Although the factors behind Apple’s commercial success have been widely analysed, the topic of the company’s brand management practices – pivotal in driving the brand’s long-term growth – hasn’t been adequately covered yet.
So, today we are not going to focus on aspects such as Apple’s advancement in technology and product innovation, its state-of-the-art supply chain management or the unique corporate culture created by its extraordinary CEOs. While crucial, they are outside of BrandStruck’s remit and have been already investigated by other specialist publications.
Instead, we will analyse a series of strategic brand decisions that have led to Apple becoming the most valuable brand in the world. Although they seem almost obvious today, making those choices required unprecedented focus and discipline few companies can pride themselves on.
1. Cohesive brand architecture and strict naming strategy
Apple’s adoption of the “branded house” architecture model (read more about it here) has been instrumental to its success as it enabled the company to build one strong brand with one set of distinctive brand assets.
All Apple products, whether it’s the MacBook, iPad, or Apple Pay, are intrinsically linked to the Apple umbrella brand, play a secondary role to it and are positioned as product variants rather than sub-brands. What that means in practice is they don’t have their own brand identities but utilise the identity of the Apple umbrella brand and, as a result, don’t compete with the main brand for attention.
Additionally, most Apple products follow a strict naming strategy, according to which, all must have self-explanatory names (iPhone, iOS, Apple Watch, Apple Music, Apple Pay, etc.) and adhere to established naming conventions (e.g., Apple Product Name, iProductName, etc.). There are only a few exceptions to this rule (e.g., AirPods or HomePod).
Apple has never made any strategic decisions that could undermine this approach; this naming strategy not only allows the company to leverage its umbrella brand to introduce new products, ensuring instant brand recognition and trust, but it is also more effective in terms of budget spend and enabling operational efficiencies.
Little time and budget is wasted when everybody in the company knows that new products need to become part of the branded house and have short, descriptive names. Equally, there is no temptation to launch new products that could compete with the umbrella brand and marketers can get on with rapidly launching campaigns because the branding and the tone of voice are already established.
Could other companies replicate this strategy?
Yes. Yet, many choose not to, preferring to launch products under new brand names, over-investing in branding and marketing only to struggle to build brand awareness of new offerings effectively. Think of all the product names Apple’s competitors have launched (and now are trying to get rid of, moving to a more unified brand architecture like, for example, Microsoft).
Lesson / advice
We might sound like a broken record, but the branded house architecture should be a default choice for any company unless there are strong business reasons against it (e.g., owning two or more competing products in the same category).
2. Ecosystem strategy and smart brand extensions
Apple has managed to achieve something that few companies (if any) could ever pull off. It has created a seamless, vertically integrated ecosystem encompassing devices (e.g., iPhone, Mac, Apple Watch), software (e.g., iOS, App Store, Pages), content (e.g., Apple Originals) and services (e.g., Apple One, Apple Pay, Apple Music). Apple’s ecosystem strategy has contributed to the company’s tremendous financial success and is one of the factors why Apple is most likely to be successful for years to come (if not stopped by antitrust enforcement).
Apple has consistently leveraged its strong brand identity to diversify into new segments by launching multiple strategic brand extensions within its branded house framework. These extensions not only work smoothly with other Apple products and services but also make them more desirable. For example, storing pictures in iCloud makes consumers more likely to continue using iPhones.
The company has also made consistent branding choices as no new products or services have been given separate brand identities.
Is Apple the best or the biggest in each of the categories it is present in? No.
Has it introduced multiple upselling opportunities, created a sticky customer experience and made it painful for any user to leave its environment? Yes.
Could other companies replicate this strategy?
No, we’re afraid not. It’s very tempting, but operationally almost impossible. The strategy that has made Apple so successful might have ruined other companies had they tried to apply it. Even today, it’s hard to find any business that is highly successful in both hardware and software (not mentioning content) and capable of integrating them to the extent that Apple has. There are examples of companies that almost went bankrupt after trying to expand to new categories (e.g., GoPro when it attempted to become a media business).
Lesson / advice
Don’t enter new categories unless you know you can integrate them into what you’re currently great at. Brand extensions should make your umbrella brand and the core of your business stronger, not weaker. If you decide to launch brand extensions, make sure they are strongly related to your umbrella brand.
3. Unique approach to mergers & acquisitions
There’s no bigger distraction for any business than ill-considered mergers and acquisitions (M&A) as they often lead to organisational mayhem. Integrating acquired companies into the core business and making them part of the existing brand architecture and product portfolio without losing talent or revenue is one of the most difficult tasks.
In situations when there are no strong strategic reasons behind the acquisition other than the potential financial gains, companies involved in M&A might create multiple organisational, branding and marketing problems for themselves that cost them focus instead of simply expanding their market share.
That’s not the case with Apple.
Apple’s merger and acquisition approach and post-M&A branding strategy has been unique in the tech industry. Unlike many of its competitors, Apple typically acquires smaller companies that can seamlessly integrate into its existing product lines or contribute to new product development. These acquisitions are often not about gaining market share but rather about acquiring specific capabilities represented in technology or talent. Acquisitions have been used to improve and expand Apple’s core services, such as Apple Music, Siri, and its various apps. Some of Apple’s acquisitions have been pivotal in developing new products. For example, the acquisition of AuthenTec led to the development of the Touch ID fingerprint sensor, and the purchase of Beats Electronics was a significant move into the music streaming and audio products market.
When it comes to Apple’s post-M&A branding strategy, Apple integrates almost all of the acquired companies into its brand and technology ecosystem. As a result, they lose their names and brand identities and simply become part of Apple. There are a few exceptions. In case of acquisitions of well-known brands like Beats by Dre or Shazm (not typical acquisitions for Apple), Apple integrates them into its product and technology ecosystem but doesn’t change their distinctive brand assets like names or logotypes, believing that on their own they could reach certain consumer segments more effectively than Apple itself. Apple’s branding approach to acquisitions is almost unheard of as almost no other tech company has such an easy to understand portfolio and clean brand architecture.
Could other companies replicate this strategy?
Only theoretically. It’s a well-known fact that there’s a lot of corporate ego involved in M&A activities and many companies acquire other businesses for reasons other than strategic benefit and alignment. They often struggle to integrate them organisationally and don’t have an effective post-M&A branding strategy. As a result, they become a house of brands (like Alphabet and Meta).
Lesson / advice
Minimise the ego component and make sure you have solid strategic reasons to acquire a company. Always have a plan beforehand detailing what will happen to the acquired business, its brand, products, processes, data, and people. If you want to be a company that adopts a branded house approach to your brand strategy, don’t buy businesses that you can’t integrate into your core business (e.g., your competitors). An approach to M&A that doesn’t take a sufficiently hard look at the impact of acquiring and integrating a new brand too often results in talent leaving, time and resource wasted, and a branding mess that can take years to untangle, which dilutes efforts on your existing brand.
4. Mastery at positioning and repositioning
If you follow brand and marketing news, you must be aware how frequently companies change their brand strategies and the set of values they are built on. In particular, appointment of a new CMO is often followed by a new repositioning process. Usually this effort simply relates to a new leader establishing themselves and bringing their experience into a new environment as they see the company with fresh eyes, but in some cases it can be harmful for the business.
Apple has undergone only one repositioning process. For many years, it was positioned as a challenger brand on a mission to revolutionize the personal computer market. This positioning was in particular visible in the 1984 Macintosh ad and then reinforced in the famous “Think Different” campaign, which honoured “the crazy ones, the misfits, the rebels, the trouble-makers, (…), the ones who think differently”. However, similar to many challenger brands that succeeded (you can read our article about it here), Apple realised that, if it wanted to grow further, it needed to attract people it hadn’t spoken to before and become more widely acceptable.
As it expanded its product portfolio significantly and became one of the market leaders, it had to change its strategy. It started applying a more mainstream approach to its communication: it moved from symbolism to more literal messaging, from image-driven communication to product campaigns showcasing how Apple’s products make people’s lives better / easier and from an uplifting and aspirational tone of voice to a more human and humorous style.
However, despite this strategy shift, certain things have not changed. Apple is still built on its core values of simplicity, the best in class design and human-centricity (rather than technology-centricity). It continues to build a premium brand image in an unprecedentedly consistent way – it doesn’t offer discounts and never leads its communication with messages related to price. To some extent it even builds the distance between its brand and consumers, an approach more typical of luxury brands rather than tech companies. When compared to its competitors, Apple does one big thing at a time rather than everything at once. For example, it doesn’t have a lot of new product launches but they are always very well thought through.
Since the company positioned itself through the values rather than the category in which it was operating, there was no need to further reposition Apple when it started entering new segments. The only relatively new aspect to its positioning is its social responsibility focused on protecting privacy, encouraging inclusion & diversity as well as caring about the environment (Apple is a carbon neutral company).
Could other companies replicate this strategy?
Yes, by all means. That should be the easiest part, even though so many companies get it wrong.
Lesson / advice
Have a solid brand strategy and stick to it for as long as possible. Reposition only when necessary.
There are multiple factors that have made Apple one of the most successful companies on the planet and the way the company manages its umbrella brand, its biggest asset, might be one of the most important ones.
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Magda Adamska is the founder of BrandStruck.
https://www.linkedin.com/in/magda-adamska-32379048/
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