs during promotional materials (14). They maintain the illusion of exclusivity while pandering to their demographic – basically basically if you own an IPhone you’re popular. They have a twitter account addressing any concerns related to Apple as well as notifying customers about any new products products or downloads. Print ads in magazines follow follow the same format – white, white, sleek designs synonymous with quality (14). IPhone also uses product placements in film and television. You will likely see an Apple product being used on popular television shows by main characters with their trademark jingle being u sed multiple times. Applications can be offered as free downloads downlo ads however with the inclusion of advertisements.
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This will increase download rates while offering a minimal aud ience for specific ads geared towards similar Apple products. Blackberry uses print ads in in business magazines as well well as online retail stores. Blackberry’s marketing campaign differs from from Apple’s as they are targeting a different demographic. They
still use social media such as; Facebook and Twitter to address any customer concerns and promote new software and hardware (3). Online television shows will display blackberry’s phone, with the most notable being House of cards on Netflix. Similar to Apple and Samsung, Blackberry uses viral videos to help sell their products and a nd often conveys their brand as professional, new and sleek. Blackberry tries to stay away from the ongoing war between Apple and Samsung while offering a compromise compromise to the two phones. They are not as active on the social media avenue as either Apple or Samsung however they make their presence known on video hosting websites such as YouTube and Livestream (3). Samsung offers a myriad of different advertisements – usually usually attacking their main competition, Apple. The too offer print ads, online ads and host a number of different online social feeds. feeds. Their main use of social media comes from websites such as: Tumblr, Facebook, Twitter and Reddit. They are known for their numerous viral internet videos through online hosting sites like YouTube. Samsung is known for their use of viral videos, targeting targeting the online communities on such sites like Reddit (7). (7). Currently, they are more popular online and this greatly impacts impacts Apple’s sales. Since their main demographic consists of tech users, Samsung has a lot of
opportunities to develop an online presence presence with a virtual following. following. The concept of participatory culture through online forums enables Samsung to continue building a large consumer base without the actually need for paid advertising. Their strength comes for recognizing the ever changing impact the internet internet has on their profits profits and they cater to it (7). Fan 7
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boys of Samsung will actively go out of their way and attack the dwindling Apple community through online forums and discussion boards. The business model I have develop for Apple expands on their already existing customer base while taking into consideration market market forces as well as their aging demographic. IPhones are typically expensive, even if Apple offers them at a reduced rate (IPhone 5c) 5c ) the price point can sometimes be a deterrent for for new customers (14). Apple needs to continue their line line of inexpensive phones however marketing it at a reasonable price while separating it from their main line while maintaining the concept of uniqueness and quality. Markets continue to fluctuate and with the new law ending 3 year contracts, lowering the price of the IPhone may make it a viable option for new customers. Apple’s main focus is on hardware and software and each are interconnected. ITunes makes it
easy to download music, movies and books while linking it to one account. Their IPhone is basically a smaller version of their IPad and that’s why their phon e is so attractive to many users. If you own an Apple product, you know exactly what you’re getting – a great product. The main
problem the IPhone faces are its current restrictions as well as not improving hardware exponentially. Apple has released a myriad of new phones however the technological advancement in each device doesn’t compare to new tech on the market (14). The screen size as
well as the internal hardware cannot compare to their current competition, Samsung. Samsung. The IPhone 5s introduce some small new features but nothing revolutionary. revolutionary. If Apple is to maintain their foothold in this market, they need to begin innovating instead of duplicating previous successes. Apple should focus on unrestricting access to their OS and allow user to “unlock” their devices. This would bring back a small majority of users from android which could lead to a more positive online experience. 8
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Maintain a positive virtual presence is another area Apple can improve upon – they they need a stronger foothold online to improve the attitudes of online online consumers. Bring focus back to Apple’s core values and users will support Apple. Applications are great on the IPhone IPhone however
Apple needs to be ever-expanding, making sure they are ahead if the competition with the hottest apps. Apple needs to reach new consumers with with their already established established products. One demographic yet explored by Apple includes the the baby boomer generation. IPhones generally are very simple to use and the price point is perfect for an older generation. generation. In order to capitalize on this market, apple will need to make a higher resolution screen and improve the hardware inside. This would be a great line for Apple while keeping the inexpensive inexpensive and “techie” lines, they can add a new line dedicated to this older market. Advertising also needs to
be geared toward this broadened demographic and expanded on virtual and ph ysical mediums. This means the increase in print ads, radio and television commercials and online advertisements. Designing the interface in conjunction with with the overall sleekness of the IPhone IPhone will help continue to build the concept of quality over the competition. Apple has a great reputation for security and is actively against fraud, of all types (15). The easily identifiable log gives consumers confidence while shopping at an approved Apple retailer. Apple uses high tech security measures to ensure that user’s information is always protected however, with new threats emerging every da y, it’s important for Apple to continue working
diligently on security procedures. procedures. The new IPhone will be made by only quality approved factories and Apple will take an even stronger stance against counterfeit counterfeit phones. Constant benchmarking on new hardware will ease consumer minds as it makes certain all specs are authentic and secure.
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Apple will need to maintain a strong communication commun ication link between consumers, if they are to implement a “pull” model supply chain (16). With constant updates from consumer, Apple can verify any issues with pieces coming through different factories and address them accordingly. This model better serves Apple than the traditional “Pu ll” model which ignores customer
feedback. Competition in this industry is fierce and it’s always important to focus on consumer demand. IPhone components are assembled all over the world and account for over seven hundred thousand jobs and Apple pays a vital vital role in both Canada and the U.S. (17) This will mean continued support of their existing supply chain c hain as well as more jobs to accommodate their new line of phone. Samsung holds a strong presence online and an d in order for Apple to regain lost ground, social media presence must be dramatically dramatically increased (7). An overall message needs to be conveyed to consumers – Apple Apple believes in quality products while innovating the devices with every iteration. Social media websites like Twitter, Twitter, Reddit, Tumblr and Facebook are perfect perfect avenues to address growing concerns with their consumers and instill a sense of comradery between online users (14). This is free advertising and will go a long way in bolstering sales and fans will advocate on the side of products. If Apple decides to follow this business model, their sales should increase by forming a solid virtual relationship with current consumers and establishing confidence in new consumers – both both old and young. Managing their supply chain, effectively integrating integrating the new line of devices geared towards an older demographic, will continue Apple processes running smoothly and efficiently. We will measure Apple’s new market control by reviewing technique s discussed above and their
effectiveness. Viewing the sales figures for the new line of IPhones IPhones will help us gauge if our 10
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theory of innovating and expanding was successful. successful. We can conduct focus groups and think tanks withholder consumers which will provide valuable feedback into our line of phones designed for them. We can monitor online social media websites, reviewing how Apple is perceived to the online community. We can create new videos explaining our innovating new technological advancements as well as television commercials for a shorter exciting experience. We can monitor views on both the web’s advertisements as well as the television commercials.
These numbers will help us understand the consumer feedback and allow us the opportunity to expand if necessary. While maintaining our “pull” supply supply chain, we can gather information from
consumers and what they like and what they don’t like. Hopefully we will garner garner positive attention with an increased amount of jobs which wh ich will strengthen the attitudes of our consumers.
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Bibliography 1. "BlackBerry Loses Its Bread and Butter as Bold and Curve Sales Finally Collapse." Engadget . N.p., n.d. Web. 21 Apr. 2014. 2. "BlackBerry Timeline: A Look Back at the Tech Company’s History." Global News. N.p., n.d. Web. 21 Apr. 2014 3. "Advertising Service." - BlackBerry Developer . N.p., n.d. Web. 21 Apr. 2014. 4. "Blackberry "Blackberry Posts $5.9bn Annual Loss." BBC News. N.p., n.d. Web. 21 Apr. 2014. 5. Austen, Ian. "BlackBerry Sees Hope for Future in Security." The New York Times. The New York Times, 28 Mar. 2014. Web. 21 Apr. 2014 6. "Samsung Galaxy S5 Sales Double S4, Driven by 4G - CNET." CNET . N.p., n.d. Web. 21 Apr. 2014 7. "Samsung's Marketing Blitz vs. Apple: Effective, but Big Data Would Help | ZDNet." ZDNet . N.p., n.d. Web. 21 Apr. 2014 8. "Problems at Samsung?" CNBC.com. N.p., n.d. Web. 21 Apr. 2014. 9. The Wall Street Journal. Dow Jones & Company, n.d. Web. 21 Apr. 2014. 10. "SAMSUNG." Samsung. N.p., n.d. Web. 21 Apr. 2014. 11. "History of the IPhone." Wikipedia. Wikimedia Foundation, 21 Apr. 2014. Web. 21 Apr. 2014 12. "Chipworks." Inside the IPhone 5s. N.p., n.d. Web. 21 Apr. 2014. 13. "Analysts: Apple IPhone Sales to Be Flat, IPad Sales to Slow While Investors Await New Products." FierceWireless. N.p., n.d. Web. 21 Apr. 2014 14. "Apple - Advertising." Apple - Advertising. N.p., n.d. Web. 21 Apr. 2014. 15. "What Apple's Very Serious Security Problem Means for You." The Globe and Mail . N.p., n.d. Web. 21 Apr. 2014 16. Trites, Gerald, and Jefim Efrim Boritz. EBusiness: A Canadian Perspective for a Networked World. Toronto: Pearson Prentice Hall, 2011. Print. 17. "Apple - Jobs at Apple (us)." Apple - Jobs at Apple (us). N.p., n.d. Web. 21 Apr. 2014.
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