Ansoff Matrix in Apple Inc.
This article explores the application of Ansoff Matrix in Apple Inc. 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 in 1957 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.
Market penetration refers to selling existing products/services into existing markets (BPP Learning Media, 2010). 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. It also uses promotions through media outlets, its own website, and others to penetrate further into the markets.
Market development strategies of Apple Inc.
Market development 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 and had long moved from home country (the USA) to many other countries in 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 Apple as the demand for products in the existing markets may stagnate at one point.
Product development strategies of Apple Inc.
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., 2021). And importantly, this development is certainly is 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 2020, it launched the iPhone 12 line-up, three new iPads, and two new Apple Watches and there were reports that the company might launch a new Apple TV and a Bluetooth tracking accessory (Eadicicco, 2020).
Diversification strategies of Apple Inc.
Diversification 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 (Yarow, 2018).
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 (Kramer, 2020). It can rely on a variety of products and markets, if sales of iPhones go down.
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Last update: 22 January 2021
Apple Inc., (2021) Jobs at Apple, available at: https://www.apple.com/jobs/uk/about.html (accessed 21 January 2021)
BPP Learning Media (2010) Business Strategy, London: BPP Learning Media
Eadicicco, L. (2020) Here are all of the new products Apple is still expected to launch this year, https://www.businessinsider.com/apple-products-launching-2020-iphone-12-apple-watch-ipad-2019-11? (accessed 21 January 2021)
Kramer, M. (2020) Despite a post-earnings plunge, Apple’s future is as bright as ever, available at: https://www.forbes.com/sites/kramermichael/2020/10/29/despite-a-post-earnings-plunge-apples-future-is-as-bright-as-ever/ (accessed 21 January 2021)
Yarow (2018) Apple proved that it is no longer just an iPhone company, available at: https://www.cnbc.com/2018/05/02/apple-proved-that-it-is-no-longer-just-an-iphone-company.html (accessed 01 July 2019)
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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.