Apple Inc. (AAPL) is likely part of your life. Maybe you have an opinion on that. Or you might be curious how Apple became the first company valued at more than USD 2 Trillion. I was, so I made a Strategy Canvas for Apple.
If you are new to Strategy Canvas, check out our Introduction to Strategy Canvas.
The layout of the canvas shows the functional structure of the strategy: At the top, a catchy tagline is a useful identifier when comparing alternative strategies, and helps the organisation keep the identified strategy in mind. Prominent below the headline, the core challenge sits atop the practical actions to achieve it. Policy is placed in the transition of the fact-based diagnosis to actions. The Strategy Canvas layout is designed for use in battle.
The logical structure of the canvas is different. It starts with the Challenge, which determines the scope of relevant facts in the Diagnosis. Insights from the Diagnosis are expressed as Policy, which determine Actions. Finally, the Tagline is an expression of the whole of all these elements. This is the order in which we’ll walk through the Apple Canvas.
Apple doesn’t have a mission statement, but does end many of its press releases with:
... Apple’s more than 100,000 employees are dedicated to making the best products on earth, and to leaving the world better than we found it.
This, however, won’t do as a Challenge, which should focus on the problem rather than the solution. Instead, we’ve chosen the following statement:
We will dominate in an aggressively competitive Consumer Technology market.
These are the factors that will be critical to Apple achieving the challenge.
On the whole, Apple users are remarkably loyal, giving the company freedom to innovate where other companies, with less trusting customers, could not.
Apple recognises that the larger part of its market is less interested in the technology, than in what the technology enables them to consume and do.
Good design expands the market for technology, by making it more accessible, approachable, and attractive.
In a competitive environment in which success depends upon regular introduction of new products, services and technologies to the marketplace, Apple’s status as a trusted brand enables it to delay these introductions until products are truly great.
Technology, Design, and Business requirements for success are interdependent; the best solutions come from focussed collaboration, across disciplines and backgrounds, towards a shared goal. Apple has a tradition of “connecting the dots”.
Politics, notably in China, threaten Apple's supply chain and customer privacy. For example, Apple was strong-armed by the Chinese government into pulling more than 47,000 apps from the Chinese App Store and to shut down the iBookstore and iTunes Movies in China.
Privacy and trust are two sides of the same coin. To earn and maintain the trust of its customers, Apple must respect and guard their privacy.
Once introduced, new products, services, and technologies are quickly commoditized, eroding margins; to remain competitive, the company must continually renew its propositions.
“Ubiquitous” or “Ambient” computing refers to the trend to incorporate computing technologies into everyday objects, environments, and interactions, including the Internet of Things, voice technologies, wearables, etc.
From the mouse to touch screens, to watches, Apple has a history of successfully bringing new user interaction paradigms to the mass consumer market. The most promising candidate for the “next big thing” in user experience is Artificial Reality.
Products are constrained by their supply chain. Supply chain partners are incentivised to optimise production to serve the greatest number of customers; over-reliance on these partners therefore leads to commoditization.
Customer Experience [0B], including every touchpoint and interaction with the company [0E], is the source of Customer Trust [0A], which must be nurtured and protected with priority. Any partners or suppliers coming between Apple and its customers should be disintermediated [0K].
Focus Technology, Business, and Design R&D [0E][0K] to stay on the forefront of research into new interaction paradigms [0C][0I][0J], with an emphasis on customer empowerment and delight [0B]. Frame new introductions in terms of customer emotions and experiences, rather than technical performance and specifications.
Use Customer Privacy to differentiate against competitors. Apple has the trust of consumers [0A], allowing it to command a premium and, consequently, to forgo revenue models based on selling data about its users, Unable to command a similar premium, most of Apple’s competitors are compelled to adopt such privacy-compromised models, undermining consumer trust, and strengthening Apple’s competitive advantage [0G].
Apple must prioritize delivery of truly great products, through focus and devotion to detail. Consumer trust, difficult to win, is easily lost [0A]. Rather than first to market, the focus is on best in market [0D].
Turn to provision of services. Compared to products, services – integrating tools, content, and delivery [0E] to provide immediate gratification – are a step up the ladder of consumer value [0B]. Subscription-based service revenue models constitute a longer term, more intimate, customer relationship.
Design and develop products and services holistically [0E]. Optimise hardware, software, content, user interface, and delivery together as integrated systems, optimising for customer experience [0B] [0C]. Position products as channels for services and components of ecosystems.
Apple Watch delivers on Customer Experience Innovation [1B] and System Building [1F], as well as improving Apple’s (literal) position to deliver services [1E].
Having another brand of earpods connecting an Apple device to a user’s ears is stark disintermediation. In addition to delivering on Innovation [1B] and services [1E], AirPods give Apple control of the listening experience [1A].
Apple Stores place Apple in control of the retail shopping portion of the Customer Experience [1A], with an emphasis on high-touch Service [1E].
HomePod gives Apple control over the listening experience [1A], integrates with and extends its ecosystem, [1F], and adds a channel to deliver audio-based services, including Apple Music and Siri [1E].
Building LiDAR and Ultra Wideband into Apple products prepares them for Artificial Reality. [1B]. ARKit seeds the developer and partner ecosystem to develop new AR applications.
HomeKit is a framework that links smart home products together and adds new capabilities to devices like lights, locks, cameras, thermostats, plugs, etc, into an an integrated system [1F] letting users control smart home products using apps on iPhone, iPad, or Mac, or Siri voice commands [1E].
Privacy by Design is an approach to systems engineering that takes privacy into account throughout the entire process. [1C]
Stronger privacy regulations advantage Apple over competitors whose business models rely on the sale of customer-generated data. [1C]
The move to proprietary Silicon chips gives Apple greater control over product performance [1A] and the ability to more tightly integrate software and hardware [1F].
Like startups, and military organisations, Apple is organised by function; the way to advance in the company is to get better at what you do. This nurtures excellence in each specialised competence and, because every competence relies on the others, also encourages collaboration [1D].
Apple Services include the App Store, Apple Music, Apple TV, AppleCare, iCloud, Apple Arcade, Apple Card, Apple News and Apple Pay [1E]; all of which are integrated with their hardware products [1F].
The Shenzhen manufacturing ecosystem that Apple relies upon is highly-specialised, complex, and inter-connected. Shifting production to another region can only be a long-term project, but preparations have begun, with investigations into the potential of India as an alternative [1F].
This phrase identifies customer experience as a priority and gestures toward service, simplicity and minimalism.
Apple is doing fine. My purpose in this post is to provide a familiar handle to help you better grasp the Strategy Canvas. The finished canvas stands as an efficient communication tool, but its real value is as a framework for discussion and analysis. Good strategy evolves from the process of developing a coherent canvas.
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