Plan and Strategy for Ipod

PLAN AND STRATEGY FOR IPOD

Table of Contents

CONTENTS Page

Executive Summary 2

Situational Analysis 3

SWOT Analysis 5

Key Issues 5

Objectives 5

Strategies 6

Action Plan 10

Budget 11

Control 12

Executive Summary:

Apple has been positioned as a premium brand; because of this it developed a niche market in the computers industry. With a share of 4% in the computer market which is continually declining due to lack of innovative products and technology as perceived by their customers. Amongst their customers it was the brand that sold their products. Because of the gradually declining market share, Apple saw an opportunity to enter the Mp3 market which already had a couple of player in it and was growing steadily. This lead to the launch of the iPod in 2002; a premium product to the competitor at a premium price as this had always been Apple's positioning. The iPod was seen as a cooler alternative to what was already on the market and Apple became market leader in the hard drive Mp3 market, with a market share of 44.8%. In 2003 Apple had a strategy to link up their computers to the ipod, this lead to the launch of the iTunes music store. The iTunes could only be downloaded to the PC and could not be used on the PC so people would have to buy the iPod in order to listen to the music. As a supplement the business Apple introduced an experiential marketing through its stores.

When there is a lucrative market, competitors will continue to enter that market: this was true in the Mp3 market, Many competitors entered the market, and iPod lost it's initial competitive advantage as their technology became commoditized, with other competitors even claiming to have a superior product to iPod. The competitors' products were cheaper and this created a dilemma for Apple. Although apple maintained its strategy of being a premium brand offering products that are more expensive than others in the market because of their customer base, they saw a need to enter the main stream market as this market was big although not as profitable. In order to compete effectively in the core market, Apple launched the Mac mini and the iPod shuffle that is cheaper than their normal products and are more accessible to the core market which is price sensitive. iPod also partnered with Motorola, this partnership was to have iTunes installed on the latest models of the Motorola phones: this partnership did not bring much revenue for Apple.

Because of the threat that Apple faced with form competitors who have caught up with the Apple Technology and also cell phone companies who are creating cell phones with in built MP3 players. Apple should create strategic alliance with a reputable cell phone company that has a bigger market share like Nokia or Samsung. This should be their entering strategy, with a long term goal to go on their own; this will be a very tough market. In the Mp3 player market, Apple should add new features to their products eg. Camera, FM Radio, Address book, games etc. The reason for this is for them to have a differentiation strategy by out performing the competition. Apple needs to increase their market coverage by entering untapped markets like China a technologically advanced country which has a large population base which is currently growing. They can enter the China market with their current products and they can also add the new lines like the cell phone and the computers. New products like a Wireless Music downloading and audio visuals which some of their competitors have already started producing. In order to create a wider base of customers Apple can also have an alliance with motor manufacturers to have their car radios compatible with ipods. For the computers, creating a computer that has an in-built Mp3 player.

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SITUATIONAL ANALYSIS

Technological situation- Technology refers to new machinery or products, new processes, methods, and management approaches that bring about change

Technology played a key role in the consumer electronics and computer markets, this can be seen in the following :

* The market keeps on changing due to advancement in technology, and making this market a steep market to compete in: ipods can now be replaced by cellular phones. The only way to survive in the consumer electronics market was by investing in new technology and slash down the prices of the existing technology.

* The Ipod, a lustrous technological device was launched by Apple computers in 2002 and because of the technological advancements, Apple soaked up the Creative's first mover advantage to become market leader in the hard drive mp3 player market.

* Innovative technological ways to sell ipods was developed and launched by Apple in 2004 the itunes, and they became a very successful a selling tool for selling ipods.

* Heavy competition characterizes a High technology industries, this can be seen by the number of players in the consumer electronics market: Rio, one of Apple's competitors made claims of product superiority, available for a cheaper price. The heavy investment in quality control. Archos Gmini 400 which has now stepped into the future of the mp3 by manufacturing , an audio- visual player at the same cost price as an ipod mini which is the same size as an ipod but with a bigger storage capacity.

* Advances in data storage capacity, battery life and some phenomenal breakthroughs in software and hardware led to the development of post-PC gadgets like the PDA's, mp3 players, and 3g cellphones amongst others.

* Our consumers have now moved to another level in technology requirements, they now want to carry one single device for communication, entertainment (music,pictures,video) and computing..

* Through the itunes, Apple has created a link between Windows users and Apple products although the ITunes and Apple could be cut out completely by the development of wireless music