Question
Apple's strategy of vertical integration is successful in driving up their margins due to several reasons. Firstly, Apple controls all aspects of their product, from design to manufacturing to retail, which allows them to maintain high quality standards and justify premium pricing. Secondly, Apple's retail stores provide a unique customer experience, which enhances brand loyalty and allows them to sell products at higher prices. Lastly, vertical integration allows Apple to keep a tight control on their supply chain, reducing costs and increasing efficiency.
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An Iconic Founder: Luxury brands are usually personified in an iconic founder, whose life story is compelling. They have no choice but to make beautiful things despite hardships. Steve Jobs was an icon of innovation, and his passing away made his persona transition from stardom to sainthood. Artisanship: For people with discretionary income, the experience of living with luxury products is irreplaceable. Apple's stunning design simplicity results in a sleek appearance and a delightful user experience, which increases customer loyalty. Vertical Integration: Apple Retail stores are spaces in the way where a customer steps into a brand and fully experiences it through sight, touch and smell. Jobs realized this and launched the iconic Apple Store, which positioned Apple as a luxury brand, driving up the margins. Apple stores make over $5000 in sales per square foot. Global: The global elite has more homogenous tastes than other cohorts, making it easier for a luxury brand to permeate geogr...
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