Case #1 - Apple

The Web 2.0 era has greatly changed the ways in which companies interact with the internet, consumers, and competitors. Companies like Youtube, Amazon, and Facebook have redefined the way the internet is used. Companies that have found success in the Web 2.0 era share in common the use of a new business paradigm called wikinomics and its principles. These principles include openness, peering, sharing, and acting globally.

One company that preceded the Web 2.0 era but that has found success in these changing times is Apple. In recent years, Apple has seen the need for changes in the way they operate and have adapted the principles that have made Web 2.0 companies successful. Though Apple does not fully follow wikinomics in every way, they have used its principles in aspects of their company which has positively impacted them. The two specific principles Apple has employed are openness and acting globally.

Apple follows the traditional business model and is known as one of the most secretive companies in regards to products and product development. They have created innovative products and release incremental improvements, all of which are  developed by Apple employees. These are all characteristics of a closed, traditional business model, but there are also aspects in which Apple has shied away from this.

With the launch of their Apple iPhone, Apple took an open approach in developing applications for this product. Instead of creating all of their own apps for the iPhone, they opened it up to users to generate and create content. There are some distinct advantages to this. First, Apple was given thousands of applications, all contributed content from outside the company that they didn’t have to pay employees to create. It saved them money and time. Second, Apple didn’t have to research and decide what type of applications users would want. Since the application content is all user generated, the user of the product is fulfilling their own needs. No one knows what the customer wants better than the customer themselves. Third, allowing other companies to create content for their applications has increased the usability of their products. An example of this is their apps for the Amazon Kindle and the Barnes and Noble Nook. These apps allow users to use Apple products, such as the iPad, iPhone, and iTouch, as they would an e-reader, giving these Apple products extra functions.

 

The second principle of wikinomics that Apple utilizes is acting globally. Though based in the United States, Apple has a global presence which has also contributed to their success as a company. They are present in over 30 countries and ship to even more. Unlike a multi-national company, their products are the same the world over. The Mac Book Pro a person would buy in Indonesia is the same Mac Book Pro a person in the United States would buy. This business model works well for Apple because of the type of product they produce. Some companies produce products that need to be changed in different international markets. This multi-national approach can become costly and redundant. Apple’s unified global structure means cheaper production costs and a standardized support system.

Company structure is not the only thing that has changed in this new era, marketing and advertising tactics have shifted  towards being more focused on the individual customer. The digital age has brought with it new ways of connecting with consumers. This, of course, sounds wonderful, but the increase in media means clutter. Actually reaching the consumer through this clutter has become an increasingly difficult problem for many companies. In response to this, new tactics have been created. These marketing tactics include mass customization and one to one marketing.

Mass customization is a tactic Apple was quick to adopt. Many computer manufacturers, including Apple, have integrated the mass production of products and customization by allowing their customers a large array of options when purchasing their computers online. From the size of the hard drive to the type of finish on the screen, customers can build the computer of their dreams with the specifications they specifically choose. This is a positive thing for Apple as it does not actually cost them anymore to allow customers these choices. It also saves Apple from deciding which specifications sell best, only stocking those, and alienating a customer that may have wanted  something as simple as more hard drive space.

            Apple also allows customers the option to engrave many of their items, such as iPads and iPods, for free with purchase. They have been offering this service for years and are one of the only companies to do so. The engraving as a form of mass customization is not very costly, especially compared to the amount of money being spent on Apple’s products, but is something that the customer appreciates.

            One to one marketing is something Apple as a company doesn’t do a lot of. One small aspect in which it can be seen is the use of iTunes Genius. Genius is a program that makes recommendations about songs to purchase based on what songs an individual already has on their iTunes library and the songs that they listen to most. This is a good way to catch the attention of customers who may not know what to look for when searching iTunes. Showing them products the company already knows they will want to purchase means high sales.

            I believe that Apple has done a good job of keeping themselves relevant during a time when many older companies are having a harder time of adjusting. I really think that they have done well of tweaking their traditional business model in a way that hasn’t changed the way they operate too drastically while still embracing the current trends in marketing. One area in which Apple can improve is their one to one marketing. I see a lot of areas in which they could connect with their customers and beat out the clutter of advertising bombarding consumers. One way is keeping in better contact with repeat customers with a genius-like recommendation of other products they might be interested in.  I think that one to one marketing would be especially helpful to them. Most of their customers are diehard Apple users and keeping a better, more personalized relationship would be very beneficial. I would also suggest this approach to Apple because of the way their products are design to work together. Marketing information on a personalized level to customers letting them know what new products work well with or compliment products the customer already owns would be a great way to one to one market successfully. I’d really love to see them embrace this aspect in the future.