Apple
Readers of this blog know that I’m not a huge fan of Apple, but that’s neither here nor there. No matter what you read in the press or business press about Apple and innovation, marketing, or product development, the fundamental business strategy at Apple is a financial one. Apple’s fundamental strategy is to squeeze as much profit as humanly possible from every sale it makes.
Apple’s financial strategy, then, is to maximize its margins, a financial strategy it has pursued single-mindedly since Steve Jobs returned to the company.
This foundational financial strategy informs every other aspect of its business model.
Product development — to maximize margins, Apple has to offer products that consumers can buy nowhere else. This involves one part cutting-edge design, one-part unique, hard-to-emulate features, and several parts marketing.
Always be launching – A standard truth about marketing is that early adopters are willing to pay the highest prices – and highest margins. The Apple launch strategy involves super-hyping products in order to build the largest army of early adopters possible. All those nice people who stood in line for an iPad on the day of its launch were willing to pay a pretty penny to get their hands on the device. The second part of the strategy is to continually relaunch products. The Apple financial strategy – maximize margins as much as possible – is wedded to a marketing strategy of maximizing early adoption.
Why is Apple so secretive to the point of insanity? Because you can’t maximize early adopters if your product is old before it’s launched.
Keep the cash coming – All the press you read about Apple’s product strategy frequently misses the most important point – Apple doesn’t just want to sell you an iPod or iPhone or iPad and bank the shekels; rather, the company wants you to keep buying stuff through their devices and services.