Management assignment
Name
Institution of Affiliation
Task one
Activity one
Apple Company Inc. analysis
Apple Company Inc., which is one of the firms that is known for its innovativeness has various strengths and weaknesses surrounding it. One of the notable strengths of this firm is that it has a strong brand image. Apple company boasts to have the strongest brand in the industry in which it falls. Given this case, it becomes so easy for this firm to introduce a new offering that it may think of. Apart from that, the virtue that Apple has a strong brand image has a positive impact on its profitability.
Besides that, the other strength that Apple company inclusive has is that of high-profit margins. Since its inception, this giant has been making profits all along. There is no reported incident of the firm making losses. As a result, Apple company inclusive is regarded as a going concern, which is not intending to close down its operations any soon. Profit-making is one of the main goals of any firm in the market.
Last but not least, the other strength that can be attributed to Apple Company is that it has an effective rapid innovation process. As mentioned earlier, this firm is known to be the most innovative in the industry in which it falls. This claim can be supported or rather substantiated by the fact that the entity uses most of its resources on research and innovation, and this is what has enabled it to attain such a competitive edge. On the other hand, the main weakness that this firm is reported to have is that of charging high prices. The firm, when compared to its competitors, is known to highly charge its offerings. This pushes most of the potential clients away from it (Cant, 2006).
When it comes to the analysis of the context of this firm, Apple Company is known to operate in line with the changes in the environment. For instance, this entity is working in tandem with the increased digitization, which is the current trend. On the other hand, when it comes to customers, Apple has clients who can pay premium prices. Last but not least, some of the close competitors to this firm include Samsung and LG. Lastly, there is no notable collaborator for this firm apart from the hardware companies.
Activity two
Market segmentation is important as it helps the firm in adequately meeting the specific needs of the various segments in the market. Therefore, this process is important as it enables the firm to outline the needs to be met. The impact of market segmentation on a firm is that it may help in increasing its customer base, and this is based on the premise that the higher the number of segments the higher the number of clients. Therefore, for a company to be successful, it has to segment.
Nevertheless, various products can suit respective segments. For instance, when it comes to demographic segmentation, some cloth items are meant for ladies and others for men. On the other hand, when it comes to psychological segmentation, this takes the form of pricing where a phone can be priced at $699 or $700 depending on the target segment. For behavioral segmentation, the latter stated example of the phone can still be applied.
Task two
Activity one
There are four main stages in a product lifecycle and these are development, growth, maturity, and decline. All these stages employ different pricing strategies. For instance, when it comes to the first stage which is development, this is known to be the initial stage of a product. During this stage, the sales of the commodity in subject is expected to be low, and this is based on the fact that the consumers are not so familiar with the offering. Since people are not such much familiar with the product, firms are tempted to price their commodities either lowly or highly. However, most firms choose to engage in penetration pricing where they charge low prices for them to be said to be competitive in the market. The aim of taking such a move is to increase customer attention.
Growth is the second stage in the product lifecycle. In this stage, there are remarkable sales and the product is in high demand. The business is really booming at this stage, though it has not reached its peak. In the growth stage, the firm has higher bargaining power to the extent that it may choose to increase its prices since people are now well familiar with its offerings. However, the problem with this phase is that it may put the firm at an increased competition in that the close competitors of the firm, for them to be relevant, may decide to duplicate the offerings of the firm. Therefore, to remain relevant in the market, the pricing strategy that is adopted, in this case, is lowering the prices with the aim of offsetting competition.
Maturity is the other stage in the product life cycle. In this stage, most of the clients of the firm will have the offerings of the firm with them. As a result, this will lead to a decline in demand. The sales volume may not experience any increment as is the case for the growth stage. However, some businesses are usually tempted to add to their offerings during this stage. Most competition is experienced during this maturity stage. In this stage, the pricing strategy that is used is the competitive pricing strategy, and this may be in terms of lowering the prices of the firm’s offerings.
The decline is the last stage in the product lifecycle. In this phase, there is less demand for the firm’s commodities (Kotler, Keller, Brady, Goodman, & Hansen, 2019). This may put the firm at a crossroads on whether to continue producing or whether to stop producing completely. The main pricing strategy that is used, in this case, is that the business may choose to lower its prices. This is to ensure that it remains relevant.
Task three
An analysis of the merger agreement between M.A Silva, which is a manufacturer of premium natural corks and VGR which is a leading manufacturer of glass bottles along with packaging for wine indicates that there will be an increase in the profit margin. Apart from that, there will be a reduction in the cost of production because everything will now be done under one roof, with no other additional charges such as transportation costs.
The reason for the increase in profit margin can be based on the fact that there will be increase efficiency in production. When both firms combine, they will be able to complement each other. When one entity produces the corks, the other one will be working parallel to produce bottles. As a result, this will lead to increased efficiency, which can be translated to increased profit margins.
Apart from that, the fact that there will be a reduction in costs can also be elaborated further. For instance, the merging firms may decide to utilize a few number of employees. In such a case, both may decide to downsize. This will help in cutting the cost of salaries. Apart from that, the firm will also save on other costs such as the cost of insuring its employees.
To this end, it can, therefore, be stated that the merger agreement between the two complementing firms will help in both increasing the profitability and this can be attributed to the increased efficiency. Apart from that, it is also worth noting that the joining efforts of the two firms will help in cutting on costs. For instance, there will be a reduction in the costs of transportations. In addition, there will also be a decline in the costs of advertising. Therefore, it is recommended that the two entities should merge as the benefits outweigh the cost.
References
Cant, M. C. (2006). Marketing management. Cape Town, South Africa: Juta.
Kotler, P., Keller, K. L., Brady, M., Goodman, M., & Hansen, T. (2019).
Marketing management. Harlow: Pearson Education Limited.