M RahmanAnsoff Matrix in Apple Inc.
This article explores the application of Ansoff Matrix in Apple Inc. in detail. It examines how market penetration, market development, product development, and diversification strategies have been implemented by Apple Inc. over the years. Apple Inc. is an American multinational technology giant headquartered in California, the USA.
Ansoff Matrix was introduced long time ago by Igor Ansoff, a Russian American mathematician. It is a very useful tool that businesses can use to devise four alternative growth strategies i.e. market penetration, market development, product development, and diversification.
Market penetration strategies of Apple Inc.
The first growth strategy in this Ansoff Matrix in Apple Inc. is market penetration which refers to selling existing products/services into existing markets. It is a less risky strategy and the primary aim of pursing this is to increase the market share. Like many other organisations around the world, Apple uses market penetration strategy intensively.
For instance, the sale of more and more iPhones in the existing markets demonstrates the application of this strategy by Apple. The company implements this strategy by making iPhones available for purchase in multiple platforms e.g. Apples stores, Apple.com, and telecommunications companies such as 3, O2, Vodafone, EE, and BT.
Apple also uses promotions through media outlets, its own website, and others to penetrate further into the markets. It spends over $100 million annually on Twitter alone for advertising purposes (Bhaimiya, 2022). The total annual ad spend is many times more than that!
Apple’s advertising is known for its simplicity, minimalism, and emotional appeal, which has helped it create a strong brand identity and cultivate customer loyalty. This loyalty, in turn, has led to increased sales and market share.
Another aspect of Apple’s market penetration strategy is its focus on expanding its retail presence. Its sleek and modern Apple Stores are strategically located in high-traffic areas, making it easy for customers to access and purchase its products. It has over 272 retail stores in the United States and 28 in Canada (Statista, 2022)
Market development strategies of Apple Inc.
The second growth strategy in this Ansoff Matrix in Apple Inc. is market development which refers to selling existing products/services to new markets or regions. Since the inception, Apple has been continually developing its presence globally. It is now a global brand with its operations in countries around the world.
Apple did not confine itself to the key markets such as the United States, Europe, and China only, rather moved on to develop larger footprint in emerging markets such as India and Indonesia. This strategy is very important for it as the demand for products in the existing markets may stagnate at some point.
Product development strategies of Apple Inc.
The third growth strategy in this Ansoff Matrix in Apple Inc. is product development. Developing new products and selling them to the existing markets are called product development. Certainly, Apple has been brilliant in designing and developing new products. No wonder, why product development is the forefront of its intensive growth strategies.
Apple started its journey with Apple I, a hand-built computer. It then continued to develop new products and services such as iPhone, iPad, iPod, Apple Watch, Apple TV, HomePod, iOS, macOS, iCloud, and many others (Apple Inc., 2023). And importantly, this development is certainly on-going.
This list above shows that Apple has been persistent in developing new products to address the demands of customers and to keep pace with time. In 2022, it launched the iPhone 14 series, three new Apple Watches, a new set of AirPods Pro, a new-look 10.9-inch iPad, the Mac Studio, and others. In early 2023, it released the new Macs and a new HomePod (Haslam, 2023).
Apple has a long history of launching innovative products that disrupt the market and redefine entire industries. One of its most notable product development successes is the iPhone. iPhone has revolutionised the smartphone industry by combining a mobile phone, iPod, and internet device into one sleek and user-friendly device. Its success has played a significant role in Apple’s growth and dominance in the consumer electronics market.
Diversification strategies of Apple Inc.
The last growth strategy in this Ansoff Matrix in Apple Inc. is diversification which refers to selling new products to new markets. It is one of the riskiest growth strategies as both products and markets are new and unfamiliar. Application of this strategy is evident from Apple’s development of products e.g. Apple Watch, Apple Pay (mobile payment and digital wallet service), and Apple Card (credit card).
It is important to note that Apple started its journey with a computer product and moved on to come up with some products that are fundamentally new and different from the original ones. In fact, the Apple story is more diversified than what many people think.
Diversification has been a very useful strategy for Apple Inc. Apple has built a very diversified business portfolio over the years which has enabled it not to depend on iPhone sales too much. It can rely on a variety of products and markets if sales of iPhones go down.
Summary of Ansoff Matrix in Apple Inc.
To conclude, the four quadrants of the Ansoff Matrix represent different growth strategies: Market Penetration, Market Development, Product Development, and Diversification. Apple has skilfully navigated through these quadrants to achieve unparalleled success.
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You may also like reading Ansoff growth matrix and Understanding Ansoff Matrix – an example of Coca-Cola. Other relevant articles for you are:
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Last update: 16 April 2023
References:
Apple Inc., (2023) Jobs at Apple, available at: https://www.apple.com/jobs/uk/about.html (accessed 16 April 2023)
Bhaimiya, S. (2022) Apple spends over $100 million advertising on Twitter annually, available at: https://www.businessinsider.com/apple-spends-100-million-per-year-on-twitter-ads-report-2022-11?r=US&IR=T (accessed 16 April 2023)
Haslam, K. (2023) Every new Apple product coming in 2023, available at: https://www.macworld.com/article/671090/new-apple-products.html (accessed 16 April 2023)
Statista (2022) Number of Apple stores in U.S. and Canada, available at: https://www.statista.com/statistics/1041565/number-of-apple-stores-north-america/ (accessed 16 April 2023)
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Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
