How to use market growth and market share to develop strategy
Strategic management is a dynamic process that changes course with change in a number of factors to ensure that the corporate’s mission is achieved best. It entails analysis, decision making and taking an action towards the achievement of the firm’s objectives. A strategy is a plan that is adopted by an organization especially in a competitive environment that enables it to enjoy an advantage over the other rival firms. A marketing strategy is therefore a plan by a firm which is adopted by a firm after a close analysis of the market and their resources which enables them to increase their sales and on the other hand maintain a competitive advantage over their rival firms in the market.
Before any firm ventures into the manufacture of any product it has in mind the prospective market (Kottler and Keller, 2005, 465). A single market may have numerous firms producing close substitute product but there may be variance in the price and quality of the products. Various firms serve a different proportion of the market. Some firms control and occupy a larger share of the market while others occupy a negligible part of the market. For a company to maintain or improve on its market share, some sound strategies have to be formulated by the firm. A company may experience market growth depending on the strategies used.
The Apple Inc. is a renowned manufacture of technological products. It is a multinational company based in the United States of America and its products are sold all over the world. It sells a number of consumer electronics which include; computer hardware, computer software and personal computers. Their brand names includes; the iPod music player, iPhone smart phone, the iPad tablet handheld personal computer, the OS x and iOS computer operating systems, the safari web browser and the iTunes. The company was founded in 1979 and boasts to be the world’s second largest information technology company and is among the top most sellers of mobile devices. The apple brand has been admired all over the world. The company has experienced a rapid market growth in the last span of ten years and now boasts a large market share in the world’s information communication technology market.
In developing a marketing strategy for the jumbo Apple Company the company has to consider internal as well as external factors in respect to the market situation. The strategies should change from time to time depending on the market environment (Jobber and Chadwick, 2012, 234). The company can employ marketing growth as well as the market share to develop a strategy.
Marketing growth strategies involves employment of the market behavior knowledge. Being a large company with numerous resources, use of market growth to develop a marketing strategy is highly achievable. This chiefly entails marching the marketing opportunities and the company’s resources without forgetting the company’s objectives. Market growth can be defined as a bid to increase the sales of a firm in the existing markets and the introduction of the products into new markets (John and David, 2012, 473). Market growth also involves creation of new products or tailoring of existing products to get new uses in a bid to encroach the market.
To ensure that the market development is used to build new strategies a number of factors have to be put into consideration (Morden, 2007, 174). One of these factors is the attractiveness of the new market the Apple Company wants to encroach. Investing in creating markets in some geographical areas would be a waste of resources (Simerson, 2010, 278). Not all regions have adopted sophistication in terms of communication. Some areas especially in the poverty stricken continents still use low quality cheap products in communication or no mobile devices at all. It would sound ironical if the Apple Inc. tried to expand its market in Africa by intensifying its marketing strategies in the sub-Saharan Africa. There are countries in which the Apple Company has not deepened their market in them. These countries may however have a great potential of purchasing their products. This includes the Middle East. This is an attractive new market which has a potential of increasing their total annual sales by a great deal. Therefore it is advisable that they consider first the attractiveness of the new market.
The second factor that the company should put into consideration before using market development to create a strategy should be the availability of resources and their willingness of the company to commit them. Some market expansion plans may require intensive capital expenditure to achieve. Expansion of the market requires capital resources as well as human resources (Simerson, 2010, 295)). Therefore it would be of great importance for the company to evaluate first the kind of market being intruded, the resources required and the power of the company in respect to the requirements. For example some regions would require intensive advertising and promotion before they would purchase the products while other would call for less advertisement and less product promotion before purchase
The third factor the Apple Inc. would have to consider is any modifications or rather adaptations that would be necessary for the company in covering new markets. Entering into new markets would have some obstacles. It would be necessary if the company evaluated if it had the time and the power to overcome any obstacles encountered (Morden, 2007, 234). The Apple Inc. is a multinational firm however some obstacles which include government regulations in different continents and countries would be a barrier to their activity especially in development of new markets. Some countries may enact legislation to protect their young information technology industries.
The fourth factor to put into consideration is the competitive advantage in the new markets. A competitive advantage is an advantage that accrues to the firm over other firms that may be as a result of better quality and better pricing (Jobber and Chadwick, 2012, 463). Therefore it would be necessary for the Apple Inc. to evaluate the new prospective market’s status, evaluate the other technological products in that market, their market price, quality and their utility to the consumers. This would enable the company to establish possible modification of their products or revision of their prices. Competitive advantage is of great importance in a multiple seller market. It ensures that one firm is ahead of the others in sales and preference by the consumers.
The fifth factor would be comparing the advantages of new markets and their disadvantages. In some situations the advantages of market development may surpass the handicaps (John and David, 2012, 345). In this case after weighing the two then it would be advisable that the Apple Inc. expand its market to areas with such situations. In some regions, the drawbacks and the bottle necks would exceed the benefits of escalating the market. In such situations then it would not be advisable for the Apple Inc. to impinge such new markets.
It would also be necessary for the company to establish it strength and weaknesses. It would be of great importance for the company to carry out a SWOT analysis prior to expanding and developing new markets. The SWOT analysis basically involves analysis of a firm’s strengths and weaknesses, the threats and opportunities (Kottler and Keller, 2005, 278). This would give a good direction to be taken in capturing new markets for this technology giant, the Apple Inc.
In their bid to ensure market growth it would also be necessary to establish well defined sales and marketing strategies. The main objective of expanding the market or market growth is the increment of sales for the firm. Consequently, this would necessitate the presence of strong sales and marketing strategy that would ensure proper sales in the new markets gotten into by the Apple Inc. this would involve a proper study of the market prior to the expansion. This prior study is referred to as pre-feasibility study in a technical term (Jobber and Chadwick, 2012, 375). It enables the marketers to establish the viability of that particular market in terms of future sales. It would be good to have a rough estimate of the possible sales in a given location and compare them to other area hence establish which is the best area to expand to.
The market growth can be used as a marketing strategy in various ways. The first would be establishment of new geographical markets. The Apple Inc. is a multinational company. However, the company has not done it sales to all geographical locations on the earth’s surface. Consequently in this bid to strategize its marketing it would be of great importance if the Apple Inc. expanded its sales to new Geographical regions. Entry into new markets with a prefeasibility test done prior would definitely result in the increment of the aggregate sales (Morden, 2007, 278)).
The other market expansion strategy would be expansion of the Apple’s brand and improvement of the currents product utilization. Currently in the world the information and communication technology sector has experienced a massive growth. Formulation of new and unique products in the same line would be a milestone in encroachment of new markets (Kottler and Keller, 2007, 478). There also exists a great potential to improve and increase the satisfaction yielded by the current Apple Inc.’s. Products. Consequently improvement of their current products to higher standards would enable them to jet into new markets. For instance they may introduce children laptops. The company can also tailor their computer operating systems and other soft wares to meet more needs of the consumers. This would result in expansion of their market as more people would be attracted to their products.
To such a large company like the Apple Inc. the distribution channel is quite large and complicated. Their distribution of their products in the market determines to a great extent the aggregate sales of their products. The choice of the distribution channel may influence the sales made and the markets reached. If the company would wish to expand into new markets it would be necessary to find the best distribution channels to ensure that their products are available and their after sales services are also available to their customers. This would mean that new procedures that are more viable be applied in the distribution of the products. This includes increasing the number of the distributors as well as diversifying their physical location. These efforts would result in the market expansion of the Apple’s products.
The other effort that would be required in expanding the market of the Apple Company is the pricing policies. Most of the customers are mired from purchasing the Apples products by their relatively high prices. Price of the product is interrelated to its demand and supply. Therefore, it would be of great importance if the Apple Inc. revised the price of all their products to make them more affordable to the consumers. Affordability would mean increased sales of the products.
The market share can also be used by the Apple Inc. as a strategy to reach more market and hence increase their total sales as well as revenue. Market share is the percentage of the market total sales that is earned by a given firm (John and David, 2012, 345). It can be expressed as the command of the company in the market. In this respect a company can be termed to be a market leader if it commands the greatest market share. On the other hand the other firms with lower market shares are called market followers. The Apple Inc. is a multinational company that commands quite a big share of the total technological market share. It is estimated to be the third largest seller of mobile devices. Improving the market share is a strategy embraced by many companies. The Apple Inc. can also use this as a strategy.
The primary purpose of investments is to raise more revenue for any money that is invested that is, the capital (Kottler and Keller, 2005, 435). Therefore it is important for any company to command a better part of the market in this bid. In order to improve the market share a number of information has to be put into consideration. The Apple Company can increase its market share by first studying the business environment. They also have to study their internal structure which includes their resources. After the study, the company is in a position to establish the strengths, weaknesses, threats and opportunities in the market.
After they are through with the market study they can set strategies on how to increase their market share. This may include use of product promotion methods or even tailoring the products to meet the needs of their customers. It is also important for the Apple Inc. to study the methods used by other giant corporations like the Samsung Company, the Nokia Company and the Hewlett-Packard Company. This enables the company in setting up unique strategies that beat those of their rivals and hence increase their market popularity.
A blend of the two, that is the market growth and the market share, the Apple Company can have the best marketing strategy. If they expand the market to sell their products to places which did not previously receive the product the increase their market share, therefore the combination of the two can be referred to as a strategic plan. It would result in more sales of the Apples brands and hence more revenue would accrue to the company.
John, F and David, J. (2012). Foundations of marketing. New York: McGraw-Hill.
Jobber, D and Chadwick, F. (2012). Principles and practice of marketing. New York: McGraw-Hill.
Kottler, P and Keller, K. (2005). Marketing Management (14th edition). New York: Prentice Hall Pearson.
Morden, T. (2007). Principles of strategic management. New Jersey: Ashgate Publishing.
Simerson, K. (2010). Strategic planning. New Jersey: Ashgate publishing LTD.