APPLE: DECLINING SALES VOLUME Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

APPLE: DECLINING SALES VOLUME Case Study Solution

Appearance:

Apple Inc. is following the same design since number of years in its all new models. This things leads to the unhappiness and dissatisfaction level in customers with the new Apple Products and models just because of the small change in design of models from previous ones. By getting the same design and logo of the company, customers get bored, they want new style and design of iPhone in every different model from previous one in order to differentiate the model just not because of its features but also with its appearance.

I Phone Operating System (IOS):

I Phone operating system as compared to the Google’s Android operating system, are slow and required to be updated after every one year. The iPhone operating system has fewer features as compare to the Google’s Android operating system. Smart phone users are normally preferred Google’s Android operating system because it has the partly open source system with the customizable basic features from the top to bottom. Google’s Android operating system is easy to use while iPhone’s operating system is more privatize than Android. IOS needs iTunes to transfer the materials from one system to another and for download something. That is why peoples more prefer the Google’s android operating system in its smart phones just because of its flexible usage as compare to the iPhone operating system.

Retention Rate:

Mr. Goldman Sachs says in his article that when customers will be happy and satisfied with the quality of your product and like it, its holding period will be more as compared to those that they dislike. If the holding period of company’s existing product will last more, it will affect the company’s future sales when it introduce the new product line or new item.

Same is the case with Apple products. Customers holding period of iPhone previous versions is high, which is why the advance version sales of iPhones are less in volumes because the existing customers are highly satisfied with the performance of previous product and do not want to change or replace it with the new ones. Through this, growth of Apple products is declining specially for iPhones (Kanter, 2018).

High Prices:

The high prices of Apple Products are another reason for decrease in the volumes of sales for Apple Computer Inc. globally. These high prices products can only be purchased by the high income holders who have the high per capita income level. These high prices are beyond the control of laymen citizens of under developed countries, to catch and afford. That is why the Apple’s target market is limited and has the low chances for huge growth in this segment due to the high retention level (as mentioned and explained above).

Security Risks:

At the end of the fiscal year 2017, Apple’s customers had faced the great security risk. These security problems includes with the roots in Macintosh operating system and Home kit on iPhone operating system. These issues led to the high customer dissatisfaction level because the iPhone users found the number of bugs’ insides the phones with the crashes of catalyst in iPhones and the problem with the Wi-Fi portals snooping with the LTE access on Apple watches (Ritchie, 2017).

Loyalty Status:

There are the four loyalty statuses of the customers that can shift the brand loyalty at any time when they see some problems in it. The four loyalty status of customers is described below.

Hard Core Loyal: These are the true customers of the brand that will not shift from ones to another in any stage of brand.
Split Loyal: These customers are loyal ones but not maintained their loyalty with only one brand. They had the loyalty with two or more brands.
Shifting Loyalty: These customers shift their loyalty from one brand to another when they see some issues and problems in that brand.
Switchers: These customers are not loyal with any of the brand. They purchase the products when they see good and attractive features in any of the brand.

ACTION PLAN

ENHANCING THE QUALITY:

I Phone has come up with the same appearance since i Phone 6 and they have used the same appearance in the brand new iPhone X. As it has been discussed that people are getting bored of the old design. A simple cure to this problem is that iPhone top management should think to bring innovation in their design. They have changed the size of the newer phone but the appearance remained the same. Therefore, for the next iPhone, company’s CEO Tim Cook should heavily ensure that they are not increasing the screen size but rather giving it a new look. By getting the new, the company would be able to attract newer audience and hence can increase their customer base.
People are annoyed by the slow processing of IOS after using it for just two years. As discussed, the slow processing speed after couple of years have reduced down the customers. Hence, Apple needs to make sure that the IOS doesn’t ask for up gradation after every year or couple of years. They have to fix the bugs that are causing problems for IOS to slow down.
I Phone doesn’t give the downloading option from other sources makes life difficult for its user as they have to download the iTunes software to download each song. To make life easier, Apple should remove the condition of downloading music directly from the computer. It has to follow its rival android as it allows the music and videos to be downloaded directly from the folder in the computer.

IMPROVED BATTERY LIFE:

As i OS 10.2 update has caused battery drain, the iPhone manufacturers have to bring in a larger battery with a more efficient A 10 Fusion chip. (channel news asia, 2018 )

Down Pricing:

As there is the small target market of Apple products due to the high prices which cannot be afforded by a layman. This thing is highly impacting the sales volume of the Apple products because the small size of segment target by Apple Computer Inc. To increase the volume sales of Apple products, Apple Inc. needs to go for down marketing pricing technique in order to make affordable for the middle level income group. This will led to the growth in sales volume for the Apple products.

Apple Inc. had high goodwill in the market. That is why the customers have the strong beliefs on Apple Products. If the Apple Inc. goes for the down market techniques than it will increase the sales volume of the company as compare to its rival products as well as increase the profit for the company.

EXPANDING MARKETING BUDGET:

Apple needs to spend more budgets in its marketing with high innovative ideas because the Apple’s competitors, Samsung and Huawei are spending more of their budget on the extremely attractive and interactive marketing techniques in order to attract more customers towards their products.

CONCLUSION

Apple has shown a good progress in revenue generation but its basic concern is the declining sale volume. The concerned is caused by tough and cut-throat rivalry with its other two competitors Huawei and Samsung. Out of the two, Huawei has given a tough rivalry to iPhone by coming on to the second spot in gaining the market share. The other reasons is its same appearance since couple of years. Other than this, people have also complaint about iPhone’s high prices because of which it is becoming increasingly unaffordable to buy it.

To combat the rivalry, iPhone should look to advertise its products in a much better way than its rivals in order to reach its new target market. Other than this, it needs to maintain higher quality and with which it has to reduce its prices so that it can give tough competition to Huawei. Hence, Apple’s CEO will have to formulate better strategies to regain its lost market share.

EXHIBITS

Exhibit 1: iPhone sales data (in units)