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- Steve Jobs
Differentiation is used by Apple to create offerings tailored to a specific markets overseas, and to stand out from the competition internationally. Through this strategy, the company has been able to establish a strong presence around the world.
Differentiation is the idea of making your company's product stand out from other similar products through marketing.
We will explore how the company's slogan "making technology so simple that everyone can be part of the future" set the stage for the next generation of consumer technology. Steve Jobs, the co-founder of Apple, insisted that they take a "consumer-first mentality", as they make advancements in technology more accessible for consumers.
The Apple brand has done a great job in taking the concept of simplicity and stretching it across its entire story. They have also used it to guide their approach to the buying experience. They go out of their way to help consumers get the best experience possible.
By narrowing the potential benefits of the Apple brand to three key functional benefit zones: life, sensory appeal, and the experience, Apple aims to make technology more accessible and help people feel more connected.
Apple's global expansion timeline
1976 - Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computer, Inc., to develop and sell the Apple I personal computer. However, the company suffered from various problems, including its high cost and limited application library.
1980 - Cork is Apple's first location for Europe, the Middle East and Africa headquarters. The facility opened in 1980, and it is the company's first outside of the US. Its sales and distribution operations are also handled at the same office in the same region.
1984 - Apple launched the Mac, the very first personal computer to come without a programming language. The announcement was made through a television advertisement that debuted during the Super Bowl.
1993 - Apple's world headquarters is in Silicon Valley. The company's campus has six buildings with a total area of 850,000 square feet.
1997 - Steve Jobs launched the company's online store. The stores were incredibly successful, and within three years, Apple had reached annual sales of over US $ 1 billion. Over the years, Apple has expanded its geographical reach and opened more stores globally. The company's robust product sales have helped it become one of the top-tier retailers globally.
2001 - Apple launched its first retail stores in California and Virginia. In October, the company debuted the iPod, which was a phenomenally successful product and has sold over 100 million units.
2014 - The original Apple Watch was first introduced in 2014. It was followed by a wearable device with health and fitness tracking features in 2015.
2015 - Apple opened its third headquarters in Israel, which is in Herzliya. The facility has a total of around 800 employees.
2017 - Apple introduced the HomePod, a smart speaker that competed against the Amazon Echo and other similar devices. In 2018, the company acquired Shazam, a company that specialises in music, TV, and advertising recognition. The acquisition was reportedly worth $ 400 million.
2018 - Apple was the world's largest publicly traded corporation. On August 2, 2018, it became the first US company to reach a $ 1 trillion market value.
2020 - Apple is the world's biggest publicly traded technology company by revenue and since January 2021, has been regarded as the most valuable company in the world. It is part of the Big Five American companies, alongside Amazon, Google, and Microsoft.
Apple's global branding strategy
Apple is one of the world's most recognisable companies. Its success is largely attributed to the company's core values:
Accessibility
Educational support
Carbon-neutral
Inclusive work environment
Privacy
Equity and justice
Supplier responsibility
These values dictate how the company operates in both home and overseas markets and contribute to the development of its global branding strategy.
One of Apple's values is to become carbon-neutral. To achieve this, the company set a goal to only use clean energy by 2030. This does not only apply to the company's headquarters but also to its operations worldwide.
To ensure all its core values apply well across regions and languages, Apple adopts a standardisation strategy.
Standardisation strategy is a strategy used by businesses to create a consistent brand experience across the globe.
With standardised global branding, Apple treats the whole world as one market and provides the same kind of products and services to everyone. This strategy allows them to get the most out of their technology and can meet the varying needs of people in different countries. Another benefit of standardisation is cost reduction. For example, by making the product the same everywhere around the world, Apple is able to reduce its marketing expenses as customers all over the world know what to expect.
There are three important values in Apple's global branding strategy:
The company's values are rooted in its belief that people should be able to rely on technology to solve their problems.
The company has a unique visual style and vocabulary, which is reflected in its product design and advertising.
The company's goal is to create a connection with its customers that is deep and meaningful. This can be done through the creation of trust and the introduction of new products.
Apple's global marketing strategy
Through Steve Jobs' vision and the company's technological breakthroughs, Apple has been able to expand and market itself globally. Nowadays, Apple devices can be found all over the world.
The company's global marketing strategy is based on four pillars:
Wide acceptance of the products introduced by Apple globally reflects the company's major international strategy ie, iPod, iPad, iPhone, iTunes etc.
Brand value is gained by being able to establish a strong presence in the overseas market.
The competitive advantage that Apple Inc enjoys through its differentiation strategy allows it to take on the challenges posed by its rival firms in the overseas market.
Low imitation, as through its differentiated strategy, Apple Inc has been able to create products that are not only superior to those of its competitors but that also require the company's employees to develop innovative ideas.
To understand this better, let's take a look at Apple's marketing and market penetration strategy in China:
China is a lucrative market for many multinational companies. However, it is not easy to penetrate the Chinese market due to the high level of competition.
Despite initial setbacks, Apple's marketing strategy proved successful. Its success has been driven by a mix of pricing strategies, a deep understanding of local customers, and a focus on middle-class consumers.
As for market penetration, Apple distributes its products via both direct and indirect channels:
- Direct distribution channels include Apple's own retail stores, set up in various locations to display the company's products and provide customer support.
- Indirect distribution channels include intermediary organisations, suppliers, retailers.
A large number of Apple suppliers are also located in China. Out of 809 Apple production facilities worldwide, China accounted for 380, or more than one third. Goertek and Luxshare are the two biggest China-based Apple suppliers.
Apple also formed joint ventures in China to make its products and services more accessible to customers. For example, in 2017, the company opened a new centre to support iCloud users there. Apple also entered a partnership with Luxshare to produce Airpods.
To learn more about the different modes of market entry, check out our explanation on Market Penetration.
Besides China, Apple is also a part of many emerging markets such as India, South America, and the Middle East.
Apple's global expansion can also be put down to its years of experience and innovative marketing strategies.
Through extensive marketing, Apple was able to successfully penetrate the Indian market by targeting two companies, Vodafone and Bharti Airtel.
Due to the immense popularity of the iPhone in India, Apple decided to lower the prices to gain more traction in the country. This was also beneficial for them as they were able to create a first class retail experience in various cities.
Apple's Global Tax Strategy
To significantly reduce their worldwide tax liability, Apple has set up a financial operation (a subsidiary company) called Apple Sales International (ASI) which is registered within the Republic of Ireland (ROI) to benefit from a low corporate tax rate (12.5%).
Having registered ASI within the ROI, Apple has taken further advantage of the tax legislation within the ROI by negotiating a tax rate with the government. Since the tax position of ASI within the ROI is not strictly clear, as Apple operates in multiple countries, Apple has used this situation to negotiate a corporate tax rate of just 1.8%.
This has clear advantages for Apple. But there is also an advantage to the government of ROI. This is because ASI is simply a company registration, and it would cost Apple very little to move ASI to a different country. If that were to happen, then the government of ROI would lose the tax income that they receive from Apple.
Conclusion
The company's goal was to expand its market share globally by developing a strategy that would allow it to gain access to various international markets. For its global operations, Apple focused on three key business drivers: creativity, innovation, and added value. The company's goal is to gain a competitive advantage over its main competitors. Through innovation, Apple can provide consumers with unique products that are aligned with their changing needs.
Apple Global Strategy - Key takeaways
Differentiation strategy is used by Apple to create differentiated offerings in the overseas market.
The brand is known for its unique, innovative products, imagination, emotion and experience.
A standardisation strategy is a process that Apple uses to reduce its expenses and improve its efficiency.
The company's strategy focuses on creating a differentiated product line that provides high-quality mobile communication.
Apple distributes its products through both direct and indirect distribution channels.
The company's global marketing strategy is based on four pillars: wide acceptance, brand value, low imitation and competitive advantage.
Sources:
Kenyie Shofner, Thinking Differently: Why Apple's Brand Succeeds Worldwide, United Language Group, n.d.
Apple Globalization & Global Strategic Planning, Assignment Help Experts, n.d.
Graham Robertson, Apple case study: How Apple builds everything around simplicity, Beloved Brands, n.d.
Apple Inc., Popular Timelines.
Apple Mission Statement, Vision, & Core Values, Business Strategy Hub, 2021.
Apple’s Growth in Chinese Market, Grin, 2012.
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Frequently Asked Questions about Apple Global Strategy
What is Apple's global strategy?
Apple uses a standardisation strategy to create a consistent brand experience across the globe. This ensures that all its core values apply well across regions and languages.
Does Apple use a global standardization strategy?
Yes, Apple uses a global standardisation strategy for its branding. With standardised global branding, Apple treats the whole world as one market and provides the same kind of products and services to everyone. This strategy allows them to get the most out of their technology and can meet the varying needs of people in different countries.
What is the competitive advantage of Apple? How has it contributed to the success of Apple?
Apple's competitive advantages include differentiation and simplicity. Differentiation is used by Apple to create offerings tailored to specific markets overseas and to stand out from the competition internationally. Additionally, the Apple brand has done a great job in taking the concept of simplicity and stretching it across its entire story.
How does Apple use differentiation strategy?
Differentiation is used by Apple to create offerings tailored to specific markets overseas and to stand out from the competition internationally. Through this strategy, the company has been able to establish a strong presence around the world.
What strategies has Apple implemented to keep its costs down relative to its competition?
Apple outsources parts of their production to decrease its costs. The company also benefits from certain tax advantages as Apple has set up a subsidiary company abroad.
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