How Apple Competes…And Wins

How Apple Competes…And Wins

From Disaster to Glory

Did you ever wonder how Apple competes and wins, over and over?
  • In 1997 Apple was in shambles.
  • In 2018 Apple became the first compay to reach $1 trillion in market cap.
  • In 2023 Apple was named the world’s most admired company by Fortune Magazine, for the 16th year in a row.

In The Beginning

In 1997 Michael Dell, riding the coattails of a brilliant distribution strategy and booming laptop sales, stated that if ran Apple he’d shut it down and return the money to the shareholders. This writing unpacks how Apple competes and wins, including market strategy, key management decisions, product strategy, customer loyalty and more.

How Apple competes and wins?

Competitive strategy…

We can learn big lessons in competitive strategy from how Apple took on Sony…and won. Here’s the Apple strategy story.

Sony was #1 and dominated the market

 
Sony logo
  In 1997 Sony owned, by far, the best reputation for consumer electronics innovations. Sony had the product, marketing and engineering talent as shown by a legacy of runaway consumer electronics successes. It was already in the PC market as well as the entertainment and content markets via Sony Entertainment. Sony had second-to-none global distribution and its marketing and advertising were simply brilliant. In 1997 two entirely unrelated events were taking place. The Asian financial crisis was in full bloom and Steve Jobs was returning to lead Apple, via Apple’s NeXT acquisition, following a 12-year absence from the company he had co-founded and was now floundering. Jobs knew the strategic implications of the downward spiraling Japanese economy and how they would affect the darling of the branded consumer products world: Sony.

Flinging the doors open

A critical key to how Apple competes and wins is continuous innovation. Steve Jobs flung wide open Apple’s doors to innovative strategic thinking and brilliant execution. He rewarded it with programs like Apple Fellows. In addition Jobs did what few CEOs are able to do…nurture innovation toward a clear stretch goal. In Apple’s case the goal was creating and dominating a promising segment of consumer electronics while consigning the rest to hopelessly entrenched competitors like Sony. Since Jobs’ return, Apple has broken through conventional thinking time and again, creating and sustaining eye-popping value for consumers and investors around the globe. It happened with brilliant marketing moves, that any company can copy. These moves transformed Apple into The World’s Most Admired Company.
Apple iPad 2023, pink photo
 

Apple’s market and product strategy

From a strategy standpoint, Apple noticed that Sony could not decouple its innovation engine from its freight train of legacy products. Sony was forced to deliver incremental innovations to continue selling money losing products like TVs, CD players and others just to retain distribution and manufacturing volume.  At that time, big box retailers demanded that consumer electronics manufacturers carry a wide and varied product line for retail differentiation. Plus step-up and add-on sales. The ensuing product line complexity was like a cancer, constantly eating away profits from volume- addicted manufacturers like Sony, Philips, Thompson and others. All of these publicly traded companies were hugely volume dependent (manufacturing overhead) and any loss of significant distribution would cause those business models to collapse. Jack Welch recognized these money-losing handcuffs early on and exited GE from consumer electronics. In addition, as the Japanese economy continued to spiral downward, Sony was becoming more entrenched and bureaucratic, which put it at a competitive disadvantage for addressing any new trends.

The iMac & MacBook strategy: mashing up

 

Recognizing the trends, even when your competitors don’t, is just the first step. With few exceptions it takes serious numbers crunching to understand what the trends imply for revenue and profit growth. After that it takes concentration and carefully executed stratetgy to to succeed.

Jobs’ secret sauce was his ability to think through the implications of trends that anyone could have seen at the time.

Specifically, Apple noticed that no other competitor was addressing the product reliability problems created from mashing up hardware, software and operating systems from separate companies to create a PC or laptop.

With a keen view toward making creativity simpler for innovative users, Apple built a moat around its new iMac by becoming the only PC manufacturer with homegrown hardware, software and operating systems. The iMac was introduced in 1998 and the OS X platform in 2001. Then Apple went to work on profitable product line extensions and profitable satellite businesses that orbited around the iMac.

A key trend that Apple noticed was a growing preference for personalization and that the microchip, data storage and entertainment industries were running parallel with it. The company responded by introducing the i-brand strategy. Apple introduced the iPod and the Apple Store in 2001. iTunes followed in 2003. The Apple Store ushered in a whole new build-to-order manufacturing strategy and other profit improvement platforms. At the center, still, was the iMac.

Media creation is the new black…

After introducing its iMac, Apple noticed a growing trend in consumer do-it-yourself audio and video production. The company introduced iMovie in 1999, followed by Garage Band and iPhoto in 2002. All three were optimized by the iMac.

Apple also noticed that technology trends were mashing up PCs, laptops, and mobile and consumer electronics. The iPhone and Apple TV were introduced in 2007. Apple also noticed the potential for mobile computing and introduced the App Store in 2008 and the iPad in 2010.

Again, everything orbited around the iMac and the mashup product strategy.

Creating customer loyalty: how Apple competes and wins

Early Apple ad, here's to the crazy ones.

At a time when Sony was making missteps in marketing and advertising, Apple began hitting home runs. On top of one product success after another, Apple continuously grew its tribe by:

✔︎ Partnering with archenemy and brand powerhouse Microsoft to introduce Microsoft Office for Macintosh and to allow Microsoft to invest $150 million in non-voting Apple stock.

✔︎ Partnering with global chip brand powerhouse Intel. By 2006 the entire Mac product line had transitioned to Intel microprocessors. Partnering with major peripheral, photography, entertainment and  software companies to make products iMac compatible.

✔︎ Nurturing the Mac tribe’s fanaticism with conferences, Mac User Groups and other ways to bond the ever-growing group of loyalists with each other and the company.

✔︎ Creating clever advertising that continuously positioned Apple as the standalone rebel, appealing to Apple’s target market of early adopters, innovators and mainstream defectors.

Fortune’s List topper for 16 years

Sony should have invented the iMac, the iPod and the juggernaut of innovative products and distribution. It was far better capitalized and had many competitive advantages.

Today, Sony  plays a distant second fiddle to Apple. Apple’s market cap is 25 times that of Sony’s.

Sony is a sad example of a once dominant company that had it all, but was handcuffed by product strategy and too distracted  to pay attention to the trends and what was driving them.

Today, Apple’s market cap is the largest in the world.

This tells us that investors are pouring big money into innovation and momentum. As they always have.

Apple has the formula to keep on hitting the long ball, like Sony once had.

But will it?

Why artificial intelligence in B2B marketing?

Why artificial intelligence in B2B marketing?

Artificial intelligence adoption is the new frontier in marketing

Who will win by using artificial intelligence in marketing?

My clients are all tech and SaaS companies. A few are ready for artificial intelligence in marketing and sales; most are not.

Graphic display of marketing basics such as strategy, advertising and more.

You see, many tech and SaaS companies still find the marketing basics challenging. For reasons of time and resources they have not yet mastered:

  • market positioning
  • company story
  • email marketing
  • content creation
  • social media marketing
  • dynamic websites with chat
  • digital marketing

Today’s AI is good for ideation, but it is limited in creativity it’s fully dependent on what’s been created already.

When an AI engine looks for answers to a question, it’s like a search engine on steroids. It hyper-zooms through lots of digital data and presents the most credible information.

How you query AI is critical to your success!

Today’s web information credibility is still ranked by search engines. Maybe in the future it might be different, but for now SEO is still the standard.

For example, AI queries of the Library of Congress can only yield information that’s already been digitized in some fashion and has tags.

Who will win the AI marketing game?

Lots of tech and SaaS marketers will chase AI as the latest shiny squirrel. The global value of AI marketing is set to climb from $12 billion in 2020 to $108 billion in 2028.But let’s think about this. If you are not using data to analyze conversions today, will you really understand how to use an advanced data solution like artificial intelligence?

Photo of pyramid with text used to illustrate artificial intelligence in marketing.

Before AI, you need to master sales and marketing automation. It’s called full utilization. You will learn more about digital marketing by doing this, than by jumping into AI.

Why start? Why now?

Venture capitalists have already invested $5 billion in 1,400 AI companies.

Consumer brands are adopting AI rapidly. That’s because the numbers pencil out better for B2C than for B2B…for now.

But marketing is all about quality, speed and timing. Shortening gaps in the engagement-conversion-deal process will be the #1 function of AI in business.

However, if you’re in tech and SaaS marketing the time to start is 2023. If you don’t, you will most likely lose ground to competitors who use it. At least some of your competitors will set the pace in this new frontier. They are the ones will be saving time, money and effort by adopting AI.

Where to start with artificial intelligence in marketing

Training in artificial intelligence is like training for a sport. Start where you are today, build muscle and then steadily increase strength and skill levels..

Here’s my suggested list:

  • master the basics (see above)
  • check to see if your automation platform(s) have native AI, or if you can connect with Zapier
  • make a list of your most time consuming tasks (content creation, personalization, analyzing large quantities of data, timing of offers, SEO, A/B testing, or something else)
  • pick one task, and start researching how AI can help you save time and money

Once you’ve proven the value of AI for that particular task, move onto the next one.

And be sure to develop an AI marketing strategy for 2024!

CMO Executive Alignment

CMO Executive Alignment

CMOs…stop clutching your pearls

Man in t-shirt with words 'clutching your pearls'. Used to illustrate article about CMO executive alignment.

What’s going on with CMO executive alignment?

I’m seeing more LinkedIn posts about CMO executive alignment with their CEOs being fraught with peril.

Enough with the hand wringing. Here’s the truth about managing your CEO’s expectations regards marketing.

I’ve been around the C-Suite a long time, much of it as a CMO.

In my opinion, the key to being a CMO longer than 18 months (at the same place) is learning how to manage those expectations.

Conversely, in a society/culture where dissent can be seen as abuse, it’s becoming increasingly difficult to speak up.

Not because of them…but because of us.

Fear has no place in CMO executive alignment

We’ve transferred the fear of speaking up (in general circles) to the one place it’s not needed or wanted…the c-suite.

Trust me on this, CEOs want your recommendations and the good ones want you to actively manage their expectations when it comes to the marketplace.

Let them take care of the vision and growth expectations.

You take care of aligning yourself and your teams with those expectations.

However, it’s not always easy or straightforward.

At loggerheads?

If you’re at loggerheads, there’s absolutely nothing wrong with pounding on your CEO’s desk with your fist.

The sun will still come up tomorrow.

In addition, a good (or great) CEO will appreciate his/her generals and their recommendations. That same CEO will likely ask that you back up your recommendations with numbers and logic, but it’s your job to provide those.

And you can always do hugs and chugs afterward.