Strategy refers to the formulation of a well-defined plan of action that does dictate the direction that an organization will take to achieve its set objectives. Strategic management is an adaptable process that alternates with changes in the business environment. The changes in the business environment often affect the short term strategies that the organization has set in place. In order to comprehend the concept of strategy the Rumeit’s 4 criteria is often applied by organizations that want to achieve a competitive advantage in a particular industry of operations. They are consistency, consonance, feasibility, and advantage (Eden and Ackerman, 2013, p. 5). All the above will be clearly evaluated when discussing the strategies adopted by Apple Incorporation and Nokia.
The founders of Apple Incorporation ingrained the concept of innovation within the company. Steve Jobs and Steve Wozniak believed in using the present resources to create technology that was easier for the end user to use. The Macintosh was created at a time when the concept of personal computers had not permeated the technological market. Apple Company introduced the concept of personal computers that could be used in people’s homes bringing technology closer to people (Glazer, 2016).
The consistency in creating innovative products is what leads the company to venture into the creation of the iPod. The advent of the internet meant that people could access music online with ease but the iPod brought a new concept to the music lovers. The device was portable and allowed one to consolidate their favourite playlist in one device. When the iPod was introduced into the market the company recorded tremendous profits from its sales (Glazer, 2016).
Apple Company’s management does comprehend the importance of incorporating consonance in their strategic plans. Consonance is term that deals with studying the trends in the market and incorporating them in their products. In other words it refers to creating products that the customers never knew they needed and ones which competitors will take time to replicate. Apple Company ventured in the creation of the iPhone at a time when the market was competitive.
The company had evaluated the phones in the market and noticed that they were not user friendly. The creative team ventured in the creation of a phone that users could easily navigate with one touch. The iPhone had a glass that prevented it from breaking when the phone fell which was quite new compared to the smartphones that were present in the market. In addition the phones were designed with a large storage capacity that enabled their users to store all their information. The company studied the trends in the market with respect to the creation of smartphones and created a product that appealed to the end user (Payne, 2017).
Apple Company based on the case study is a feasible company who uses the resources at their disposal to solve the challenges in the industry. A successful organization is a company that does uses their limited resources effectively to achieve their set objectives. Steve Job and Steve Wozniak began the company in a garage where they invested their savings in the creation of the first Macintosh. The company began in a garage and has grown to become one of the largest corporations in the telecommunication and electronics market (Glazer, 2016). What strategy did the founders adopt?
The answer is simple Steve Jobs believed in incorporating simplicity in the creative process. When creating a product the main thing was to use what one has to formulate a product that they will love. The company has gone through a tremendous evolution as discussed in the case study. Apple company started with the creation of personal computers the Macintosh, they later ventured into the creation of software, PowerBooks, desktop publishing programme, consumer electronics and last but not least the smartphones. The company has impacted different industries with their innovative products which are telecommunication, software development, consumer electronics, and sports industry with the creation of the smart watch among other industry (Greenwald, 2014).
The last element in the Rumeit’s scale deals with advantage which involves the creation of a competitive advantage in the market. Competitive advantage in the business industry is an aspect that has made most business invest a lot of resources in research and development. Competitive advantage takes different forms and it does ensure the continuity of the organization and its success in a particular industry. Competitive advantage can be on the basis of reputation, innovative products, quality, and corporate social responsibility among others (Eden and Ackerman, 2013, p. 28).
Apple does operate on the quality aspect to market their products in different countries in the globe. The company’s products are high priced and they are only sold by selected dealers that the company has selected. The reason for doing this is to guarantee the customer that the product is original and of a high quality. The company has identified its target market as the high class individuals and for many years has been creating products that will satisfy their tastes. The aspect is what has resulted in the high prices in their products (Mana, 2013). In other words, when one does purchase an Apple product they are not only buying into functionality but also into class.
Apple Company has managed to use this competitive advantage to their advantage in every single product they launch in the market. Their marketing strategies are geared towards creating a deep desire for the customer to purchase their products. The marketing and advertising is often done before the launch of the product to create frenzy in the market. The frenzy created often does stimulate the sales of the company ones the product is launched into the market. The company has also developed an intensive distribution channel that ensures that their customers around the globe are able to access the product ones it is launched (Mana, 2013).
Nokia was a giant in the technological industry but it was unable to hold on to that position due to poor strategy review, evaluation. According to Vuori and Huy (2016), the company failed to incorporate the aspect of consonance in their research and development. In other words, Nokia did not understand that the consumer market was changing rapidly and customers needed smartphones. The company failed to read the writing on the wall and when they ventured into the creation of the smartphones it was quite too late for them to regain their position in the industry.
Furthermore, the technological industry is a rapidly changing industry as indicated by the Apple incorporation product diversification. Concentration on one aspect places a company in precarious situations when the interest of the customers changes from the products that the company is manufacturing. Nokia Company failed to incorporate the aspect of flexibility in their management and product creation system. Nokia was unable to create software rapidly to rival that of their competitors hence creating an opening for new entrants like Apple Incorporation to outwit them (Birkinshaw, 2013, p.66)
The management in Nokia had underestimated the potential of Apple Incorporation when it ventured into the creation of communication devices. When Apple Incorporation introduced the iPhone the management down played the innovation based on the market share they controlled in the industry (Surowiecki, 2013). The competitive advantage that the company controlled in the industry made them unable to notice the changes taking place in the external environment. Customers wanted smartphones that were easier to use, allowed them to access the internet, had impressive features and had sufficient storage space.
The iPhone created by Apple incorporation was more than a communication device unlike the one that Nokia had in the market. Furthermore, the company was unable to transition their communication devices to be suitable for their target market. The company noticed their mistake and tried to match the products offered by their competitors in the industry but it was too late. In the end the telecommunication giant was sold to Microsoft Corporation on 13 September 2013 (Surowiecki, 2013)
In business once you are still in the game it is never too late to make a comeback. This concept is what the Nokia management never fully understood. The management could have halted their production and concentrated on the creation of innovative smartphones by studying what was present in the market. They had an upper advantage since they had sample models to work in to create a new innovative smartphones that will capitalize on the weakness of the models present in the market (McQueen, 2014).
Nokia Company could have relocated to a country where the competition was less intensive hand launch their smartphones. A less competitive country would have provided the company with an opportunity to stabilize after the decrease in their profits. The company should have worked towards re-engineering the systems that were out-dated to ensure that they were able to compete with the new companies in the market. Finally, the company should have partnered up with other organizations in the industry to help them continue their operations (Anthony, 2013).
In conclusion, strategy is paramount for any organization that needs to penetrate any industry in business. Strategy implementation, review, evaluation and control determine the direction that the organization will take in the long run.
Reference List
Anthony,S. 2013. The real lessons from the fates of blackberry and Nokia. Online<https://www.bloomberg.com/news/articles/2013-10-08/the-real-lessons-from-fates-of-blackberry-and-nokia> [accessed 8th April, 2017]
Birkinshaw, J., 2013. Why corporate giants fail to change
Eden, C. and Ackerman, F., 2013. Making strategy : The journey of strategic management. Sage
Glazer. J.2016. 40 years of Apple: A look back at Apple product evolution. Online< https://www.nbcsandiego.com/news.national-international/Apple-Products-Through-the-Years-374151161.html> [accessed on 8th April, 2017]
Greenwald. M. 2014. 20 Ways Apple Masters Customer Touchpoint and Why It’s Great for Business. Online< https://www.forbes.com/sites/michellegreenwald/2014/05/21/20-ways-apple-masters-customers-touchpoints-why-its-great-for-business/> [accessed on 8th April, 2017]
Jawabra, Z. 2015. Nokia CEO ended his speech saying this,” we didn’t do anything wrong, but somehow, we lost.” LinkedIn Pulse.
Mana, H. 2013. Critical analysis of using the marketing strategies of branding Apple Inc (Undergraduate). University of Wales.
Marcus, P. (2014). Four things Apple’s PR strategy can teach us – Harvard Public Relations. Harvard Public Relations. Online <https://www.harvard.co.uk/2014/09/four-things-apples-pr-strategy-can-teach-us/> [accessed on 8th April, 201]
McQueen. M. 2014. With Nokia’s name set to disappear, here’s 5 things it should have done differently. Online< https://www.afr.com/technology/with-nokia-set-to-disappear-heres-5-things-it-should-have-done-differently-20140506-jy9op> [accessed on 8th April, 2017]
Payne, B., 2017. Brand Positioning and its Usefulness for Brand Management: the case of Apple Inc. The University of Newcastle Student Business Journal, 1(1), pp.51-57
Surowiecki, J. (2013). Where Nokia went wrong. The New Yorker. Online <https://www.newyorker.com/business/currency/where-nokia-went-wrong> [accessed on 8th April, 2017]
Vuori, T. O. and Huy, Q.N., 2016. Distibuted attention and shared emotions in the innovation process: How Nokia lost the smartphone battle. Administrative Science Quarterly, 61(1), pp 9-51
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