Marketing Plan of Apple Incorporated': Company Background
Marketing Plan of Apple Incorporated': Company Background
Marketing Plan of Apple Incorporated': Company Background
Company background
Apple Retail Stores are operated by Apple Inc. dealing in consumer and computers electronics. The company sells
software, Smartphone, e-Book readers, Electronic music, Computers and other consumer electronics. Apple Inc.
was founded by Steve Jobs in 1977. Even though many products were developed under his watch including
PowerBook G3 and iMac as well as online store, the company continues to rely on electronics and box computer to
prevail in the market and make sales. The company has been bringing out cut-price versions of its Smartphone.
Looking even further out, the company is staking its future on new products that could take electronics and
computing power ever deeper into the routine lives of consumers. By the time Jobs passed on, the company had
advanced its technology into the market by ensuring that it integrated disruptive marketing into the computer
platform. Apple introduced the Macintosh thirty years ago with the promise to put the creative power of
technology in everyone’s hands. It launched a generation of innovators who continue to change the world.
“Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional
software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the
mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and
computing devices with iPad.”
“We believe that we are on the face of the earth to make great products and that’s not changing. We are
constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and
control the primary technologies behind the products that we make, and participate only in markets where we can
make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on
the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of
our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less
than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the
courage to change. And I think regardless of who is in what job those values are so embedded in this company that
Apple will do extremely well.”
Apple’s Goals
Marketing objectives
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Competitive Review
Competition in the technology sector is very high. According to Maverick (2018), “Apple is in direct competition
with companies such as Google, the Hewlett-Packard Company, Samsung Electronics Co. Ltd. and Amazon”.
Switching from one brand to another does not require significant investment.
The major competitors are arranged in following table according to their market shares.
Apple is popularly known as an innovator in the personal computer and electronics market. Even though Apple
experiences great competition from its rivals, the company capitalizes on its core competencies to stay ahead of its
competitors. Apple designs and develops its own operating system and hardware unlike like its competitors
including Samsung and Motorola, who use Google’s operating system known as Android. Since Apple products are
high-end products, customers of the company’s products are usually financially strong and willing to pay more for
user experience. Geographically, Apple’s prime target market includes Americas, Europe, Greater China, Japan and
Rest of Asia Pacific (Apple, 2018). The following are a list Apple’s target market-
Middle and upper income consumers (Usually consumers with a high purchasing power)
Customers who enjoy using technology. These include people who take delight in capturing
moments.
Students
Professionals in media and designs
Apple market consumers are busy people who like to use Smartphone for communication, entertainment,
information storage and exchange. The target segments in the marketing plan include professionals, students and
entrepreneurs. These segments have different needs as illustrated below.
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hands-free
Apple positions itself as a premium brand by keeping the price of its product and service high in order to
encourage favorable perceptions among buyers, based solely on the price. Usually, Consumers with high
purchasing power are the ones likely to buy Apple products because they are expensive. Some middle and upper
income consumers may stop purchasing Apple products if the company makes its products cheaper. In other
words, the fact that Apple products are premium-priced is a reason why some users are associated with the brand.
With reference to the perceptual map, Apple products fall within the high quality, high price section.
Apple has the highest brand equity in the world as of 2016 and it is the topmost ranked brand in the world. The
brand worth of Apple is 118.9 billion dollars. The brand has done a lot to reach this brand equity, but a major
contributing factor was its ability to give hit products back to back, and to reach across the globe with these
excellent products. The combination of both with the excellent marketing communications of the brand help Apple
reach the highest brand equity possible.
Product Strategy
Since its beginnings Apple Inc. has created different products. However, the most popular are:
Apple Inc. products present unique designs and features such as light weight, retina display, and different storage
unit sizes. Its computers are portable; its servers are simple and efficient. All the products interconnect with each
other.
Apple offers both products and services to customers. With reference to products, the company manufactures
phones, computers, tablets, televisions, watches and wireless headphones. The company also develops its own
operating system known as the IOS which the products are run on. With regards to services, Apple allows
customers to purchase and download or stream music and TV shows, rent or purchase movies and download free
podcasts. Also, the company Apple owns a cashless payment service known as Apple Pay which is available in
certain countries. Apple pay offers an easy, secure and private way to pay. In addition, Apple Care is another
service provided by the company. This is a fee-based service to provide users with technical assistance and repairs.
Apple’s product and services are unique, allowing the company to dominate the market. Consistent product and
technology development is another reason why the company is successful.
Pricing Strategy
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As discussed in the product part, Apple has very innovative products which delights their customers. Naturally,
when they are superior to their competitors, most of their products have premium pricing. The Macbook, Ipad,
Iphone, Iwatch are all premium products.One of the reasons for the premium pricing policy of Apple is the
technology used in its products. People swear that once you get used to a MacBook, you won’t go for any other
type of laptop. Same is said for Iphone and Ipad as well. Naturally, with such fan following, and with the brand
value that it has, Apple demands premium pricing for all its products. Regardless of how expensive Apple products
are, people are willing to buy them. Apple’s premium-pricing strategy generates higher profits for the company as
well as increases the brand's value. However, it is possible for Apple to generate higher revenues by manufacturing
cheaper versions of their products for low income consumers.
Place Strategy
1.Apple stores 2. Trade partners 3.Retail 4.Online 5. Store layouts 6. Helpful staff
Apple has a very smart retailing setup. It has around 450 stores within the US. And these retail outlets are such
that they are more focused in helping the customer and making him comfortable with using Apple rather than
selling the product and stuffing the product down customers’ throat. Apple has also introduced the Apple Genius
Bar, which is a walk-in service center. Overall, the company owned Retail and Service outlets are great.
Along with company owned stores, Apple has set trade partners like Ingram Micro and Redington which are
responsible for the sales and distribution of the brands. These trade partners will buy in bulk from the brand and
then distribute the product in the market. Thus, besides its own retail stores, Apple is found present in other
modern and premium retail stores. These stores are covered by its retail partners.
The Online E-commerce presence of Apple is fantastic. Most E-commerce portals promote the brand themselves
because they know that the brand is in huge demand. Besides this, there is very less price penetration in Apple,
and hence the channel partners and E-commerce portals are happy too as they don’t have to fight on price. The
combination of retail, distribution and E-commerce gives a complete market reach to Apple.
Promotion Strategy
Apple is known for its smart and elegant promotions. The major focus of the company is on its product and
differentiating the products from those of competitors. This is where the marketing communications derives its
inspiration from.
Take any ad of Apple, and you will find the ad speaks about the things that Apple is doing different from anyone
else. When we talk about the promotions there are some simple points
1. Elegant promotions – Apple has the habit of making promotions very very simple and top the point
2. Talking to the point – Another thing we can learn from apple is that their ads talk to the point.
3. Premium media – Apple ads will not come for some days and dissappear. Apple’s ads generally pop up
during a product launch, they show what their product can do, and then the print media keeps running.
4. Very few price based offers – Another smart technique used by Apple is that there are hardly any price
based offers by Apple. The one price based offer we have seen regularly is the discount for college
students. But other than that, you will not see frequent “Sale” sign boards on an Apple store.
Strengths
1. Innovative products – One of the key strengths of Apple over the years has been its innovative product
line up. Apple has presented hit products after hit products and that’s been the major strength of Apple.
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2. Leadership position – As per Wikipedia, Apple is the leading technology company in the world with
regards to revenue generated. It is also the second largest smart phone manufacturer
3. Brand equity – Naturally, being in the leadership position requires that your brand equity be high. The
brand Apple is the number 1 valued brand amongst all the companies in the world as of 2016. The brand value
in 2015 was estimated to be 118.9 Billion dollars!!
4. Design & Technology – The best part of Apple, and the reason for its fantastic brand equity is its design as
well as the technology it uses. Apple has always been suave and elegant in its product design. And at the same
time, beneath this exquisite design is a machine powered to give ultimate performance.
5. Distribution – Apple has 470 of its own stores across 17 countries. Besides these stores, it sells through
trade partners, online channels as well as through other premium retail stores.
6. Margins – One of the core advantages of Apple as a company is the margins that it commands over its
products. Being a technological leader with a top brand equity, Apple keeps a hefty margin for itself to invest
in R&D and brand building. Furthermore, its pricing strategy is such that the price does not break in the market
and you will always find Apple selling at the same price in various retail stores.
7. Consumer focus – Apple always designs its products with a focus on consumers while keeping their mind
in the future.
8. Robust production capabilities- Being the largest manufacturer of Smartphone in the world, the firm
suggests its powerful production capabilities. This is important in ensuring a balance in the demand and supply
of the product.
9. Strong focus on R&D- The active involvement in research and development can ensure that the firm
differentiates its product through innovation.
10. Quality- Apple products are made of quality materials in order to give users value for their money.
Moreover, Apple products are the only products in the market that cannot be attacked by viruses. The
operating system is built to be resistant to viruses.
11. Easy to use- One of the main reasons why people buy Apple products is that fact it is easy to use.
12. Brand Awareness- Apple is one of the most popular brands in the world. The company’s consistent
marketing and advertising is one of the reasons why the brand is known by many.
Weaknesses
1. Matching Customer expectations – Being a leading company since 1980’s Apple has a major market share
and the consumer expectation is going through the roof. People expect great things from apple year after year
and maintaining these expectation levels is not easy for anyone.
2. Incompatibility – A key issue in Apple as a company is that many of its products are incompatible with
third-party software / accessories. So overall, when you buy a product of Apple, you enter the Apple universe
and you have to continue with Apple only. That makes a huge impact on consumer decision making.
3. Dependency on few products – Apple has only 7-8 products in its portfolio in comparison to the various
products that its closest competitors Microsoft and Google have. Hence the dependency of Apple on each of
its products is very high. If one product fails, then that is a 10% loss to Apple. Hence, there is a common
demand from Apple to increase its product portfolio.
4. Price of products- Apple products a premium-priced which makes it difficult for low income consumers to
buy the company’s products.
5. Brand Reputation- Apple’s brand reputation has been negatively affected due to the news about the
unsafe working conditions in some factories in China.
Opportunities
1. Apple cars – Naturally, with Facebook expanding with Instagram, Occulus rift, Whatsapp and others and
Google expanding in 10 different ways, Apple wanted to find out some new products which Apple could
launch. Apple is now fixated on Apple Car which is supposed to be launched in 2020.
2. Technological advancement – In the technology industry, technological advancement is always an opportunity.
And the one brand we can expect to leverage technology to its best is Apple.
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3. The growing market – Apple is a growing company in a growing market. Equally important to the company is
the rising GDP of developing countries, thereby increasing consumption of such premium brands like Apple.
4. Iwatch and Apple TV – Two products which can increase the presence even further are the Iwatch and Apple
TV, both of which are aimed at the future, for when the digital presence increases. Apple Iwatch already has a
50% market share of Smart watches in US.
5. Accelerating demand for Smartphone- The economic explosion has resulted in increased income and hence
the change of consumer behavior. The demand for smartphones and personal computers increases year after
year because these devices have become an intrinsic part of people’s lifestyles. Everyone wants to be able to
communicate and have information at their fingertips.
6. Continued economic growth- The economy is expected to continue growing in the future and thus increased
incomes and job opportunities. These will enable new consumers to enter the Smartphone market and expand
the opportunities.
7. Economies of scale- Apple can take advantage of decreased product costs through economies of scale. Profits
from economies of scale can be used for research and development.
Threats
1. Market penetration in Smartphones – One of the key threats to Apple is the market penetration by other
brands in the Smartphone market. Android is eating market share like anything and currently has 47.5% of the
market share whereas Iphone is at 42% market share. Android is being used by Samsung, HTC, Lenovo and
practically everyone who wants to enter the smart phone market. Naturally Android being of Google (2nd
most valued brand), Apple has to be ready for Smartphone competition.
2. Laptop competition – MacBook is obviously the best there is. But so is Dell, and so is Sony and so is Lenovo.
The competition is ever-increasing in the laptop segments.
3. Internet Security regulations: The issue of cybercrime has led to major changes in security regulations.
Smartphone being one of the key contributors to this crime are particularly vulnerable to regulation changes.
4. Pricing Pressure: Apple products are expensive relative to its competitors’ products. Therefore, at some point
in time, Apple may be forced to cut down prices in order to stay competitive and survive in the market
Marketing Research
According to Philip W. Schiller, Apple's senior vice president of worldwide marketing, the company does not rely
on marketing research. During the Apple versus Samsung patent- infringement court proceedings, Philip Schiller
stated that, "We don't use customer surveys, focus groups, or typical things of that nature. That plays no role in
the creation of our products" [CITATION Jos12 \l 1033]. In addition, Lowensohn (2012) states that, “late Apple co-
founder Steve Jobs famously denounced market research, saying it's hard for customers to tell you what they want
when they have never seen anything remotely like it." Therefore, Apple relies on its innovative nature to satisfy its
users and not marketing research.
Keys to Success
In the electronics market, the key to success is to be innovative. Companies in this market must be able to design
products that meet market demand. Apple’s ability to compete successfully depends heavily on new product and
technology development, quality and well-thought-out designs. Moreover, in order for Apple to stay successful in
this market, it is essential for the company to enhance existing products and invest in research and development to
expand the range of its offerings.
Financials
This section explains the financial overview of Apple related to marketing activities. According to Apple’s 2018
Form 10-K, net sales increased 16% or $36.4 billion during 2018 compared to 2017, driven by higher net sales of
iPhone, Services and Other Products. Moreover, the company’s net sales increased year-over-year in each of the
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geographic reportable segments. In May 2018, Apple announced a new capital return program of $100 billion and
raised its quarterly dividend from $0.63 to $0.73 per share beginning in May 2018. During 2018, the Company
spent $73.1 billion to repurchase shares of its common stock and paid dividends and dividend equivalents of $13.7
billion (Apple, 2018).
Controls
The purpose of Apple’s marketing plan is to help guide the company in the right direction. The company must have
monthly meetings to discuss the progress of the company. Also, the following areas will be kept under systematic
review to track the company’s performance:
(1) Revenue (2) Expenses (3) Customer Satisfaction (4) New-product development
Implementation
In case of slow sales, the company can offer discounts to loyal customers
Increase the number of Apple stores, especially in Africa where there are only a few
Develop strong relationships with existing and potential customers to maintain or increase customer base
Provide better working conditions for employees in china.
Invest in Research and development in order to stay relevant in the market
Contingency Planning
Worst-Case Risks
Future operation depends on the Apple's ability to obtain sufficient quantities of the rare metals and other
components used in production
Growth of Apple’s own retail store could discourage third-parties from selling and promoting the company’s
product
Ethics of Apple
Ethics are the moral principles or value that generally govern the conduct of an individual or a group. A company
like Apple Inc. has strong moral values, principles, and standards for the business. The basic moral principles that
Apple employees follow in the business are as follows:
Apple Company expects total honesty and is perform in ethical behavior while making business dealings.
Apple expects its employees to avoid situations where a conflict of interest might occur or appear to occur. If
something really serious occurs then should react calmly.
Apple expects all the partners, employees to respect the confidentiality of Apple information not only people
in company, but also the customers.
Apple expects its employees, including parties whom Apple does business with worldwide to maintain the
highest standards of business conduct.
Apple expects and claims to deal all partnerships, dealing the same way, regardless to the social difference in
different countries.
Apple conducts its business so that the communities in which we operate are benefited by our presence.
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Social responsibility of Apple Inc. business is growing around the world. According to recent surveys and magazine
articles it can concluded that Apple is following all four components of Corporate Social Responsibility.
Economic Responsibility- Every corporation economic responsibility is to be profitable. Apple is first in its class
in this field. With revenues this year reaching almost double from last year (from 15.70 billion to 28.57 billion)
and Iphone 5 (143% growth sales) and Ipads (183% growth sales) sales exceeding over 100% show Apple as an
ideal example of a company fulfilling its economic responsibility.
Legal Responsibility- Apple has taken action against unethical conduct in its facilities. For this particular
responsibility, Apple has stopped the use of underage labor in ten facilities including Fox Conn.
Ethical Responsibility- Apple has eliminated dangerous working condition in two facilities and bribery in one
facility.
Voluntary Responsibility- Apple has done a tremendous job concerning environmental issues that range from
toxic material removal from its products to the recycling and the use greenhouse gas emission. Not only is
Apple exceeding the environmental impact of its products in a positive way. Apple Company has been always
actively involve with its social responsibility, its shows that not only is Apple an incredibly profitable
corporation but a socially responsible too.
‘Global Volunteer Program’ was launched in 2011 to encourage employees to volunteer in local communities.
In 2018 more than 250.000 hours volunteered and more than USD125 million donated to organizations
around the world within the scope of ‘Global Volunteer Program’
The company also responds to natural disasters. These include raising USD 1 million to help the victims of
Hurricane Maria and USD 2 million to help the victims of Hurricane Harvey and Hurricane Irma in Puerto Rico.
In China, Apple powers all of its offices and retail stores through solar panels mounted high off the ground, so
the grass can grow and local yaks can eat it.
Apple provided educational programs to more than 3.6 million supplier employees since 2008.
Under the leadership of Denise Young Smith, as Apple’s vice president for HR, Apple has expanded its
employee benefits programs to a considerable extent.
68% of people attending App Development and Swift course in 2018 had no coding experience. After the
completion of the course they were able to build an app.
Company has achieved an average 95per cent compliance among suppliers to maximum 60-hour workweek
Apple enforces The Supplier Code of Conduct that is claimed to be the toughest in the electronics industry.
Apple educated more than 17, 3 million employees of its suppliers on their rights since 2007.
In 2018, Apple removed five mineral suppliers from is supply chain for failing to pass or not being willing to
participate in human rights audits.
The company has launched Apple Supplier EHS Academy, an 18-month program that aims to improve
employee health and safety in the industry throughout the globe.
Research has been conducted in Apple’s ergonomics department on about 75 jobs within supply chain to
identify ergonomic risks.
The multinational technology company has launched a group of health clinics called AC Wellness for its
employees and their families.
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Apple and Gender Equality and Minorities
Tim Cook is the only openly gay CEO of a Fortune 500 company and he has been praised as a strong champion
of workforce diversity
The company reached equal pay to employees in 2016
36% of all employees under 30, 29% of leaders and 39% of leaders under 30 are women at Apple
50% of new hires in 2018 were from historically underrepresented groups in tech such as women, Black,
Hispanic, Native American, and Native Hawaiian & Other Pacific Islander.
Apple is often praised for its environmental records that include decrease of total power consumption of
Apple products by 57%, introduction of Mac mini as the world’s most energy-efficient desktop computer and
exceeding ENERGY STAR guidelines.
Apple emerges as the only company that has been awarded with a Clean Energy Index of 100%, according to
Greenpeace’s Clicking Clean Report.
The company is currently powers 100% of its operations globally with 10% renewable energy
The multinational technology company has committed to bring 4 gigawatts of renewable power online by
2020
Supplier Clean Energy program has motivated 23 manufacturers to power all of their Apple operations with
100% renewable energy. The company is aiming to achieve 4 gig watts of new clean energy online in its supply
chain by 2020.
In 2017, Apple used about 1 billion gallons of water directly, a 59 percent increase compared to 2016
The company launched Clean Water Program in 2013 and since more than 13,6 billion gallons of water have
been saved by suppliers
Cooling systems in company’s date centres can reuse water up to 35 times
Despite the initiatives above, water usage by Apple data centres, retail and corporate facilities have been
consistently increasing over the last four years.
Apple Park, a campus in Cupertino uses 75% recycled non-potable water. Apple campus in Austin, Texas,
irrigates its drought-tolerant plants using a 600,000-gallon rainwater cistern.
Apple offers recycling programs in 99 percent of the countries it operates and the company has diverted more
than 508 million pounds of electronic waste from landfills since 2008.
In 2016 the company introduced Liam, a line of robots that can disassemble an iPhone every 11 seconds and
sort its high-quality components so they can be recycled,
In 2017, U.S. product packaging used on average 29% less plastic compared to the previous year
In 2017, the multinational technology company’s 22 supplier facilities were certified as Zero Waste, including
all iPhone final assembly sites.
Apple reduced its overall carbon footprint from 29.5 million metric tons in 2016 to 27.5 million metric tons in
2017. As it is illustrated in Figure 2 below, the company’s renewable energy program made a massive
contribution to reduce the volume of CO2 emissions to a significant extent.
The company offers employees more than 550 electric vehicle charging ports for free, an increase of 67
percent compared to the previous year to encourage the usage of electric vehicles
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Apple and Sustainable Sourcing
All the fibers Apple uses in product packaging are 100% responsible sourced
The company partnered with The Conservation Fund to protect 36,000 acres of sustainable forest in North
Carolina and Maine and more than 13,000 metric tons of wood was harvested responsibly.
Apple aims to contribute to transition up to 1 million acres of forest, across five southern provinces, into
responsible management by 2020
In 2017 Apple trained more than 3 million supplier employees on their rights, including local labour laws, and
Apple’s Supplier Code of Conduct
The multinational technology company has launched a health program that aims to empower female
employees to improve their health awareness. The program aims to train 1 million supplier female employees
by 2020.
In 2017, the company returned US USD1.9M in excessive recruitment fees to 1558 people affected by bonded
labour by suppliers
The success of Apple is partly as a result of its ability to offer satisfaction to stakeholders alongside corporate social
responsibilities (CSR). The company is committed to making its working environment and its surrounding friendly.
This is evidenced by its various CSR initiatives including supporting local communities, training, and development of
employees, embracing gender equality, waste reduction, and enhancing employee health. The CSR initiatives have
promoted the organization through improving its brand image, attracting capital inflow, and minimizing the
hostility of the authorities in regions where it has set up its operations.
Despite the efforts the company has deployed towards CSR, it needs to make some improvements in its strategies.
To begin with, the company requires being innovative alongside having an inspiring vision. It should leverage the
current technology such as social media to offer encouragement to the users to be involved in the brand initiatives.
Further, the company should also implement a crowdsourcing initiative as a way of promoting its CSR efforts. Such
a platform will enable the users and the company to work together in improving the society. Moreover, Apple
needs to improve its transparency. The organization should be honest by offering information in a manner that the
involved stakeholders can attain an appropriate insight of the aspects they think are relevant. Further,
transparency will also enable the involved stakeholders to cooperate with the company, thereby enhancing Apple's
efforts towards CSR activities. Finally, Apple should always listen and learn from the current occurrences. For the
brand to achieve effectiveness in CSR initiatives, it should regularly listen and monitor the wants of the
communities surrounding its business. As such, it will be able to determine the most appropriate strategy for
addressing their social requirements. Further, the firm should do thorough research on the best ways of
implementing a given CSR strategy at a given place. This is because regions have varying social demands.
Apple’s in depth marketing analysis concludes that it engages itself in effective and attainable marketing strategies
which results in high customer satisfaction level and greater profit margins for the company. Apple has been
successful in creating a luxury and premium brand image by adopting just the right marketing mix strategies and
policies. One of the major reasons which make users reluctant to buy the Apple products, in general, is the strategy
of keeping their technology closed and intact, and not allowing the developers to explore the horizons to the next
level. If Apple can stretch the iPhone product line in both ways, such as releasing the device with lower prices with
the process optimization and increased efficiency as well as coming up with the new models in the upper segment
of the product range to target the corporates and professionals, then it will ensure that the company grows in
terms of user base and revenues. If the company can perform with the striking new technology, high class design
and stability, company has a bright future in coming years. With its remarkable marketing strategy going in hand
with the powerful innovation and pioneering technology, there are lot of opportunities and market segments, in
which Apple can penetrate and secure the pole-position.
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