Apple’s Business Unit Strategy

Admiring Apple for only its well-designed products and clever commercials is only scratching the surface. Apple is actually a great case study on brilliant business modeling. Apple treats every product as its own business unit. What this means is that every product line could exist as its own standalone store. Even though all Apple products fit into each other in some way, every Apple product also has to standalone in terms of generating revenue.

Apple’s free iTunes software is a good example of business unit success. The iTunes software isn’t just an application that plays music. The iTunes software is the gateway to the iTunes Store where consumers can subscribe to podcasts, purchase ebooks, and download applications. Since it also runs on Windows, you don’t need to own an Apple device to use it. In fact, you don’t even need to own an mp3 device to use it. Although iTunes is free, it has literally generated billions of dollars in revenue.

The iPad is another good example. To upgrade its operating system and to backup the software, you will need to actually sync it to a computer using the free iTunes software. In the end, however you actually don’t need to own a computer to own the iPad because the iPad is a computer all by itself. The iPad has its own line of applications that can be purchased and installed straight onto the iPad through the built in Apple App Store. Books and music can also be purchased straight onto the iPad using the built in iTunes Store application. In this sense, the iPad is a portable cash cow for Apple. And let’s not forget the billions of collars in commission that Apple gets for every iPad accessory that is on the market.

Take a look at your own products and services, and examine if they could standalone as a business unit. Think about the kinds of accessories that could go with your product, or how you could provide add-ons to your services. Even your website should stand up to this scrutiny. Just like the Apple website, your website should be its own revenue generating business unit, and not just a collection of words. Look at your business through the Apple lens to see how you can maximize revenue for every product and service in your business.

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