Link to the article
http://www.thestar.com/article/693018
Summary of the article
This article talks about the return of Apple Inc. CEO Steve Jobs to an Apple launch event for the first time since his twenty six months long medical leave. Jobs urged everybody to be organ donors and later returned to unveil a new iPod Nano with a built-in camera, sound recording and speaker. Shares in Apple reached a 52 week high of US$174.47 in afternoon trading on the day of Steve Job’s return.
The topic(s) from syllabus that the article covers
2.5 Motivation, 4.3 Product, 4.2 Market Planning
Apply one business tool/theory/technique to the organization
4.3 Product
There are several product strategies involved in the article. Firstly, the return of Steve Jobs renewed consumer preference or even consumer loyalty of long time Apple customers. The 52 week high of US$174.47 for shares in Apple is evident of how Steve Jobs is such a phenomenal and spiritual leader to the company. He is also an icon of Apple who can ignite customers’ confidence in Apple’s products. Apple expands its iPod line with a new iPod Nano and cut down the price of existing iPod Touch models. The company constantly develops new products or enhances its existing products with new and improved features in order to stay competitive in the technological market, hoping to gain or maintain its market shares and staying atop as the market leader. With regard to the product life cycle, Apple’s iPod has been in the market for some time and has reached the growth/maturity stage and the company definitely wants to prolong this cycle. That is why Apple uses extension strategies such as price reduction and redesigning to attract customers to keep buying iPods and Apple products.
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Hi Ling Tung. Excellent job applying business theory to the main ideas of the article. Steve Jobs and Apple continue to be an interesting case to follow.
ReplyDeleteHi LT,
ReplyDeleteCool article you've chosen, especially I have seen how the new ipod looks like last week when people have been waving it around in Math class.
The appearance of Jobs in public definitely increases customer's confidence in the company, since Jobs plays an important role both in the company, and in the public. Returning from the 6 month long medical leave, Jobs can reassure the customers that Apple did not place itself in disadvantage because of his medical leave, the introduction of new products at the product launch event proved to the public that Apple is still doing as good as before.
The products introduced, like the new ipod nano and the new improved version of iTunes can improve on the products already developed. While i also agree with you that the new products or the new features to products can help Apple stay competitive on the market, those new improvements can also help product differentiation from other companies. I think thorough market research and product development and testing is very important to Apple's success. To know whether or not customers will like the new changes to the iPods, market research is heavely depended on.
I agree with you that the price reduction is to stay competitive on the market, but i also think the price reduction can help Apple get rid of excess stocks, i.e. the ipods of very old model. For technological companies like Apple, stay on top of the trend and also have the newest products is crucial. So by selling the new products at a slightly higher charge and reduce the price for already existing models can help the company clear out old stocks.
Randy
Apple demonstrates the benefits of having non-physical assets. In such a high technological industry, Apple is still able to maintain a reputation for having quality products, thus able to charge a premium price. Their recent price reduction is also reflective of the pricing strategy (4.4) of Apple. During the introduction of the iPod, iPod touch and iPod nano, Apple charged a high price in order to recover their losses and maintain a reputation as a premium product. As they started selling these product lines in larger volumes, they were probably able to reap the benefits of economies of scale, such as purchase economies of scale for the materials. Thus, they could lower the price of their products and attempt to gain even more market share.
ReplyDeleteHey LT,
ReplyDeleteThe redesigned Ipod Nano is the result of Apple’s attempt at penetrating the market. Market penetration refers to the production of products based on an existing market with that product already existing. This is useful for companies when a product they produce is reaching the maturity stage as it will allow them to prolong its life cycle before reaching a decline stage. This is favorable to many companies as this approach is low-risk and low-cost, guaranteeing the safety of the company if the product is a failure. And if the product design successfully attracts consumers, it can generate some more revenue for the company before the product dies off.
However, I think redesigning the Ipod Nano and adding some gadgets to it will not have much of an impact on making consumers want to buy it. Apple may have it release this product along with other marketing, promotional and pricing strategies to actually generate a decent amount of profit but by doing so; the reason for releasing this product will be less appealing due to the costs associated to it.
Even if Apple continues to release newer generations for existing Ipods, it would most likely not be popular for long as this fad had already reached its maturity stage. In my opinion, I think it would be better for Apple to have dropped this idea and spent more money on the R&D of a new product as product development has a greater potential than a product that is dying already.
Heya scholar ;),
ReplyDeleteSteve Job has definitely established himself as THE ICON in Apple. Because of his strong image, the concept of "centralized leadership" must have been implemented in Apple well. By being a "cult icon", aims and objectives of the organization can be well carried throughout from high staff morale, if managed properly.
Referring to the Boston Matrix, the iPod is continuing to be the "cash cow". The same can probably be applied to the iPhone. Really, all Apple did was change 1/2 specs, and release it as an extension strategy of the product life, because they know one fact-- the product CAN sell.
However, agreeing with Justin's point above, Apple should seriously be more focused on its research and development of more new, innovative products. One cannot expect to "milk something out of a cash cow" forever and not have the inevitable decline.
Furthermore, referring to the specific iPod nano examples, adding a camera function will unavoidably draw consumers to focus on the "variety" of functions available. Thus, this might actually place the product in even MORE competition-- especially with mobile phones.
Overall, I really appreciate the comments above. I would love it if there are more actual quantitative data available, such as the price when Steve Jobs was not in the company, and the sales figures (in percentage raised/dropped) after the new iPod nano version was released.
The overall product range of the product portfolio of Apple is definitely keeping itself at the maturity and cash-cow stage of the product life cycle. Both Apple and Steve Jobs had really developed a great product branding for the iPods. Steve Jobs has became a great icon and a living brand for Apple and its products. Moreover, the “Steve Jobs affect” and the technological advancements has also further determined the product differentiation of its Apple’s iPods and its other range of electronics.
ReplyDeleteIn terms of the extension of the products of iPod, it is much expected for Apple to cut the cost of old products and create new functions and technological advancements for its electronics. In order for Apple and its shares and revenue to boost, Steve Jobs and his team has to continuously innovate and surprise the world with more cutting edge technology electronics. If not, other ways extend it product life is do enrich the brand image like the partnership with the charity (red), which started a few years ago focusing on African children.
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ReplyDelete