Businesses require measures that can track, monitor and access the performance of various business processes. The basic task of the business metrics is to indicate a company’s progress towards achieving certain long or short term objectives. Some organizations include business metrics in their mission statements while others just incorporate them into their general work plan. Since business metrics quantify and track all areas of business, they should be detailed and specific; most companies view metrics through existing practices and objectives (Sparks, 2016). Also, business metrics should address key audiences surrounding a business e.g. customers, investors, and employees. This has been enhanced by the use of business matrices and project measures to make sure that their products gain a competitive advantage in the market share. Apple’s metrics include performance metric, innovation metric, purchases metric and market metric.
Performance metric
Apple, Inc. is among the most successful companies in the world, have been in a constant state of improvement regarding product quality, product sales and profits. It has great techniques incorporated into their various processes that utilize the company’s strengths to overcome weaknesses and enables the company to exploit the available opportunities fully. This has been the primary driver of the success of Apple despite the stiff competition in the market from different companies with the same products. Apple has developed a strategic control system used to monitor and measure the continued effectiveness of the various strategic plans. To develop their competencies, Apple invests on equipping their employees with solutions like efficient distribution systems and user-friendly interfaces. To measure their performance, Apple uses several indicators which are; customer satisfaction, shareholder value, employee commitment and alignment and core competencies. These performance indicators help in managing the long-term performance of the company instead of a controlling approach that will only enhance short or medium-term performance (Fealing & National Science Foundation, 2008). Moreover, the indicators aid in the progress of the activities and unit advance. Overall, this metric helps Apple to keep track of their performance in the effort of achieving their set objectives and goals.
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Innovation Metric
As the most valuable brand in the world, Apple produces new products which are highly profitable despite the high pricing. This is a major strength of the company as it comes with high-profit margins and huge sales for the product. Through innovation, based on the company’s intensive growth strategies, Apple can incorporate latest technologies in their products to ensure competitive advantage (Sparks, 2016). Although the innovation metric being used does not reflect a positioning towards a future of innovative products, Apple’s rapid innovation have kept the company ahead of its competitors and enabled its continued leadership in the industry. Also, Apple focuses on products with delight customers and inspire employees to concentrate on the value and consistency of innovation. According to the management of Apple Inc., the most important thing to them is to make sure that the customers love their product, and not just about buying them. Therefore, innovation is essential for the success of the company and to ensure that in the middle of strong competitors, it can create a competitive advantage for its products.
Purchases Metric
Apple’s new metric known as the installed base related purchases was established since the company accounts for content sales in different ways depending on whether it’s using the wholesale model or the agency model. For instance, iTunes purchases have always used the wholesale model while third-party apps sold on the App Store use the agency model. This metric represents the gross dollar amount of content that the users purchase irrespective of the underlying accounting (Fealing & National Science Foundation 2008). Also, Apple used the installed base related purchases to determine the impacts that the strengthening dollar causes on their reported results. However, critics argue that this metric was introduced by Apple to shift investors’ focus away from the unit sales of some of its products, due to recurring service revenue. Through this new metric, Apple can account for sales and recognize the net commission that it earns through the two different models.
Market Metric
Marketing metric contain a set of performance indicators in the market that allow the business to evaluate their overall marketing performance over a given time and help achieve greater efficiency in business activities. The success of a business depends on the company’s marketing abilities which are the significant role played by the market metric. The metric is categorized into financial, behavioral, consumer profile and physical availability (Sparks, 2016). In Apple Inc., financial metric provides figures from financial statements that enables the company to determine its market position on its revenue, profits, and sales. Behavioral metric relates to the market penetration, market share, and purchase frequency. Apple is good at customer retention although poor in market share and market penetration due to the high prices of their products. Consumer profile and physical availability of the product is addressed as Apple has established multiple stores both locally and internationally. Moreover, Apple has set up customer base mostly with students and professionals who are the famous users of their products. The market metric helps the company analyze its customer-based performance so as to retain them and keep them satisfied.
Business Strategies
When a company has been established and outlined its plan, there must be set objectives and strategies for its aims and how to achieve its goals. Apple Inc. which is a market leader in the technology market and innovation is a successful business, great at product branding and marketing their products which are made possible by the set strategies. Moreover, high quality products and rapid innovation have played a significant role in the success of Apple. Apple’s general and intensive strategies have greatly influenced the company’s success in addition to ensuring creation of a competitive advantage against other competing firms. With innovation and excellent product design, Apple is able to keep the top position despite the high pricing on its products. Also, promotion of the Apple products through websites and media outlets attracts more consumers and enables the company to broadly capture the market and reach to customers in all market segments (Lashinsky, 2012). Venturing into entirely new markets for example with the Apple Watch expands their market by creating new and unique products which attract more customers and enhance market development.
Apple’s profit records is evidence that their strategies have has significant impact to its success since its inception. However, due to unpredictable nature of the marketplace, strategies should keep changing to include the consumers’ needs and add new technologies (Fealing & National Science Foundation 2008). Also, the outcomes of a strategy relies on the response of the consumers and their economic power to purchase the products manufactured. The only strategy that will stand the changing times is innovation strategy which is the crucial factor to any successful company. To ensure continued domination in the market and high quality of its products, Apple should refine the products and support new features and even performance boosts on existing models as well. Also, they should give more time to their invented products in the market before upgrading them to ensure that the consumers are not pressured to constantly change their products with the frequent updates to their products. This way, the users will enjoy the quality product for a longer period before upgrading to better products.
Recommendations and Conclusion
Apple Inc. is among the most successful companies with a good brand image and high innovative processes in the company. However, the company faces significant competition and imitation from other companies manufacturing the same product, which are the critical challenges in the world of business. Apple Inc. should incorporate strategies like the creation of new product lines and expansion of distribution network though building a high-quality product that fits the needs of different consumers. This is because Apple has a narrow distribution network, and in order to reach to more customers globally, the company should change its distribution strategy and product diversity in production to expand into a broader market of its products. Furthermore, through rapid innovations, Apple can invest in new product lines, for instance, the Apple Watch, to facilitate diversity in products which will attract more consumers and support the company’s growth. With available resources, Apple should invest more in innovation and research to produce superior strategies that will ensure they provide more quality, unique and cost effective products to incorporate all levels of consumers regarding income and preferences.
In conclusion, Apple’s mission is to bring the best products to their customers through innovative hardware, software and internet offerings. This mission will continually evolve to include changes in competition, market, and innovative product development. Furthermore, the business metrics and project measures will require regular reviews to include the changes in customer needs and preferences. Apple is a strong company which is set to succeed in the competitive industry of products with multiple manufacturers. With a notable competitive advantage, a good product line, and a strong brand name recognition, the company is in a position of continued research and innovation to keep attracting consumers in the future. This will also allow Apple to increase revenue with their creativity, produce excellent quality products and retain customer loyalty.
References
Sparks, D. (2016). Apple , Inc. Earnings: 3 Metrics to Watch. Retrieved from http://www.fool.com/investing/general/2016/01/21/apple-inc-earnings-3-metrics-to-watch.aspx
Fealing, K. H., & National Science Foundation (U.S.). (January 01, 2008). Advancing measures of innovation: Knowledge flows, business metrics and measurement strategies . Retrieved from https://www.nsf.gov/sbe/scisip/srs_innov_metrics_wkshp.pdf
Lashinsky, A. (2012). Inside Apple: How America's most admired-and secretive-company really works . New York: Business Plus.
Appendix
Interview Questions and Answers
1. What is the various business metrics incorporated in your business?
There are four primary metrics used in Apple Inc. they are: performance metric, innovation metric, purchases metric and market metric.
2. How do you determine the best metric matches in your business?
The choice of the metric is usually based on the objectives and goals of our company for a specified period. Therefore, the business metrics keep changing with change in the specific objectives and goals that are to be achieved at a given period
3. What is the effectiveness and efficiency of the business metrics in running your business?
The business metrics are powerful tools that greatly help in achieving the company’s goals and objectives as they act like guidelines to provide status directions of the different sectors in the enterprise.
However, some business metrics like the purchase metric and innovation metric have certain limitation and require improvement to provide excellent results after assessment.
4. What are the impacts of using business metrics on employees and the customers?
Through the various metrics, the company can meet the customers’ needs by providing them with products that satisfy them regarding quality and preferences. Also, the employees are focused and motivated and work towards providing the best goods and services which create a competitive advantage for the company.
5. What would you recommend future businesses on the choice of business metric?
The important aspect when choosing any metric in any business is the objectives and goals. The expected results of the company should also influence the metric to apply in your business. This is because every company has different goals which require various measures to achieve.
