Analysis of the Three Reasons for the Success of Apple

张溪岩 张映祯 邓霖

Abstract：Apple did much better in the process of controlling costs， promoting revenue and maintaining customer loyalty.

Key words：Apple； business success； cost reduction； revenue； customer loyalty

中圖分类号：H315.9 文献标识码：A 文章编号：1672-1578（2016）05-0003-01

1 Introduction

Looking at Apples interim financial statements for the three months ending June 27th 2015， this technical giant reported a bumper set of quarterly revenue once again， which is up to $50 billion. In fact， Apple has made such outstanding financial performance for years， and many people are curious about how this company could achieve this.

From my point of view，Apple could gain such handsome profit because it did much better in the process of controlling costs， promoting revenue and maintaining customer loyalty. Apple achieved each of them respectively through smartly designed product range， clever marketing strategies， and user experience maximization.

The following parts of this article will demonstrate the strategies and operation in the three processes of this high-tech tycoon.

2 Product Range Help Cost Reduction

Elaborately designed product range creates firm

foundation and great convenience for Apples internal control of cost reduction. As it known to all， Apple has an extremely precise product range， only providing one or two products for each category. This kind of product structure comprehensively saves costs for Apple， because the types of components designed and manufactured can be reduced at the same time， which means Apple is able to to cut down material purchasing costs because Apple can gain greater bargaining power and more trade discount.

Moreover， Apple regularly updated its product range， usually on annual basis， and will soon give up the former version after cleaning up its global inventory， which also decline cost drivers.

3 Clever Marketing Strategies Boom Revenue

Apples cash outflows are diminished by controlling costs， while cash inflows are promoted by its clever marketing strategies. Three detailed marketing strategies are established based on the structure of Apples product line. All the products operate under IOS system， and share applications sold on App Store， allowing Apple to carry out Cross-selling and Association-selling. Apple also regularly updates the operating system and bans using the latest system on the products of old version， which allows Apple to use Up-selling because customers have the natural tendency to buy the lately released products for the access of the new system.

Fully utilizing passion of the Apple fans， Apple carries out hunger marketing every year it releases new products in order to set up an illusion that the stock will run out soon， resulting in fans rushing to purchase one regardless of the higher price.

4 Maximized User Experience Maintains Customer Loyalty

It is not exaggerating to describe “user experience” as the only corporate objective of Apple， and provides the foundation as well as direction for the establishment of Apples business strategies.. The so called maximization is not just an ideal reverie like a useless empty talk， but really refers to endlessly create and improve customers satisfaction.

Satisfaction leads to reliance， and Apple continues to update such reliance into loyalty and even obsession by endowing its products with uniqueness. Apple never designs omnipotent products， but manages to maximize the main feature of the specific category of product， to obtain the leading position in that category， and make consumers firmly believe that product is the coolest.

Improvement of user experience has never stopped， as we can see greater and greater research and development costs （R&D） in Apple Balance Sheet. It said that Jobs had once invested millions of dollars to thin IPhone 5 by just one millimeter， so as to make the cellphone more comfortable to hold in one hand. It is such spirit that cultivates ever firmer customer loyalty.

5 Conclusion

Apple has just done what all other enterprises attempted to do， however， it has done much better than others on both strategic and operational levels， which makes sure its leading status in the whole industry. The more important is that Apple has never stopped moving forward， and it is obvious that it will continue to improve itself in the foreseeable future.

People indeed saw its declining creativity： IPhone was just improved in terms of its hardware； Apple watch was far from innovative； IPod has not even been updated for years. However， the handsome profit is still the proof of its popularity， indicating the great competence of this high-tech empire. It is hard to say how long Apple is able to maintain its glory， but its prominence over these years will always be a legend.