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Case Study Example: Apple Inc. vs. Blackberry

7 pages
1834 words
Harvey Mudd College
Type of paper: 
Case study
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Overview of Apple Inc.

Recently, Apple Inc. was crowned as the worlds most valuable company. Whereas Walmart is considered to be a global corporation known for the generation of highest revenue, Apple Inc. has the highest stock valuation, which is an achievement that has given Apple a competitive edge over its close competitors. For instance, regardless of Walmarts massive volume of sales which is about three times the sales of Apple, it is worth only nearly one-quarter of Apples value (Elmer-DeWitt, 2011). The survey indicates that Apples satisfaction ratings often rank close at the top of consumer-focused companies such as Nokia, LG, or Blackberry. It is apparent that companies with weak customer satisfaction usually suffer from stock performances. This is evident in various phone companies such as LG, who have failed to oust Apple as the worlds most valuable corporation.

The introduction of iPhone 4S to the market enabled Apple to widen a significant gap between its customer satisfaction scores and those of its key competitors such as Nokia, LG, and Blackberry. According to the reports published in the spring of 2012, Apples iPhone ACSI score was 83 on a 100-point scale, with the nearest competitors being LG, Nokia, and HTC on 75 points (Lovejoy, 2013). The high levels of satisfaction among the customers affiliated with Apple, coupled with their willingness and loyalty to stand by Apples products through paying of premium prices has led to the inception of Apple cult of consumers.' This is an indication that Apple has nurtured a healthy relationship with its customers, which is difficult to be matched by its rivals in the smartphone segment.

According to consumers perceptions of Apples products, it is asserted that Apple Inc. offers products which have a superior value, which presents a significant problem to those companies trying to oust Apple in the smartphone market. For example, whenever Apple launches a new product, it charges a substantial premium over its competitors. When Apple introduced iWatch to the market, other companies such as Samsung and Pebble were already plying their trade in the smart watch market. However, this did not deter Apple from making more sales than its competitors (Lovejoy, 2013). This attests that Apples marketing strategy, which revolves around the use of premium prices, value and cult branding has played a significant role in gaining a vast dominance over its rivals.

What other Companies need to do to compete with Apple Inc.

Smartphone Company: Blackberry

Blackberry is a Canadian-based phone company involved in the development and supply of smartphones and tablets. In the 2000s, Blackberry was among the prominent vendors of smartphones, globally. At its peak in 2013, it is indicated that Blackberry boasted of 85 million subscribers, worldwide. It was among the global leaders when it comes to the provision of secure communications as well as mobile productivity (Vara, 2013). However, the dominance of Blackberry has experienced a sharp decline recently. While Blackberry is enduring the worst run in the smartphone market segment, Apple Inc. is riding high with its iPhone product line. It can, therefore, be asserted that Blackberrys woes are attributed to the popularity of the application of iOS platform, which has played a vital role in the elevation of Apple Inc. as a top brand, on the international scene.

While Apple Inc. focused on improving its brand through its effective marketing strategies, Blackberry was embroiled to a laxity that plunged the firm to the current problems that have seen its market share dwindle. Whereas Apple specialized on the general-use smartphone market segment, Blackberry persisted with its operational model of vending Blackberry products different private and public entities (Vara, 2013). Regarding Apples focus on smartphone market division, then CEO of Blackberry: Jim Balsillie in 2007chose to ignore Apples strategy by ridiculing it as an overambitious and unattainable strategy. Such sentiments against Apples iPhone series was unjustified since this model has enhanced Apples rise to the top as the most valuable and successful company worldwide.

Blackberry needs to re-strategize to ensure it becomes a competitive firm in the smartphone market, just like it was the case before the inception of Apples dominance. It is an appropriate time for Blackberry to evaluate its marketing approaches to through benchmarking of the Apples cult brand strategy. This will enable Blackberry to abandon some of the practices which have plunged it to market crises, ultimately adopting some of the marketing principles applied by Apple (Elmer-DeWitt, 2011). It will be imperative to imbibe some of the operational models implemented by Apple which facilitated it to ascend to the top as a global leader in the smartphone segment.

Blackberry should prioritize on adoption of practices that will enable it to regain its former dominance in the smartphone industry. Such approaches should ensure the company competes with global market leaders such as Apple Inc. which is currently ranked as the most successful and valuable corporation (Elmer-DeWitt, 2011). This implies that Blackberrys focus should be on Apples strategies which helped the company to build a close relationship with its brand consumers, leading to the formation of what is commonly referred to as Apple cult of consumers.' This implies that Blackberry should invest in the policies which promote the creation of loyal brand consumers, just like it is the case with Apple (Lovejoy, 2013). There is the need of exploring consumer behaviors which can be utilized in the creation of a strong brand for Blackberry. This involves the combination of different marketing techniques, which have been key in the success of Apples products.

Creation of the Product Value

Blackberry is supposed to focus on value creation for its product to improve its abilities to compete with Apple. Currently, Apple is ranked as the most valuable corporation worldwide. The survey indicates that Apples satisfaction ratings often rank close at the top of consumer-focused companies such as Nokia, LG, or Blackberry. It is apparent that companies with weak customer satisfaction usually suffer from stock performances. This is evident in various phone companies such as LG, who have failed to oust Apple as the worlds most valuable corporation (Elmer-DeWitt, 2011). This indicates that Apples ability to satisfy its customers through the provision of products with unique taste and preferences have made its products to be valued highly as compared to its rivals. It is therefore imperative for Blackberry to identify and implement value creation strategies which can improve the level of customer satisfaction for its products.

Blackberry should try to understand what drives value for its customers. The company should spend vast resources in surveys and research in the pursuit of identifying key actions, behaviors, and reactions of customers in the smartphone market (Stark & Stewart, 2015). The captured data will enable the companys strategic team to analyze and identify crucial elements and opportunities that can enhance Blackberrys efforts of developing a healthy relationship with its targeted market, just like it is the case with Apple Company.

It took Apple sometime before ascending to the top as the most valuable company, worldwide (Houriani, 2012). This involved studying of unique features associated with its cult of customers. It is apparent that customers wanted something that can make them stand out from the rest of smartphone users. Apple seized this opportunity, prompting it to add peculiar features in the series of phones it released. Such products sold in millions regardless of the premiums prices charged. It is important for Blackberry to embrace this approach to value creation, which is achieved through a deep understanding of the customers needs. This will raise Blackberrys abilities in competing with Apple Inc. which is riding high in the smartphone sector.

Blackberry should also understand its value proposition. The value that the customers gain is equivalent to the benefits of a particular product, excluding the costs of production. Blackberry should explore new features that can significantly add or create value to the customers acquiring its products. This will also involve identification of the proper pricing strategies that are convenient to the identified set of customers in the smartphone market segment. Blackberry should also analyze the amount of time that customers can devote towards buying the companys products (Lovejoy, 2013). For example, Apple realized this gap in the market is prompting it to open multiple online stores which enabled its clients to access their products with great ease. This has since played a vital role in the development of a close relationship between Apple and its customers. Blackberry should also take this route towards the creation of enormous value for its products, which will enable it to endear itself to its targeted market.

Blackberry should be consistent with its products. The company should strive to design and produce products which bear similar fundamental architecture. Consistency allows customers who already have Blackberry phones to anticipate on what is found in the new model of phones released. This enhances customers abilities to adapt to the newly released products without a hitch (Houriani, 2012). This approach has been vital to Apple products when it comes to the creation of value for its customers. For instance, when Apple released iPhone 4S, its superior benefit over its competitors was evident. The launching of iPhone 4S enabled Apple to widen a gap between its customer satisfaction scores and those of its rivals. This implies that Apple had depicted the particular form of consistency in the previous models (iPhone 2S, iPhone 3S) which increased the expectations of customers in the new series; iPhone 4S (Elmer-DeWitt, 2011). It is essential that Blackberry adopt this approach to ensure customers remained hooked and expectant of a more improved and classy product when a new series is released.

Blackberrys strategic team ought to develop a win-win pricing approach for its products. The company should set price which assures the customers that they are receiving an appropriate value as well as ensuring the company optimizes its take. Blackberry should channel its efforts towards implementation of the policies that increase the levels of satisfaction amongst its customers (Lovejoy, 2013). This plays a critical role when it comes to the success of the adopted pricing mechanisms. For instance, satisfied customers are always ready to pay more as opposed to unsatisfied customers who will look for the best alternatives around.

Blackberry need to avoid cost-plus pricing approach which involves the use of fixed multiple of product costs. This method is detrimental since it paves the way for the provision of additional margins to certain customers while at the same time losing incremental returns from others. This will hamper Blackberrys chances of competing with Apple, which offers premium prices for its products. It is asserted that the most significant problem for Apples competitors is the ability of Apple Inc. to provide a superior value to the customers. It is observed that whenever Apple introduces a new laptop, tablet or iPhone models in the market, it can charge a substantial premium over its rivals (Houriani, 2012). This implies that Blackberry can only improve its chances of competing with Apple if it adopts the premium pricing strategy. This will create an impression that Blackberrys smartphones are now at the caliber of iPhone models, thus exerting pressure to Ap...

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