Marketing Assignment: Launch Of Self-Driving Travel Bag By Apple
Marketing Assignment Task:
Select an existing company of your choice and introduce a new product or a new service to a new market through your selected company.
The chosen company should be individual to you and agreed with your Lecturer.
To complete the tasks, you should address the following:
Write a brief company overview covering the company’s background, the scope of the business, and its current market context.
Apply relevant entrepreneurship theories / new venture creation models in the chosen new market/sector and discuss how the internal and external factors impact on the planning (e.g. market research, competitor analysis, feasibilities, etc.) and implementation processes of the proposed new product/services.
Critically analyze the financial resources that are required to support the development of the new product/ service for new market entry
Choose a specific model to explain the proposed new business / new product launch and explain how value will be created for potential customers.
Critically evaluate the potential risks for the proposed business idea and how those could be managed.
In the present marketing assignment, the company named “Apple” is selected which is an American international technology with its head office in Cupertino, California, which frames, manufactures and sells electronics, P.C. software and e-services. The Company was founded by Steve Jobs, Steve Wozniak and Ronald Wayne on 1 Apr. 1976. Currently, the total number of outlets around the world is 510. Apple is committed to providing the best computing services with its innovative software and hardware products. The Company offers high performance and high-quality I.T. products. Currently, the Company has expanded its operations in different countries and has become the foremost country with an increased market capital. The following assessment will also analyse Apple’s performance in the global market, its scope of the business and the launch of a self-driving travel bag. The assessment will also implement the process and strategies that are required for the market entry of a new product. It also mentions the customer value proposition to explain and propose the idea of automated luggage and create product value in the international market. Risks are evaluated, and recommendations are proposed for the new product management.
Company’s Background, Scope of Business and its Current Market Context
As mentioned, Apple was initiated by Steve Jobs along with Steve Wozniak and Ronald Wayne as computer developer Company on 1 Apr. 1976. Wozniak first manufactured I Product, a personal computer and it was given the name Apple Computer Inc. The Company's sales grew at an exponential scale and with the increase in sales; Apple introduced the latest versions of computers, software, operating system and other hardware products (Rawlinson, 2017). With Steve Jobs as the C.E.O. of the Company in 2000, Apple rapidly increased to profitability and established retail outlets chain in various countries. The hardware products developed by the Company are iPad, iPhone, Mac PC, iPod, iWatch, AirPods, home pods and Apple Tv. The software products include macOS, iOs, tvOs, iTunes and watches. Apple Inc frames develop and market media and communication devices, music players, watches, personal computers and different services to twenty-five countries. The Company's targets markets on the basis of the market's contribution. Apple aims to bring the high user experience to its consumers by offering innovative software, hardware, peripherals and services.
The Company's business model influences the market with its distinct design and services to provide consumers with ease-of-use and flawless integration. Apple believes in constant funding in research and development, promotion and advertising to increase the sale of products and services. Moreover, the Company persists in extending its business platform through third-party applications. Apple's immense retail outlets are positioned in busy-areas in order to draw consumer's attention. The Company also trades its products to governmental and private enterprises where the market is favourable for Apple because of its productivity, performance capabilities, seamless integration and ease-of-use. The firm also faces a strong competition among its rivals like Samsung, Microsoft and Google. The market competition is extremely commendatory for the innovative development of products that reinforces its market share. The Company competes in an extremely competitive market that has increased purchasing power, and it is more advanced than its competitors in pricing and innovation (Odaymat, 2018).
Relevant Entrepreneurship theories for the Product
New Venture Creation Model for Automated Luggage
Good entrepreneurs look for occupying a position of power and control in the operation of financial networks. They sustain the intermediary position betwixt consumers and producers to generate profits to the worldwide economy. They have control over the trade and flow of markets, along with new products and services (Gilles, 2016). The significance of entrepreneurs elucidates how well the organisations have been controlling the supply chain networks.
Apple's most successful entrepreneurship theories are the structural holes theory, as it interconnects companies and people across the globe to create something innovative for the market. The Company to introduce and regulate new products or services has been successfully done by applying this theory. Apple is virtuoso in tying up with major companies and groups worldwide with a complete set conglomeration of offers to its consumers (Gilles, 2016). The Company has a great insight into conveying the comprehensive package of software and hardware to its consumers with extreme concern to its pattern. The designs of products are attractive and help in creating demand among the users.
The theory of integrative innovation will help develop self-driving travel bags by Apple as it provides an idea about the proficiency of market to embrace high performance and preoccupy high prices, which will enlarge based on the aggregate and worth of activities needed to integrate a device. The products must centralise on one activity, begin at the cut-price, enhance performance and ultimately develop to apprehend a large portion of the market (Nielson, 2016). The implementation of Christensen's theory will play a vital role in the planning, production and design of apple self-driving travel bag.
Impacts of Internal and External Factors
The planning of developing self-driving travel bag by Apple will have several internal and external impacts on its planning, production and marketing activities. The following factors can be identified while designing the framework of self-driving travel bag by the organisation:
Market Research- Introduction of self-driving travel bag can proffer new market research techniques like recognising the logo of the brand, subjective scrutiny and potential of tracking in the coming times. This will intensely promote the fabrication of innovative products and aid in creating a behest in the market (ltd, 2020). The increase in travelling has enlarged the demand for travelling equipment like suitcases, and the introduction of self-driving suitcases have created ultimatum in market structure. People are keen to buy these things.
Competitor Analysis- The technological advancement required to develop self-driving travel bags will help the organisation get ahead of its competitors and consider potential competitors in the market. The cost of advanced technology is high. Thus, the production cost is expected to be higher (ltd, 2020). The A.I. technology used in self-driving travel bags will help in following its owner and avoid crashes.
Feasibilities include other major factors like economic, technological and marketing factors on the planning of self-driving travel bags by the Company. The development of these bags would require advanced use of technology and tools that will be high-cost. It will result in high production cost for the Company and require high investments and the cost of production activities and involvement of employees and other staff (Perez et al., 2018). The final pricing of the Product will impact the market depending upon its cost, interests of people, reviews, and ratings after the purchase.
Process of Implementation
The implementation process of the autonomous luggage system comprises primary and secondary research that includes marketing research, planning, and strategies involving stakeholders and consumers. Firstly, there is a need for introducing technological advancement by the management to construct self-driven travel bags. The innovative travel bags require many technological functions like A.I. technology, assistant, ability to assist the location and avoid crashes in the crowd (Ayyagari V et al., 2019). The autonomous travel bag requires much time in planning, as it is a company's high-cost production activity.
The planning consists of several factors like financial, technological, environmental, current trends and impacts of consumers in the market. The ongoing trends in the market provide a huge opportunity for companies to generate large-scale profits from their production. The management centralises the tools and pieces of equipment needed to develop the Product and focuses on its employees' efficiency in the production activities.
The management team constantly monitors each activity of the production. It examines the result in each phase so that there are no chances for any errors that might create issues for the Company. The working of a management team plays a major role in the implementation process of developing a new product in the market (Ayyagari V et al., 2019). The final pricing of the Product is done after its production. The final stages of designing the Product include its distribution, retail and consumer needs—the rating and review after purchasing aids in determining the marketing value of the Product in the market.
Critical Analysis of the Financial Resources that Necessitates for Automated Luggage
Apple reported the Company's biggest revenue, with $91.8 billion in the year 2019. The fiscal chart of 2019 presents the Company's net income of $55.25 Billion and the sales of 4260.17 Billion. As per Aljafari (2016), in the fiscal year of 2019, Apple's iPhone business reported 54.7% of total deals. The developing services were estimated to 17.7% returns which created the profit of 9.8% of sum amount. The financial balance sheet of Apple disintegrates into assets, liabilities and shareholder equity. The sum of the Company's assets is equivalent to the total of its shareholders' liabilities and equity. The 2019 fiscal report shows the Company's $338.52 Billion assets and liabilities of $248.03 Billion and equity of $90.49 Billion. The Company's cash position is strong, which can support the market penetration of self-driving travel bag". Apple owns cash and cash equivalents of about $50.5 Billion and holds the $44.08 Billion market securities. However, Apple holds these cash and cash equivalents abroad that require the Company to pay taxes to bring the money to the country; therefore; the Company borrows cash and engages in repurchasing the shares.
According to Apple Inc (2019), the Company's accounts receivable comprise of $14.1 Billion, which depicts the sum indebted by other companies that Apple has collaborated with. Even though an extension of credit in trade is a huge risk, Apple provides credit indemnity to restrict its threat to this vulnerability. The enterprise also accounts plant, property and equipment of $37.6 Billion, which clearly signifies its property value. The Company's present liabilities results up to $89.7 Billion, which comprises of accounts payable of $29.1 Billion and $9.9 Billion on the issue of business paper.
As stated by (Statista, 2018), Apple also holds long-term arrears of $108 Billion, which comprises of fixed-rate arrears and floating-rate arrears. Therefore, the Company has implemented interest rate exchange to administer the interest risk that could threaten the Company. Apple's other outdated liabilities amount to $31.7 Billion as of 2019. Moreover, the Company's return on equity in 2019 increased to 55.92%, which is why the Company chose to design and launch a "self-driving travel bag". The Company's balance sheet evaluation suggests the capability to finance the new Product in the global market and also to fund the new Product for research and development.
Business model to create value for potential customers.
The customer value proposition is one of the most effective models that help in generating value in the Product while targeting potential customers. This is computed by analysing the gross aggregates of profits that the retailer offers to its consumers (Newman, 2018). Customer value management was introduced in the 1980s and assists different businesses in obtaining good customer relations that expand its operation.
The development of self-driving travel bags will provide numerous benefits for people travelling across the world. The innovative features and functions of autonomous travel bags can generate value for potential customers in the following ways:
Monetary value- Before purchasing any products, customers look for the value it will provide to them. The pricing of the Product and the value it offers along with its features and functions are determinant in choosing the Product (Newman, 2018). The convenient cost of the autonomous travel bag, including its innovative functions, will encourage the consumers to invest their money on buying it. The actual cost and the facilities of the Product evaluate its monetary value in a customer's perspective.
Functional value- The Product's features and functions compared to other similar products in the market determine its functional value. The lack of identical products will lead to an increase in the price and demand among the users. The advanced features of the products and its advantages help create value in the share market (Karaoulanis, 2015). However, few companies have launched a self-driving travel bag, but apple needs to add more innovative features to make its own niche.
Social media marketing- The companies can increase their customer engagement and promote their brands in using social media networks. Popular social media apps like Facebook, Instagram, YouTube and Snapchat can be used to post about the innovative features and functions of the Product that will help create awareness about the brand. The social media pages of Apple can aid in inducing the consumers towards the innovative Product and its characteristics (Karaoulanis, 2015). Several posts can be made concerning the importance and characteristics of self-driving travel bag along with its price and advantages offered to the users.
Advertisements- The commercials play a significant role in the promotion of brands on a global scale. The advertisements for self-driving travel bag can create huge promotion and can engage many buyers for the brand. Usually, a consumer gets easily convinced by watching television commercials of the brands and tends to purchase those items (Karaoulanis, 2015). Therefore, the construction of effective commercials and advertisements on television, posters and hoardings can help in influencing consumer's potential value.
Critical Evaluation of the Potential Risks and Recommendations for Automated Luggage
The self-driving luggage navigates without support through traffic airports as it is designed with digital technology. Apple plans to launch this product in the international market to ease customers on moving the luggage without any human effort. The luggage is framed and developed with many sensors that allow following the consumer without colliding with any physical objects. However, this automated luggage may pose certain risks when launching in the new market. As the price of Apple products is really high even on small cell phones, this automatic luggage is priced at $799, which seems too high for middle-class consumers. However, this digitalised luggage may draw maximum attention from the business class and bourgeoisie section of the society. Depending on the dimension and economy of the market, this luggage may only be accepted in the developed countries. Another risk it can pose maybe because of battery life. The automated luggage may need to be charged more often, which might need the consumer to hold and move the luggage if the battery does not last long. However, even this Product may not achieve market stability as Cowarobot; an Asian Company offers the same product at a much lower price (Businesswire, 2016). Based on the mentioned risks, few recommendations are also suggested, such as the connection of power of the suitcase in the phone and not the remote control. The remote control should be replaced with the software application in the phone so that the connection may not be lost when the automated luggage is turned at a distant place. Also, the newer version of automated suitcase should have premium quality and quite lesser price than the one offered by Cowarobot. The decrease in price and increase in quality might mark the Product's stability in the long-run (Smithson, 2019).
To conclude, it can be said that the introduction of self0driving travel bags by Apple will have a huge impact on the market system and generate impressive benefits for the Company. The autonomous travel bag comprises of many facilities resulting from advanced technology and helping the travellers in a convenient way. The process of implementation and analysis of financial resources evaluates that the production cost will be high. In addition, it will also create an opportunity for the Company to earn massive profits and set the trend in the travel sector. Overall, it centralises the production of autonomous travel bags in the travelling industry that will result in the technological development of the Company.
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