Andrew Dair

21/04/2014

Niagara College

E-Business Final Report

Andrew Dair
Introduction to E-Business - MGT2346
Brian Glabb
April 20th 2014

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The company I have decided to develop a business plan for is Apple. I believe they still hold a
sizable market share with their IPhone, however there is room for expansion. Apple is a strong
competitor in the cell phone industry however I strongly believe they can capture a higher
percent of the market with a stronger business model. During the course of this paper I will
discuss the main competitors to Apple, how their strategies differ and I will outline a plan which
should allow Apple to continue dominating the market.
Blackberry - The first blackberry was introduced in 1999 and it was a simple two way pager
equipped with a keyboard for sending messages. 2003 marked blackberrys first smart phone.
This style of phone outfitted itself with standard phone functionality as well as, email and web
browsing. One feature carried through the majority of RIMs smartphone is the QWERTY
keyboard. This keyboard is unique to blackberrys design and separates them from the
competition. Throughout the different iterations of the blackberry, features such as enhanced
screen resolution and coloured displays have been implemented along with constant software
updates(2). Blackberrys current phone, the z10, has been underselling in both the Canadian and
US markets and RIM declared losses in their first quarter. This has caused the company to cut
back the price of their new phone from $200.00 to $50.00 on some network providers. As well,
the new blackberry operating system has not been well received and is under constant scrutiny
by many critics (1). Overall, blackberry started strong with their original smartphone however
due to a lack of adherence with consumer demand, blackberry has found themselves on the
losing end of the phone wars.
Samsung Their first phone, dubbed the clamshell, resembled a brick. It was a small thick
phone which only provided one service telecommunications. As the years went on, popularity
for flip phones increased which lead Samsung to develop their own rendition. 2007 marked the
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year that Samsung would release their new slider phone named the Samsung moment. As the
years progressed, Samsung became more aware if the potential consumer gain from phone
products and in 2010 launched their first candy bar touch screen phone (5). These phones
include the Samsung galaxy lineup as well as the Nexus. Samasungs phones stand apart from
both Apple and Blackberry because they utilize the android operating system which enables a
much more user friendly experience. Android is allows for a much more personal touch when
setting up a consumers phone experience (6). Currently, the Samsung Galaxy s5 has strong
sales and is leading the way in an inexpensive alternative in the smartphone market. The list
price for the Galaxy is set at 200.00 for the base model. The ability to purchase exactly the kind
of phone you want with a plethora of different options to fit any desire a consumer has, makes
Samsung effectively the strongest competition against the IPhone (10).
The iPhone began as a simple idea proposed by Steve Jobs. He believed that phones and tablets
were the way of the future and in 2005, apple in conjunction with Motorola released the very
first phone to run Apple software. Due to lack of confidence in Motorola, Apple discontinued its
partnership and began developing its own new mobile phone. On January 9th 2007, Jobs
revealed Apples phone aptly dubbed the IPhone. This phone would support third party apps and
run Apples safari web browser. The IPhone was revolutionary when it was first announced and
Apple continues to innovate their phones with new apps and features (11). Currently Apple is on
its seventh iteration of IPhone and is continuously improving all designs, features and software.
The IPhone is the top rated seller, even overtaking Googles Nexus line. This past September,
Apple released the IPhone 5s which continued to have strong sales through the first quarter. The
uniqueness of Apples phone comes from the connectivity to their cloud system as well as the
easily operated operating system. The reputation Steve Jobs left with Apple will be everlasting

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however Apple must continue to innovate their products in order to stay relevant in todays
market (12). Apple releases a new product every year however the technological advancements
are still far behind current generation phones. This must be improved if Apple is to maintain the
foothold they have in this industry.
SWOT ANALYSIS
Company
Blackberry

Strengths
Connectivity
Push notification
system
Battery life
QWERTY keyboard
USB adapter

Weaknesses
Low quality apps
No touch screen
QWERTY keyboard

Opportunities
Expand the
applications
library and
innovate
something new

Apple

Cloud Connectivity
Simple, easy to
use interface
ITunes enabled
Safari Browser
Quality materials

Small LED screens

Poor battery life
Lightning charger
Restrictive
operating system

Continuing
revolutionizing
their product with
new features

Samsung

Open access
operating system
Large LED screen
Good price point
USB adapter

Flimsy material
Confusing
interface
Service providers
provide
consumers with
OS updates

Allow consumers
more control over
their phone
provide an even
easier way to
access OS
software.

Threats
The ever
increasing demand
for a more
extensive smart
phone with big
screens and third
party applications
Stagnating and not
introducing any
new concepts
which
revolutionize the
industry
separating
themselves from
the competition
Continuously
downgrading
materials and
applications
pandering to the
lowest common
denominator.

Some of the advantages Apple has over its competitors is its easily accessible interface. This
allows for a much wider demographic as you dont have to be a techie to understand how to use
an IPhone. The idea of cloud connectivity between multiple devices helps Apple establish a
wide network between individual consumers. If a customer has multiple apple products, they
can share and sync a myriad of photos, software and apps between all devices (13). There
integration of their already popular software, coming stock on any IPhone, means consumers
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understand exactly what theyre buying. This means more confidence while purchasing a
product from Apple. Apple has a great reputation in terms of consumer confidence, you are
buying the best made phone on the market if you pick an IPhone. The continued use of
exemplary parts will only strengthen Apples hold in the current market. Since Apple has a
foothold in the current market, taking small risks to expand their demographic, and minimize the
amount of consumers defaulting to a competitor, will provide Apple the opportunity to grow in
this competitive industry (12). Enhancing the cloud software, improving the functionality with
their App store and of course, consistent updates to current applications widely used.
Blackberrys main problem comes with their small demographic. Currently, only moms,
government officials and business owners use Blackberry. The phones major problem comes
from the lack of successful third party apps and their small library of first party apps (5).
Blackberry is continuously holding themselves back due to their physical QWERTY, although a
powerful tool, not realistic when approaching a new potential clients (3). Blackberrys image is
currently tarnished in the view of the public, due to the sizable amounts of layoffs inside their
corporation (1). They are less likely to take any risks and will operate on an idea already
implemented with substantial research. Blackberry is less of a threat to Apple, as they are
already operating at a loss (4). Blackberry appears to be listening to theories and ideas internally
as opposed to what their customers actually want in a device this is why they are failing.
Samsung uses cheap parts while constructing their phones and their battery life is sub-par.
Although they use a more tech friendly operating platform, its much more prone to crashes
and errors. Their library of applications is extensive however riddled with advertisements (8).
The overall vibe behind Samsungs line of phones is cheap and techie oriented. A number of
service providers which support Samsungs lineup of phones, do not update on a regular basis
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which means users are often wondering if they will receive a new OS update. This is in stark
contrast with Apples MO as they update all devices at once. On the topic of updates, Galaxy
phones are notorious for deleting applications as well as other information stored on the
handheld without notice. Depending on the amount of bloat ware installed on Samsung
phones can directly impact the overall speed and performance of the machine. If more add-ons
are applied before consumers purchase the product, it could deter from overall clock speed. As
of right now, there is no way to remove unwanted programs from Samsung phones on start-up
(9). These unwanted applications can cause the consumer to feel overwhelmed and can even
cause decreased battery operation. Apple must maintain the reputation of quality and
continuously updates software and hardware, they will continue to make strides against their
main competitor Samsung.
Apple uses a plethora of different advertising techniques, whether its on television, radio or on
the internet. They most popular way to advertise any new phone is via the web however,
Apples demographic also includes an older audience which means they also use television and
print ads regularly. Apple conveys the message of professionalism and quality through white
back grounds and clean designs during promotional materials (14). They maintain the illusion of
exclusivity while pandering to their demographic basically if you own an IPhone youre
popular. They have a twitter account addressing any concerns related to Apple as well as
notifying customers about any new products or downloads. Print ads in magazines follow the
same format white, sleek designs synonymous with quality (14). IPhone also uses product
placements in film and television. You will likely see an Apple product being used on popular
television shows by main characters with their trademark jingle being used multiple times.
Applications can be offered as free downloads however with the inclusion of advertisements.

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This will increase download rates while offering a minimal audience for specific ads geared
towards similar Apple products.
Blackberry uses print ads in business magazines as well as online retail stores. Blackberrys
marketing campaign differs from Apples as they are targeting a different demographic. They
still use social media such as; Facebook and Twitter to address any customer concerns and
promote new software and hardware (3). Online television shows will display blackberrys
phone, with the most notable being House of cards on Netflix. Similar to Apple and Samsung,
Blackberry uses viral videos to help sell their products and often conveys their brand as
professional, new and sleek. Blackberry tries to stay away from the ongoing war between Apple
and Samsung while offering a compromise to the two phones. They are not as active on the
social media avenue as either Apple or Samsung however they make their presence known on
video hosting websites such as YouTube and Livestream (3).
Samsung offers a myriad of different advertisements usually attacking their main competition,
Apple. The too offer print ads, online ads and host a number of different online social feeds.
Their main use of social media comes from websites such as: Tumblr, Facebook, Twitter and
Reddit. They are known for their numerous viral internet videos through online hosting sites like
YouTube. Samsung is known for their use of viral videos, targeting the online communities on
such sites like Reddit (7). Currently, they are more popular online and this greatly impacts
Apples sales. Since their main demographic consists of tech users, Samsung has a lot of
opportunities to develop an online presence with a virtual following. The concept of
participatory culture through online forums enables Samsung to continue building a large
consumer base without the actually need for paid advertising. Their strength comes for
recognizing the ever changing impact the internet has on their profits and they cater to it (7). Fan
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boys of Samsung will actively go out of their way and attack the dwindling Apple community
through online forums and discussion boards.
The business model I have develop for Apple expands on their already existing customer base
while taking into consideration market forces as well as their aging demographic. IPhones are
typically expensive, even if Apple offers them at a reduced rate (IPhone 5c) the price point can
sometimes be a deterrent for new customers (14). Apple needs to continue their line of
inexpensive phones however marketing it at a reasonable price while separating it from their
main line while maintaining the concept of uniqueness and quality. Markets continue to
fluctuate and with the new law ending 3 year contracts, lowering the price of the IPhone may
make it a viable option for new customers.
Apples main focus is on hardware and software and each are interconnected. ITunes makes it
easy to download music, movies and books while linking it to one account. Their IPhone is
basically a smaller version of their IPad and thats why their phone is so attractive to many users.
If you own an Apple product, you know exactly what youre getting a great product. The main
problem the IPhone faces are its current restrictions as well as not improving hardware
exponentially. Apple has released a myriad of new phones however the technological
advancement in each device doesnt compare to new tech on the market (14). The screen size as
well as the internal hardware cannot compare to their current competition, Samsung. The IPhone
5s introduce some small new features but nothing revolutionary. If Apple is to maintain their
foothold in this market, they need to begin innovating instead of duplicating previous successes.
Apple should focus on unrestricting access to their OS and allow user to unlock their devices.
This would bring back a small majority of users from android which could lead to a more
positive online experience.
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Maintain a positive virtual presence is another area Apple can improve upon they need a
stronger foothold online to improve the attitudes of online consumers. Bring focus back to
Apples core values and users will support Apple. Applications are great on the IPhone however
Apple needs to be ever-expanding, making sure they are ahead if the competition with the hottest
apps. Apple needs to reach new consumers with their already established products.
One demographic yet explored by Apple includes the baby boomer generation. IPhones
generally are very simple to use and the price point is perfect for an older generation. In order to
capitalize on this market, apple will need to make a higher resolution screen and improve the
hardware inside. This would be a great line for Apple while keeping the inexpensive and
techie lines, they can add a new line dedicated to this older market. Advertising also needs to
be geared toward this broadened demographic and expanded on virtual and physical mediums.
This means the increase in print ads, radio and television commercials and online
advertisements. Designing the interface in conjunction with the overall sleekness of the IPhone
will help continue to build the concept of quality over the competition.
Apple has a great reputation for security and is actively against fraud, of all types (15). The
easily identifiable log gives consumers confidence while shopping at an approved Apple retailer.
Apple uses high tech security measures to ensure that users information is always protected
however, with new threats emerging every day, its important for Apple to continue working
diligently on security procedures. The new IPhone will be made by only quality approved
factories and Apple will take an even stronger stance against counterfeit phones. Constant
benchmarking on new hardware will ease consumer minds as it makes certain all specs are
authentic and secure.

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Apple will need to maintain a strong communication link between consumers, if they are to
implement a pull model supply chain (16). With constant updates from consumer, Apple can
verify any issues with pieces coming through different factories and address them accordingly.
This model better serves Apple than the traditional Pull model which ignores customer
feedback. Competition in this industry is fierce and its always important to focus on consumer
demand. IPhone components are assembled all over the world and account for over seven
hundred thousand jobs and Apple pays a vital role in both Canada and the U.S. (17) This will
mean continued support of their existing supply chain as well as more jobs to accommodate their
new line of phone.
Samsung holds a strong presence online and in order for Apple to regain lost ground, social
media presence must be dramatically increased (7). An overall message needs to be conveyed to
consumers Apple believes in quality products while innovating the devices with every
iteration. Social media websites like Twitter, Reddit, Tumblr and Facebook are perfect avenues
to address growing concerns with their consumers and instill a sense of comradery between
online users (14). This is free advertising and will go a long way in bolstering sales and fans will
advocate on the side of products.
If Apple decides to follow this business model, their sales should increase by forming a solid
virtual relationship with current consumers and establishing confidence in new consumers both
old and young. Managing their supply chain, effectively integrating the new line of devices
geared towards an older demographic, will continue Apple processes running smoothly and
efficiently.
We will measure Apples new market control by reviewing techniques discussed above and their
effectiveness. Viewing the sales figures for the new line of IPhones will help us gauge if our
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theory of innovating and expanding was successful. We can conduct focus groups and think
tanks withholder consumers which will provide valuable feedback into our line of phones
designed for them. We can monitor online social media websites, reviewing how Apple is
perceived to the online community. We can create new videos explaining our innovating new
technological advancements as well as television commercials for a shorter exciting experience.
We can monitor views on both the webs advertisements as well as the television commercials.
These numbers will help us understand the consumer feedback and allow us the opportunity to
expand if necessary. While maintaining our pull supply chain, we can gather information from
consumers and what they like and what they dont like. Hopefully we will garner positive
attention with an increased amount of jobs which will strengthen the attitudes of our consumers.

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