Report by Stratego Consulting Prepared for Apple Inc Board of Director

Report by Stratego Consulting prepared for Apple Inc Board of Director

Apple is currently the world’s most valuable company, focusing its business on product design and innovation. In 2012, even if Apple has reached a strong position in mobile, tablet and computer industry, and it still generates strong revenues and profits, competition is increasingly tough and the company has to face this. Whereas its strategy was initially based on differentiation, products tend to be more and more similar to competition, thus the brand has to keep being innovative in order to maintain their sustainable advantage, and future innovative products are necessary to keep Apple’s lofty stock price. With the significant growth of Google in the smartphone operating system market, Apple is losing some market shares and need to revamp its strategy to stay the leader. The Challenge for Apple remains in how to maintain its sustainable growth and consistent profitability in all areas of the company. Fortunately, the brand image is still a powerful competitive advantage, so it has to benefit from this to sustain the company’s success achieved under Steve Jobs, and expand their sales to new customers. By aiming to achieve this objectives, Apple will increase market share in PC industry worldwide to 20%, and raise mobile phone market share to 40% in 2015.

Alternative 1: Innovation in Apple Ecosystem, to wrap around their product with innovative software and hardware that connect every Apple device.

Apple is renowned for its user-friendly products that aimed to facilitate the consumer's life. This is why, it should follow this strategy and create a stronger ‘ecosystem’, to make buyers wrap around its products and take advantage from the halo effect of its product range. One way to create this bundling is to create innovative application that will connect every apple device to another, such as an application that allows to answer a  call via Macbook, or to use facetime using mac to iPhone and iPod. In addition, Apple has to come up with an innovative wearable device to complete its ‘ecosystem’. For that purpose, Apple should reinforce iCloud platform and develop it to include more apps and more possibilities. This interaction between apple products can lead to further the brand recognition and to refresh the customer’s loyalty and commitment to buying more apple products. It will also stimulate the apple product-line selling and therefore boost the sales revenues.  

Alternative 2: Entering business customer segment by launching macbook products with motion sensor  and  business driven accessories

A customer segment that Apple can focus on would be the business area. Apple can use all its design and innovation capabilities to strongly expand to a new market and provide a new ‘Apple’ experience to the business world, by developing partnerships with all worldwide companies. The strategy is to be the number one supplier of desktop hardware and software and to propose adapted facilities and connected accessories to the business customers. The technological opportunities are numerous to create a differentiation in the market and encourage firms to join Apple’s team. The ‘Apple’ business experience includes customized meeting rooms with performing sound systems and connected presentation accessories and softwares to facilitate communication and data sharing using the iCloud system. In addition, the ‘Apple’ business experience ultimate innovation is to commoditize the telepresence video meeting and make it available for every subscriber. On a long term basis, and as an extension of this business driven strategy, Apple should invest in R&D and focus on motion sensor devices that can improve the ‘Apple’ experience and take it to another level. It has to be efficient, quick and adaptable to the products already available.