Channel Conflict Apple Case Study

Building back Apple’s Reputation By Resolving Vertical Channel Conflicts

Paulina JaswiecChannel Management

Background

Business Strategies

Market Share Analysis

Solving Channel Conflict

CONTENTS

1997

2001

2003

2005

Online Stores Opened

50 Retail Stores All Over US

1st Retail Store Opened

Worldwide Growth Strategy Developed

Resellers fight back: “apple is eating into our business.”

Relationship Declining Between Apple & Its Resellers

Resellers fight back: “unfair preference to it’s own retail.”

Resellers fight back: “unethical business practices, by getting more sales directly”

Resellers fight back: by creating TellOnApple.org where employees, customers, and resellers share negative content on Apple.

Apple’s Life Long Business Strategy

Convey Value

Enrich the loves of people by providing state of the art technology (proven by money spent in R&D) and by approaching each customer with the’ apple quality experience’.

Create the Experience

Easy to use, seamless integration, innovative product and retail store, equipped with educated employees.

Inspiration

Working for a higher purpose together, dedicated to those whom share the same vision

Business Growth

Expand internationally and build strong brand awareness.

Goals

Vision is everything. Successful companies know that your customers promote your business the better than any marketing campaign. When you enrich lives of others it spreads like wild fire.

Resellers Not On Par With Apple’s Philosophy

Convey Value

Value NOT Shown

Create the Experience

Unknowledgeable staff, product & company misrepresented, poor purchase or service experience.

Inspiration

Selling in MAIN priority of a reseller no matter the product or product price. Low exposure.

Business Growth

Geared on their OWN business growth

Goals

Apple’s message is lost:Don’t just sell products. Sell the experience and enrich the lives of others.

A Message from Apple

Taken from Apple’s Website. Under Accountability Category

Breaking Down Apple’s Retail Distribution Strategy

Phone Sales

AT&T 28% Top SellerAPPLE 21%VersionSprintE-Bay

iPad Sales

APPLE 40% Top SellerBest Buy 26%Wal-MartTarget Amazon

Mac Sales

APPLE 47% Top SellerBest Buy 27%Wal-Mart

Taken from: Breaking Down Apple’s Retail Distribution Strategy. http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/

Apple’s Market Share

21% 47%

Out of ever 5 phone sold, 4

are sold by resellers. This

makes up almost 80% of

the market theirs.

Phone

Out of every 5 iPads sold 3

are sold by resellers. This

makes up 60% of the

market theirs.

iPad

Out of every computers

sold, more than ½ are sold

by resellers. This makes up

53% of the market theirs.

Mac

40%

After breaking down the data published by, the Consumer Intelligent Research Partners, we are able to see that, Apple as a company has a large market share, but overall the retailers combined have a a larger market share for each segment.

… Resellers still act out in lawsuits

Add Title Here

Store Walk –In’s

Although seventeen thousand people

(in one day) frequent the Apple retail

store, not many purchase anything. A

walk-in does not guarantee a sale.

85 million visited Apple stores.

Sales & Service

This section is divided into two

categories. Sales are made up of new

customer and returning customers.

Service is strictly focused on an already

purchased product from worldwide

source.

Apple’s Retail Store Sales

Why Retail Stores

I have only purchased once from the

apple store. However I have been into a

retail store over 10 times to get help on

set-up, product question, product errors,

and replacement of broken parts.

Personal Experience

So why are resellers worried

about the APPLE retail stores?

Nature of Channel Conflict

What is FAIR and RIGHT??

Businesses want higher profit margins, more market share with lower competition

Limiting Distribution Channels

Open Distribution Channels

• By focusing on a single channel you lose money• Loss of market share • Higher competition

• Maximum returns• More opportunity to catch new customers• Faster brand recognition• Maintain a competitive stance • Find out more about target market• Long term profit

1. Communication & Collaboration:

• Open doors of communication

2. Common Plan:

• Developed and implemented together

3. Share Business Planning Processes:

• Using the honesty policy, and share vision

4. Define Direction:

• Set clear goals and outline expectations

5. Roles & Responsibilities:

• Define and hold one another accountable

6. Training and Internal Development:

• Provide extra programs, or course of action

Solving Channel Conflict

THANK YOU