Presentation of Strategy Audit Findings

Market Position Analysis

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Introduction

The interview with the mid-level manager provided deep insights about the value proposition, market position and competitive advantage of Apple’s iPad business unit. This business unit primarily specializes in the manufacture, sale and supply of different versions of the iPad such as iPad Pro, iPad Air 2 and iPad mini. The target customers of the product come from diverse demographics. Specifically, the business unit targets high-end consumers who place value on the quality, design, functionality, convenience and compatibility of the products. The iPad continues to command a huge market share relative to competitors in the tablet market. Major competition stems from Samsung’s Galaxy Note, Microsoft’s Surface 2, Amazon’s Kindle Fire HDX and Sony’s Xperia Z4 tablet. These competitors have been unable to match Apple’s success because of the innovative nature of products such as the iPad. Continued emphasis on processes such as R&D coupled with other core competencies will provide long-term sustainability for the company’s competitive advantage and source of differentiation. Relying upon the insights provided by the interviewee, this report discerns the iPad product manufactured by Apple Inc. and analyzes this specific business unit in terms of its value proposition, market position and competitive advantage.

Discussion

The target customers for the iPad comprise of individuals from different demographics. The business unit targets teenagers, college and university students as well as business people who use the device for a variety of purposes. According to Ferrell & Hartline (2014), the main target consists mainly of individuals aged between 18 and 45, an age bracket that has technology-oriented and financially able persons who can afford the iPad comfortably regardless of its premium prices. In terms of gender, the iPad targets members of all sexes.

A specific want and need for the target customers of Apple’s iPad is convenience. The iPad’s in-built features including large LED-backlit display, long battery life and superfast graphics make it a convenient alternative to other devices such as PCs. Customers are also looking for a product that is easy to use, an attribute that the iPad captures perfectly. In addition, as the interviewee notified me, customers of this product have the need for portability. Since the device is light, many consumers favor it to other products such as laptops. Some of the other specific wants and needs of the target consumers include quality, functionality and compatibility.

The iPad significantly satisfies the wants and needs of customers. As Murph (2012) vividly points out, Apple’s focus on user experience is a major factor that has contributed to the success of the iPad business unit. Other core competencies of the business unit that have enabled it to produce superior products that satisfy the wants and needs of customers include staying up-to-date with emergent technologies, initiating vibrant marketing campaigns and emphasizing on continuous innovation. The growing number of loyal customers and low levels of customer complaints indicates that the iPad has been able to satisfy the customers’ needs (Apple Inc., 2015).

In relation to the competition, iPad performs relatively well. Currently, in terms of sales, product is the leader in the tablet market. It commands a global market share of approximately 26.4% (Ferrell & Hartline, 2014). The major competitors of the iPad include Samsung’s Galaxy Note, Microsoft’s Surface 2, Amazon’s Kindle Fire HDX and Sony’s Xperia Z4 Tablet. These companies have pursued various strategies including cost leadership to deal with the stiff competition. The iPad has various features and functionalities that provide it a competitive edge. For instance, the latest iPad has up to 8 megapixels camera, a dual core A5X processor, 2732‑by‑2048 resolution, fully laminated display, antireflective coating as well as Bluetooth 4.0 technology (Apple Inc., 2015). All these features are superior to those of competitors. Moreover, the iPad has a high brand visibility. However, as I learned from the interviewee, the pricing of the iPad is substantially higher. As compared to competitors who charge on average between $200-and $350, the iPad sells between $399 and $499. The quality of the product justifies this premium charge. Hill & Jones (2011) reiterate that the differentiation is important to the customers since it provides them with superior functionalities that satisfy their needs of quality, convenience and compatibility.

The source of competitive advantage for the iPad stems from its sleek and attractive design (Murph, 2012). In addition, the competitive edge also comes partly from the reputation that Apple Inc. has built through producing innovative and easy to use products. These sources of competitive advantage are sustainable both currently and in the long-term. Through using the resources at its disposal, the iPad business unit has been able to offer greater value to customers as compared to the competitors. Competitors may find it very difficult to replicate or emulate the functionalities of the iPad because of the massive investment that the business unit puts in R&D (Murph, 2012). The product also has wide market coverage whereas the business unit has functional logistics providers, a sound financial standing and a stable source of raw materials. All these will aid in generating long-term sustainability. The iPad business unit also has programs such as the Collaborative Planning, Forecasting and Replenishment (CPFR) program that offers the organization with strong competitive advantage in the long-term. Outsourcing the manufacture of iPad to companies in foreign countries such as China further helps the business unit to lower costs and sustain a competitive edge over other competitors in the long-term.

Conclusion

Conducting the interview with the mid-level manager provided me with invaluable insights on the value proposition, market position and competitive advantage of Apple’s iPad business unit. The target customers for this product are people aged between 18 and 45 who are technologically oriented and financial able to pay the premium prices charged by the business unit for the iPad. The specific wants and needs of customers in each segment include quality, convenience and compatibility of the product with other existing Apple products. Through providing these attributes, the iPad largely satisfies the needs of the consumers. Competition is very stiff in the tablet market. Nevertheless, the iPad has managed to be sustainable and currently it is the leader in the market in terms of sales, commanding a market share of 26.4%. The major competitors of the iPad include Samsung’s Galaxy Note, Microsoft’s Surface 2, Amazon’s Kindle Fire HDX and Sony’s Xperia Z4 Tablet. The differentiation of Apple’s iPad in terms of design and functionalities has enabled the product to keep abreast of industry competitors. The source of competitive advantage and differentiation is likely to be strong in the long-term because Apple’s iPad unit continues to invest heavily in R&D in order to come up with innovative and superior products.

References

Apple Inc. (2015). Form 10-K For the Fiscal Year Ended September 27, 2014. Retrieved May 13, 2016, from http://investor.apple.com/secfiling.cfm?filingid=1193125-14-383437&cik=

Ferrell, O. C., & Hartline, M. D. (2014). Marketing strategy : text and cases (6 ed.). Mason, OH: South-Western/Cengage Learning.

Hill, C., & Jones, G. (2011). Essentials of Strategic Management. (4 ed.). Mason, OH: Cengage Learning.

Murph, D. (2012). IPad Secrets. Hoboken : John Wiley & Sons.

Appendix 1

	iPad	Galaxy Note	Surface 2	Kindle Fire HDX	Xperia Z4
Convenience	2	1.5	2	1.8	1.2
Portability	2	2	1.5	1.5	2
Quality	2	2	1.5	1.8	1.8
Functionality	1.8	1.0	1.0	1.5	1
Compatibility	1.0	1	2	2	1
Pricing	0.5	2	1.5	2	2