I’ve just purchased a new phone – iPhone. It looks and feels great, the design and functions are incredible. Whatever you might be looking for you’ll find it here. Apple is known for its unique design and ability to fulfill customers’ desires. No one would argue that Apple has one of the top brand names in the world.
But now let’s look at the different side of the story. Being successful today is not enough. Once you are on the top you have to stay there somehow. You always have to look in the future, trying to figure out potential threats that the company can face, and Apple is not an exception. Let’s look at scenarios that are very likely to happen unless the company is going to take some measures to prevent them.
Although Apple is known for its high quality products, it has difficulties on some of its products' quality control. There were several problems with faulty screens of iPod Nano and faulty batteries on iPods. They just came up with iPhone, which I really enjoy, and I hope that either the screen or the battery will be good, otherwise I’ m not buying any Apple products in the future. I think Apple is concentrating more on internal engineering than on the market. It is always good to impress customers with new products, but at the same time you have to make sure that the quality is high. The computer industry is very competitive, there are so many new and innovative products being created every day. To stay on the top, Apple must continue to invest a lot of funds in R&D as well as in quality control.
Another thing that I’ve noticed about the company that it hasn’t issued any dividends to its stockholders since 1995. In the future, it may cause the investors to lose trust and confidence in Apple. The company has increasing earnings and, therefore, the ability to pay off dividends. The company should improve stockholder loyalty by start paying dividends and put themselves in a better competitive advantage in the future.
One more scenario that is very likely to happen is that Apple can have decreasing sales due to high prices of its products. The economy looks unstable and paying at least $1,300 for iBook (laptop), and somewhat ranging from $150 to $ 400 for iPod (mp3 player) could become problematic. High prices will discourage customers from buying Apple products. The company must review its pricing strategy and decrease the prices to the point where profits are still increasing. Also, it might decrease its costs to produce the products as long as the quality is not sacrificed.
Tuesday, November 27, 2007
Wednesday, November 7, 2007
Max Factor - First in Everything!
As I was doing research on the cosmetics industry, I made a notice that the biggest threat to any company that participates in it is intense competition. One of effective ways to succeed is to differentiate your company in some way. That could be:1. to see the potential in an idea and enter the market first before your competitors, 2. to have a product feature that gives a company niche dominance, 3. to receive dominance in market share and distribution channels, 4. to have a monopoly status or receive favorable government protection and treatment which allow you to differentiate.
The company that I want to look at is well-known by many - Max Factor. There are several reasons for that. But aside for a wide product line and fine quality that it provides, Max Factor was a first name that you hear when new product comes up on the market. A lot of products that we've heard for the first time were associated with Max Factor. Here are some facts: 1. first coining the term "makeup"; 2. first professional makeup for motion pictures in 1914; 3. first false eyelashes; 4. first products like: lip gloss, modern foundation as we know it today, eyebrow pencil, concealer; 5. first to come up with water-resistant makeup.
It sounds like a lot of products, that are in our everyday use today, were created by Max Factor. But to create a product is not enough. Once you establish yourself as the first in the market, you have to be able to stay there. Max Factor found the secret to that as well. The product line is huge, products are of a fine quality and affordable at the same time. The most important thing for Max Factor is constant innovation and creativity. They created the new patent-pending iFX mascara brush and new Lash Perfection Mascara, which provides precise coating and defining lashes from root to tip, including hard-to-cover areas in inner and outer corners of eyes. This product line has several options that can suit everyone, including mascaras that provide volume, length, lift, waterproof feature, stretch and separate features, and the one that doesn't have any color in it. The product seems to be very popular with customers and could be found in a great variety in stores, which is a great way to get your product to customers.
The company that I want to look at is well-known by many - Max Factor. There are several reasons for that. But aside for a wide product line and fine quality that it provides, Max Factor was a first name that you hear when new product comes up on the market. A lot of products that we've heard for the first time were associated with Max Factor. Here are some facts: 1. first coining the term "makeup"; 2. first professional makeup for motion pictures in 1914; 3. first false eyelashes; 4. first products like: lip gloss, modern foundation as we know it today, eyebrow pencil, concealer; 5. first to come up with water-resistant makeup.
It sounds like a lot of products, that are in our everyday use today, were created by Max Factor. But to create a product is not enough. Once you establish yourself as the first in the market, you have to be able to stay there. Max Factor found the secret to that as well. The product line is huge, products are of a fine quality and affordable at the same time. The most important thing for Max Factor is constant innovation and creativity. They created the new patent-pending iFX mascara brush and new Lash Perfection Mascara, which provides precise coating and defining lashes from root to tip, including hard-to-cover areas in inner and outer corners of eyes. This product line has several options that can suit everyone, including mascaras that provide volume, length, lift, waterproof feature, stretch and separate features, and the one that doesn't have any color in it. The product seems to be very popular with customers and could be found in a great variety in stores, which is a great way to get your product to customers.
What Business Strategy do you employ?
I want to take a look at three mass market retailers/department stores and see how they sustain their share on the market either by focusing on the costs of running a business, being unique somehow, or concentrating on a particular customer group or a product line, etc.
First, I want to take a look at a mass market retailer, such as Wal-Mart. First, it is a powerful retail brand. It has a good reputation for value for money, convenience and a wide range of products in one store. It offers general merchandise, including apparel, domestics, fabrics and notions, stationery and books, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture and accessories, sporting goods, toys, pet food and pet accessories, cellular phones, and cellular service plan contracts. Its stores also offer grocery merchandise, and financial services and products. Plus, it is constantly growing worldwide. It has its retail location in several countries and is expanding. The example can be a purchase of a UK based retailer ASDA. The company reaches its competitiveness through use of effective IT to support its international logistics systems. One click away is to see how individual products are performing country-wide store by store. IT also supports the company effiecient procurement.
The other mass market retailer that I want to mention is Walgreens. Walgreens find its weekness as intense competition primarily from Wal-Mart. Wal-Mart delivers more drug prescriptions and it makes much more money per a square foot of the store ($ 26/sq.ft for Walgreens vs. $ 46 for Wal-mart). Walgreens believes that on average a customer lives about 2 miles from the store. To overcome the problems, Walgreens will follow this strategy:
- enter more markets: Walgreens currently is increasing its net stores by 1 per day; also investing in prime store locations
-partnered with TakeCare and InterFit to operate small cliniques in Walgreens stores
- "dense up" existing markets: freestanding stores and drive-though pharmacies, touch tone prescription refills.
- organic store growth: relocate or remodel
- invest heavily in high-tech stores and distribution systems which drive service up and costs down
- offer healthcare beyond the traditional pharmacy: online drug store website
The third store that I want to cover is Rite Aid. The company knows that every year, more baby boomers move into their high prescription usage years. Drug companies continue to spend billions on research and development to create new drug therapies for diseases we know and illnesses we haven't heard of yet. New drugs have started to move through the FDA approval process faster. And over the next five years, three times as many branded drugs will come off patent as in the last five years, which will make prescriptions more affordable and be a boon for higher margin generics. Growing prescription count is number one focus for Rite Aid because pharmacy represents 63 percent of its business and has the most potential for natural growth. Initiatives include increasing recruitment of pharmacists in hard to staff areas, a new program for reacquisition of former customers, a focus on seniors and improvements to Rite Aid managed care and clinical services product lines. The company has doubled its capital budget for acquiring prescription sales, since they provide a quick return on investment. Rite Aid believes new and improved technology will also deliver results as it continues to roll out its next generation pharmacy system, expand e-prescribing so more doctors can send prescriptions electronically and market its enhanced automated refill system. These will make it even easier for both patients and doctors to use Rite Aid.
First, I want to take a look at a mass market retailer, such as Wal-Mart. First, it is a powerful retail brand. It has a good reputation for value for money, convenience and a wide range of products in one store. It offers general merchandise, including apparel, domestics, fabrics and notions, stationery and books, shoes, housewares, hardware, electronics, home furnishings, small appliances, automotive accessories, horticulture and accessories, sporting goods, toys, pet food and pet accessories, cellular phones, and cellular service plan contracts. Its stores also offer grocery merchandise, and financial services and products. Plus, it is constantly growing worldwide. It has its retail location in several countries and is expanding. The example can be a purchase of a UK based retailer ASDA. The company reaches its competitiveness through use of effective IT to support its international logistics systems. One click away is to see how individual products are performing country-wide store by store. IT also supports the company effiecient procurement.
The other mass market retailer that I want to mention is Walgreens. Walgreens find its weekness as intense competition primarily from Wal-Mart. Wal-Mart delivers more drug prescriptions and it makes much more money per a square foot of the store ($ 26/sq.ft for Walgreens vs. $ 46 for Wal-mart). Walgreens believes that on average a customer lives about 2 miles from the store. To overcome the problems, Walgreens will follow this strategy:
- enter more markets: Walgreens currently is increasing its net stores by 1 per day; also investing in prime store locations
-partnered with TakeCare and InterFit to operate small cliniques in Walgreens stores
- "dense up" existing markets: freestanding stores and drive-though pharmacies, touch tone prescription refills.
- organic store growth: relocate or remodel
- invest heavily in high-tech stores and distribution systems which drive service up and costs down
- offer healthcare beyond the traditional pharmacy: online drug store website
The third store that I want to cover is Rite Aid. The company knows that every year, more baby boomers move into their high prescription usage years. Drug companies continue to spend billions on research and development to create new drug therapies for diseases we know and illnesses we haven't heard of yet. New drugs have started to move through the FDA approval process faster. And over the next five years, three times as many branded drugs will come off patent as in the last five years, which will make prescriptions more affordable and be a boon for higher margin generics. Growing prescription count is number one focus for Rite Aid because pharmacy represents 63 percent of its business and has the most potential for natural growth. Initiatives include increasing recruitment of pharmacists in hard to staff areas, a new program for reacquisition of former customers, a focus on seniors and improvements to Rite Aid managed care and clinical services product lines. The company has doubled its capital budget for acquiring prescription sales, since they provide a quick return on investment. Rite Aid believes new and improved technology will also deliver results as it continues to roll out its next generation pharmacy system, expand e-prescribing so more doctors can send prescriptions electronically and market its enhanced automated refill system. These will make it even easier for both patients and doctors to use Rite Aid.
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