Describe about Analysing the Organisational Environment: Corporate Strategy?
This report is aimed at performing an analysis of a company that has achieved superior level of success in its performance in the past few years. In order to analyse the company, the specific company that has been selected is Apple Inc which has been a US based Multinational Corporation in the electronics industry. Apple Inc is operating at the international level and the company primarily deals in large range of electronic products such as computers, iPads, iPods, iPhones and many more. In order to analyse the performance of Apple Inc, this report is focused towards performing a critical assessment of the strategies that have been adopted by the company in achieving higher growth. An analysis of the financial performance of Apple would also be performed including the competitive positioning strategy as applied by the company. In analysing the company’s performance, there will be the application of strategic models that would be carried out relevant to assessing its superior performance (Roland and Shiman, 2002) and finally, the strategy in sustaining its superior performance will be assessed. Based on the entire analysis, the findings will be summarised in the conclusion section of this report.
As analysed above, Apple Inc is a US based corporation that deals in electronic products that are highly innovative in nature. The company sells its products all across the world, and the most popular ones as includes within its product portfolio are laptops, iPhones, iPods, Ipad etc. However, for the purpose of analysis in this report, the specific segment that has been selected is iPhones which is mainly a type of smart phone offered by the company. The performance of Apple in relation to iPhone over the past few years would be assessed as a part of strategic analysis. An analysis of iPhone in particular indicates that it is a smart phone offered by Apple Inc, and it was first launched in June 29, 2007. After the launch of initial iPhone in 2007, the company has performed the launch of a series of iPhones and the most recent launch of its iPhone is iPhone 6. The company has achieved significant level of success with its iPhone 6 as this smart phone has enabled Apple in outperforming its competitors in a positive way.
There are various such theories and principles of strategic management that could be applied in assessing different important areas of an organisation’s performance. As for instance, in analysing the competitive positioning, an important strategic management tool is Porter Generic Strategy. As per this strategic tool, there can be the selection of a specific strategic position by the company from three different alternatives such as cost, differentiation or focus. However, a company can select only one strategic choice which could allow it in achieving higher level of growth and success in its performance. It could be either cost oriented, or focus oriented or differentiation. By focusing on a specific strategy, it could be possible to achieve higher success levels (Eldring, 2009). Apart from analysing competitive position, the assessment of the financial performance of a company can be possible through applying trend analysis which explains the upward or downward trend in respect to the company’s performance. The value creation ability of a company can be assessed through the application of strategic analytical tool such as strategic resources management. The strategic resources management indicates the resources that are available to an organisation which allows them in achieving higher level of effectiveness (Ferrell and Hartline, 2010).
In respect to iPhones, Apple has been successful in achieving superior performance as compared to its competitors. The strategic analysis of Apple iPhones indicate that the company has been successful in introducing a series of iPhones and the most important thing is that Apple has been successful in bringing new innovation in each and every devices that it introduced in the market. Apple iPhone 6 in particular is an upgrade version of iPhone and it includes the application of most innovative and latest processor and operating system iOS 8. The company aims to offer something new within its iPhones so that it is attractive to users, and the iPhone 6 is also comprised of large number of such features that makes people to buy. The superior performance of the company in respect to its latest iPhone is evident from the fact that there are more than 73 million iPhones that are sold in last quarter which has been a significant achievement to the company (Smith, 2015). The definition of strategic success is higher recognition of the firm’s product in the market and huge growth and development opportunity to such firms selling such product. An analysis of the superiority in the performance of Apple through various important measures is performed as follows:
Competitive Positioning: The superiority in the performance of Apple iPhone 6 is evident from the competitive positioning of its phones as made by the company. Apple is already known as the most innovative company that provides high quality and innovative products to its customers. iPhone 6 and iPhone 6 plus as offered by the company are competitively positioned as the most significant phone in the smart phone segment whereby Apple offers its latest operating system iOS 8, and it also claims that the battery performance with its new iPhone is also highly efficient. The operating system as used by Apple has been highly competitive with Android operating system, and it was positioned as the superior phone in the market (Burrows, 2014). The positioning of iPhone 6 is done by the company as the most innovative iPhone and this has brought significant success to the company in terms of 73 millions units of iPhone sold in a quarter. The innovative focus of the company to offer something new has proved to be excellent to it in achieving success. There are various important areas that are paid attention by the company in its new iPhone 6 including the screen size, battery life, latest operating system, inclusion of new features such as Near Field Communication (NFC) and many more. The complete package of competitiveness is offered by the company in its single device and this has been the reason that 73 million units are already sold by the company in a quarter (Leather, 2014).
The competitive positioning of Apple can be described by way of Porter generic competitive advantage model. An analysis of Apple indicates that the strategic choice of the company can be best described as differentiation strategy whereby Apple aims at achieving competence through its differentiating features such as its unique operating system, its premium quality products and many more. The company has utilised a differentiating strategy in order to target its customers and this has proved to be highly successful as evident from the increasing level of demands as faced by it (Kelly and Booth, 2004).
Financial Performance: iPhone was initially launched by the company in 2007 and this is followed by the launch of series of iPhones. These innovative products as offered by the company have increased its sales and ultimately the profitability performance to a greater level. In order to analyse its financial performance, the revenue generation of the company including its profitability performance for the last five years is indicated in the table below:
|
2010 |
2011 |
2012 |
2013 |
2014 |
|
|
Revenue |
65225 |
108249 |
156508 |
170910 |
182795 |
|
Net Profit |
14013 |
25922 |
41733 |
37037 |
39510 |
An analysis of the financial performance of Apple Inc over the five years in the above table shows that there has been a rising trend being witnessed with respect to the revenue earned by the company over the years, and also the profitability performance that has been achieved by the company. The growth in the revenue and the profitability of the company is an indicator of the fact that the company is doing well over the years. However, the entire growth and development cannot be attributed to the iPhones as launched by the company over the years because there are various other products that contribute positively towards higher growth and development. But the overall profitability performance as revealed by the table above shows that Apple Inc has been significant in terms of gaining good market share in the industry, and this is positively because of the innovative offerings as made by the company. The trend analysis also showed positive level of performance in respect to Apple Inc.
Value Creation: Being a most innovative company, it is likely that the products as offered by Apple Inc are aimed at creating value for its customers. In respect to Apple iPhone 6, it is known as the value creating device by the company because the features in-built within it are aimed at providing some thing new to its customers (Kossowski, 2003). The value as received by customers is mainly in the sense that they get good impression from their friends and colleagues because Apple brand is associated with a premium class brand. The prices of iPhone 6 are set at relatively higher as compared to other smart phones offering similar nature of products. Apart from this, the value creation ability of iPhone 6 is also evident in the US markets whereby the huge demand for the company’s product has resulted into its selling in the gray market. The brand is being associated with high personality and this is the reason for which people pay premium prices for its products (Dransfield, 2001).
The value creation process of Apple Inc can be better evaluated through the application of strategic resources analytical tool. The strategic resources lists down the important resources that are available to the company, and in respect to Apple Inc, it has been analysed that there are wide range of resources available with the company. These include the brand name of highly innovative company, highly talented and innovative IT staff that accounts for performing innovation, huge R&D department that accounts for performing innovative practices and resources in the form of technical experts that can revolutionise the performance of the entire company. These are the major resources that allow Apple in creating value for its customers, and because of these resources, Apple has been successful in introducing newer and innovative products to its customers and iPhone 6 is the result of such innovation by the company (Haberberg and Rieple, 2008).
Conclusion and Recommendations
A critical analysis of Apple Inc that has been successful in achieving superior performance in the last few years is performed and the performance of analysis revealed that the company has specific competencies that allow it in achieving improved level of performance. The ability of the company to innovate and provide something new to its customers along with its highly reputed brand name has all contributed in a positive way towards improved level of performance of its iPhone 6. It has been evaluated that the company has adopted differentiation strategy in its operation, and the financial performance of Apple also looked highly efficient as revealed by trend analysis. The evaluation of Apple’s performance also indicated that the company has been successful in creating values for its customers by offering high quality products and services to its customers.
Recommendations: Although Apple has been successful in achieving highly improved level of performance, yet in order to sustain its performance, there are certain important recommendations considered essential in sustaining its performance. These are indicated below:
The company should continue to innovate its processes and should try to offer newer products to its customers. For example, an improved version of iPhone with unique feature and capabilities (Angwin, Cummings and Smith, 2006).
The customers of Apple iPhone are mostly attracted because of the ability of the company in offering something new and unique. As a result, the extensive level of R&D should be carried out to offer something new to its customers (Allen, 2013).
The human resources are crucial to performing innovation and it is therefore essential that the company should aim at retaining its highly talented employees which would contribute in a positive manner towards innovation and thereby allows organisation in sustaining its core competitiveness (Dransfield, 2001).
References
Allen, M. 2013. Analysing the Organisational Environment. Select Knowledge Limited.
Angwin, D., Cummings, S. and Smith, C. 2006. The strategy pathfinder: core concepts and micro-cases. Wiley-Blackwell.
Burrows, P. 2014. 6 Reasons Samsung Should Fear the iPhone 6 [Online]. Available at: https://www.bloomberg.com/news/2014-09-02/6-reasons-samsung-should-fear-the-iphone-6.html [Accessed: 25 March 2015].
Dransfield, R. 2001. Corporate Strategy. Heinemann.
Eldring, J. 2009. Porter’s Generic Strategies, Performance and Risk. Diplomica Verlag.
Ferrell, O.C. and Hartline, M. 2010. Marketing Strategy. 5th Ed. Cengage Learning.
Haberberg, A. and Rieple, A. 2008. Strategic Management: Theory and Application. Oxford University Press.
Kelly, L., and Booth, C. 2004. Dictionary of Strategy: Strategic Management A-Z. SAGE Publications.
Kossowski, A. 2003. Strategic Management: Porter’s Model for Generic Competitive Strategies-Theory and Analysis. GRIN Verlag.
Leather, A. 2014. The iPhone 6: Has Apple Done Enough To Beat The Androids? [Online]. Available at: https://www.forbes.com/sites/antonyleather/2014/09/23/the-iphone-6-has-apple-done-enough-to-beat-the-androids/ [Accessed: 25 March 2015].
Roland, A. and Shiman, P. 2002. Strategic Computing: DARPA and the Quest for Machine Intelligence, 1983-1993. MIT Press.
Smith, C. 2015. Apple may have sold a mind-blowing 73 million iPhones in last quarter [Online]. Available at: https://bgr.com/2015/01/26/iphone-6-vs-iphone-6-plus-vs-iphone-5s-sales/ [Accessed: 25 March 2015].
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