Hermosa Beach, CA

Monday, April 05, 2010

Apple Did It Again. What Lessons Can Business Learn?

Is there anyone today who doubts that Apple products have the "it factor?" You know, that certain je ne sais quoi, that indefinable something that makes them special. Along comes the iPad, and they seem to have done it - again. Never mind the expense; never mind what features the pundits believe the iPad lacks. The fact is that they sold an estimated 750,000 on the first day and it is believed that number will grow to well over 7 million before year's end.

Every Apple new product launch gets enormous attention. Part of it is due to the mystique they have created around the Apple brand, but most of it is due to Apple's ability to "know" what customers want and deliver it. What's interesting is that they entered into existing markets where, according to many, they should never have had a chance of succeeding. Can you do the same? Can your company learn something from the Apple strategy?

In 2001, they entered the MP3 market, then dominated by Sony, and delivered a "much too expensive" product. They followed this with the iPod Touch, and created the necessary backbone to make it work. This helped launch the "much too expensive" iPhone in 2007/2008, a segment dominated by Nokia and Motorola and smart phone brands RIM and BlackBerry. In each instance, those products went on to sell millions and all other former leaders became followers.

What are the lessons? Apple's consistent ability to deliver what customers will buy should be a wakeup call to every business to reconsider their strategy. They craft a beautifully designed product, combine it with intuitive interface, and add an ease-of-use factor unmatched by anyone else. This is what the customer wants and is willing to pay for.

If your company has a great product and sound strategy that does not match these consumer-centric factors, and does not resonate with the customer, then it will remain brilliant – inside your company's walls. You may get some good results, but are they "Apple-level" results?

Apple did not invent MP3; they did not invent the Internet; they did not invent the cell phone; yet they dominate these markets. Similarly, the iPad tablet is not a new concept. Bill Gates stated some five years ago that everyone would have a tablet, which they demonstrated at Comdex.

To compete successfully against Apple or any other juggernaut, focus on the customer, deliver a quality product, give it some design pizzazz, and make it easy to use. Design is often dismissed as less important, but as can be seen from Apple products, that is an important part of what they deliver. Second-rate products will just not do – as many MP3 players and phone makers have discovered.

In the book, Competitive Intelligence Advantage (Wiley, October 2009), author Seena Sharp argues that companies all too often believe "'we know what is best for our business" They often do not. And while many managers make bona fide efforts to gather information, they most often don't use it for reasons Sharp enumerates in her chapter, "The Emergence of the Hapless Executive" As she states, "It is not so much that they do not believe what they are reading or hearing – it is more the fact that it is more 'comfortable' to continue what they have been doing. After all, it worked in the past"

Success in business has many parents. One of the most effective ways is to give customers what they will buy – not what the company thinks they will buy. When there is disagreement between the two, the scale must tilt toward the customer.

Seena Sharp

Principal

Sharp Market Intelligence

Hermosa Beach, CA

310.379.5179