Apple with its
disruptive innovations like iPod, iTunes, iPhone, iPad, iCloud have not only
fascinated the customers but also made these devices an integral and essential
part of their lives. Customers feel Apple products as completely new despite
the fact that smartphones, MP3 players, online music stores existed even before
Apple developed them and also customers feel Apple products and services
resolve problems and make their lives better. Apple markets its products based on
functionality and usability not on the technical specifications of products as
compared to its competitors the technical specifications are weak. For example
iPad processor compared to competitors’ tablets is comparatively slower but
Apple focused on the thinness and light weight of product to cover the
weakness. Apple has also been successful to take advantage of its ecosystem and
offer products that seamlessly worked and made the customer’s life easier.
Apple initially began as Personal Computer manufacturer like Macintosh
computers but now its product portfolio is dominated by iPhones, iPads and iPods.
It is also argued that Apple is
more a design-driven company rather than a technology-driven company and it
created products that are far beyond customer’s expectations and thinking.
Basically Apple creates a product that customers do not expect, build a need
for the product among customers and quickly scale up the market and in between
make life difficult for their competitors as competitors struggle to keep up
with Apple’s products thereby losing market share to Apple.
In an interview published in Forbes, Dan Schawbel interviewed W. Chan Kim,
the BCG Chair Professor of Strategy and International Management at INSEAD, Co-Director
of the INSEAD Blue Ocean Strategy Institute and co-author of Blue Ocean
Strategy Book, said “Our study shows that blue ocean strategy is particularly
needed when supply exceeds demand in a market. This situation is applying to
more and more industries today and will be even more prevalent in the future. Let
me illustrate this using the example of Apple. The company was once a PC maker
in a mature and unattractive industry. By making a series of blue ocean
strategic moves such as iPod, iTune, iPhone, and iPad, Apple not only achieved
sustained profitable growth, but also revitalized the declining consumer
electronics industry. Apple achieved its success not by investing in what was
hot in the marketplace, but by making strategic moves to lead and shape the
evolution of a declining industry. From the perspective of blue ocean strategy,
companies seeking profitable growth should not focus their efforts on
identifying an existing lucrative market, but should set out to create and
capture one.” Apple has consistently redefined the industry boundaries, created
uncontested market space and its products and services always focused on
delighting customers and making them essential part of their lives. Apple
products eliminates the problems, raises the functionalities and expectations
of customers, reduces the problems of usage and creates a need for the customer
and make them use their products for long time. Apple profitability and revenue
growth can be directly attributed to Blue Ocean Strategy and company constantly
needs to find Blue Oceans in Red Oceans so that it continues its profitability
growth. Without its charismatic founder Steve Jobs, company has to continue its
journey of creating new products and services and fascinate customers.
