What is the main purpose of The main purpose of the assignment.
The main purpose of the assignment is to conduct strategic management analysis on Apple Inc. Apple Inc. is one of the technology companies that designs, produces as well as sell goods of Mobile phone industries and Computer. Apple Inc. is differentiating by its product brand-perception as well as identification. From the last couple of years, Apple considers as cult-brand thank iLife, QuickTime and iMac Lines. This particular company has short-term goals as well as increased sales for launching iPad. Apple mainly aims at reaching the number one leader in the upcoming financial year.
Apple Inc. has included wide variety of features that are exclusive as well as well-known in the recent world. It is considered that Apple Inc Products has several appealing features like iMac, iPhone as well as iPad. Apple products represents revolutionary era for reaching next developmental era for technology advancement. Apple Inc. was successful in attracting potential customers in given way or other. High advanced technology, sense of luxury as well as simplicity and design as the main features of Apple Inc products. Apple products provide comfort as well as convenience to the potential customer base. The selected company for this assignment is Apple Inc because it is unique, simple as well as comfortable picture. Apple has successfully shaped its marketplace over existence. Apple motto is “Think Differently”.
This study deals with strategic management of Apple Inc with relevant facts from recent market scenario. Apple Inc is an American international association that is situated at California in the middle of Silicon Valley (Apple 2016). Apple Inc. focuses on conniving as well as developing personal computer and other related software goods and electronic goods like MP3 players and iPods. Main products of Apple Inc. are iMac, iPhone as well as iPod and other latest advanced products. This particular company was founded in the year 1976 and leading the way for innovation of new products and encountered difficulties at the same time. Apple Inc. produces first ever-successful individual processor (Ward and Peppard 2016). Apple has been forefront for innovating new products as well as struggled hard in maintaining hold on marketplace share in manufactured goods line. At later stage, Apple Inc. transformed its picture from creative mainframe manufacturer to full-fledged consumer electronic company. Some financial facts of Apple Company are sales at $13.95 billion in the year 2005. Apple iPods model controls over 70% of hard drive in the MP3 player market (Apple 2016). This particular company enjoy principal market divide up especially in phone marketplace. Apple Inc. unveils its first phone on 9th of January 2007.
Mission
Apple plan Macs is the excellent personal computer in the planet down with other OS X, iWork as well as iLife and expert software. Apple occupies the topmost position in the digital music rebellion by means of iPods and iTunes online stockpile (Rothaermel 2015).
“Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them”.
Apples live this idea with the advancement of technology as it develops customers as well as business. It mainly struggle innovative ways for making customers masters of the product at the time of purchase Apple does not believe in simply making vision statement. Rather, it lives by ensure its workers for understanding the idea as well as strives best in reaching at the same time (Rosenbaum-Elliott et al. 2015). It place system in position for enabling soft client communication. Apple has place objectives for moving forward inside continuous form in making better financial as well as operational structures in applied strategies.
Apple values include qualities, standards as well as customs and other principles for success of employees in an organization (Apple 2016). Some of the values governing Apple business conduct are as follows:
Innovation or Vision
Positive Social Contribution
Aggressiveness or Achievement
Empathy for customers or users
Individual Reward
Team Spirit
Individual Performance
Good Management
Quality or Excellence
On critical analysis, it is noticed that Apple Inc has positive relationship between strategic statement and its functional objectives in the most appropriate way.
“Political Factors”
As affirmed by Morschett, Schramm-Klein and Zentes (2015), Apple Inc. obtains 52% of its commerce exterior US in the year 2007. Apple Inc. faced problems due to bad international relations and lead to wars as well as terrorism largely. Apple Inc. produces wide variety of part and goods outside US like Ireland, Korea as well as Czech Republic and Cork. Due to bad following relation between US and additional world, it leads to terrible outcome for Apple Inc.
“Economic Factors”
According to Lee (2016), worldwide financial crisis has enormous impact in the operations of Apple Inc. Inflation rates are high and there is rise of unemployment. Apple Inc. products falls under luxury products as well as customers started spending less on them. There were continuous fluctuations in US Dollar prices and leads to bad impact on Apple Inc. products. Therefore, Apple Inc. had to purchase itself foreign currencies as well as economic effects on company were minimized largely. At the end, revenue of Apple Inc. increased largely in the global market.
Social Factors
Apple Inc. has major two factors like quality as well as designs of the products. Globalization plays major role in favor of Apple products. It was hard for the world to imagine life without gadgets (Lasserre 2012). Therefore, Apple products marked huge presence especially in international market. Purchasing power of individuals rises in certain markets in and across the world in case of luxury products like iPhone, iPad and iPods.
“Technological Factors”
Apple Inc. invests mainly in manufactured goods explore as well as developmental field. Apple products are given highest priority and have innovative products ranking. With the advancement of technology, markets are becoming more gigantic for added competition and direct technological change at the same time (Ketchen, Ireland and Baker 2013). It concerns directly with product life cycle and takes advantage in introducing newer products in global markets.
Legal Factors
Nokia has file lawsuits alongside Apple Inc. They claimed breach of 13 extra; patent like iPhone, iPad and iPod handle. In China, Apple Inc, fights huge battle intended for getting its rights to iPad brand.
Apple Inc. competitors include companies like Dell, HP as well as Toshiba and Sony. One of the threats involves customers who start downloading music free of charge in its place of purchase at iTunes. Merchandise expensiveness considers as risk to products and acts for substitute at lower prices (Apple 2016). Long permanent depression proves to be threat to goods. Windows 7 software gains more marketplace presence following vista flop. Technology is change every single day and this proves major threat to Apple Inc.
Opportunities affect present and future condition of a particular business organization. Apple Inc. opportunities introduce additional PC virus on which Apple Inc capitalizes lying on certain way. Other opening of Apple Inc. has grown at rapid pace as well as open front for new markets and purchase authority of common person. Online sales of an organization are increasing as well as rise in past few years (Hubbard, Rice and Galvin 2014). Products like iPhone aims at creating fresh set of probable clientele and targets youthful people who are crazy for fresh knowledge widget.
Apple has unique capabilities in gaining competitive advantage for having threshold capabilities. Unique resources are those resources that are critically underpinning completive advantage over other in imitating other products (Hitt, Ireland and Hoskisson 2012). Core competencies are those activities as well as process through which resources deployed in achieving competitive advantage for future analysis purpose.
“Porter Five force Model” is one of the influential tools that appreciate the core of authority in commerce and corporation.
Figure: Porter’s five-force model
(Source: Created by Author)
“Bargaining power of suppliers”
Apple Inc. has few suppliers who have the benefit to use their benefits. This particular company has pressure from music labels in case of increase costs. Apple Inc. has high cash reserves as well as lock in suppliers.
“Bargaining power of buyers”
In case of Apple fanatics, Apple Inc. has low bargaining power. General buyers of Apple Inc. have high bargaining power.
“Threat of substitute products”
Apple Inc. has high threat from substitute products. E-book readers include kindle, Nook as well as Fire. There is group of alternate model all through the handset like PC, Tablet Industry. Substitutes inside Apple’s goods variety from making choice of the customers difficult as far as possible
“Threat of new entrants”
In this case, new entrants threats includes manufacturers of phones like Pc and existing competitors in developing new products to match Apple.
Rivalry amongst sellers
Apple Inc. faces very high rivalry amongst sellers. Apple is in multiple industries with multiple competitors as well as has fierce battle.
Internal Analysis Strategic Capabilities
“VRIO Framework of Apple Inc”
|
“Resources and Competencies” |
“Value” |
“Rarity” |
“Imitability” |
“Organization” |
“Competitive Advantage” |
|
Simplicity |
Yes |
No |
Yes |
Yes |
Parity |
|
Software |
Yes |
No |
No |
No |
Parity |
|
Brand Name |
Yes |
Yes |
Yes |
Yes |
Sustained |
|
Hardware |
Yes |
No |
No |
Yes |
Temporary |
Unique design capability
Apple came with exclusive user line design in way of bearing in mind screen, touch pad as well as series and other improved functionality in goods. Apple exceptional plan includes products like iPod, iMac as well as iPhone.
Innovation capability
Apple mainly focuses on competitive strategy in terms of innovation activities due to competitive pressure. It mainly combines technological knowledge with new idea for selling online music at the same time. Apple came out with revolutionary iPod music player as well as iTunes in the entire music industry. Apple aims at continuing with designing of innovative products like easy for using desktop computers. Addition to that, it includes products like iPhone and iPad for maintaining reputation with customers.
Apple invests little time for research as well as development in comparison with other competitors. Apple spends around 3.7 percent of its total revenue on research and developmental activities (Harrison and John 2013). Founder and CEO of Apple named, as Steve Job does not believe that innovation has anything to do with spending lot of money in research and development. It mainly depends upon the knowledge of people working for the business organization. He believes that focusing on existing products as well as services considers as one of the core competitive strategy of Apple Inc. Innovation of new product design evolves with exceptional elegant easy for using in case of customer experience.
Apple Inc is taking 93% of the profits in Smartphone industry in the recent world. Apple Inc. is the only company that makes money from smart phones.
In each of the quarter, analysts look at the profit state of smart phone companies. Apple records 93% of industry profits. Apple is the leader in the smart phone industry in comparison with its competitors. Apple sold more than 74.5 million iPhones in the last quarter. It generates $12.6 to $13.5 billion profits (Dobbin and Baum 2014).
Apple has strong brand name as well as highly recognized in the individual computer industry and consumer electronic industry. This particular company product strategy is to create innovative product design as well as connection with existing customer base. Apple brand personality focus mainly on simplicity as well as removal of complexity from lives of people. It gives rise to people driven products for high quality services. Popular innovative creation of Apple includes iMac, iPod, and OS X operating system.
Figure: Smartphone brands for the year 2011 and 2012 sales
(Source: Carroll, Primo and Richter 2016)
Apple brand value arrives at $21143 billion in the year 2010 and fastest growing in and around the world. This particular brand considers as symbol for technological modernity as well as uses for competing with high competitive market (Barney and Hesterly 2015). Apple Inc. has powerful brand image considers as unique competence for gaining competitive advantage by gaining customer loyalty.
Penetration comes under matrix for existing products in existing market. In this matrix, Apple Inc. sells more Apple products to existing customer base. Attracting clientele from competitors with innovative as well as better features at inferior prices and increased services
For instance,
iPhone- Apple releases new as well as upgrade description of iPhone for each 12 months. New facilities comprise improved camera, better sharper screen as well as closer processor and faster internet connections.
Product Development comes under the matrix new products in existing market. Apple Inc. aims at rising new goods for clientele who are already loyal to the brand. This mainly entails added product expansion costs as well as eliminated cost of new customer’s acquisition at the same time.
For instance,
“iPod Shuffle”- Apple free iPod mix up especially for the accessible iPod clientele as an optional device intended for going anywhere. This product was designed because of small wearable as well as rugged for the times in place of fragile iPod or iPhone.
Market Development comes under the matrix with existing products in new market. Apple Inc. introduces existing products as well as services for complete original market or section. This includes new area as well as state and demographic collection.
For instance,
“iPod Touch”- This particular product is the replica of iPhone. iPod Touch does not have call making facilities and do not have cell phone carriers controlling over iPhone.
Diversification means new products in new markets. Apple Inc. enters new market with complete new offerings. This mainly entails significant costs as well as risk for extreme rewarding analysis.
For instance,
iTunes- At the time of launching iTunes and iPod, Apple Inc. targets diverse collection of customers from accessible client base especially to computer enthusiast. It mainly entered into music industry in dangerous as well as gainful way (Al-Aali and Teece 2013).
Selecting options from Ansoff Matrix and assessing level of:
Suitability- Apple Inc. has suitable products that help the company in sustaining in the global marketplace as well as fighting against with competitors.
Acceptability- Apple Inc. has acceptability power and open for innovation activities as far as possible.
Feasibility- Apple Inc. has certain feasible options and produces products according to the potential customer base. Apple products are premium-based and status symbol products (Barney and Hesterly 2014). People are ready to pay any price for the purchase of the Apple products.
Conclusion and Recommendations
Conclusion
At the end of the study, it is completed that planned management study at Apple Inc is never easy to compete with other competitors. It requires lot of investment for research as well as development activities and proactive in competing with other competitors of industry. Apple Inc. is working hard in retaining the topmost position from the last couple of years. This particular company needs drastic change at the same time. They should not wait for populace for buying their goods when they are on trade. Apple Inc. should rather focus mainly on customer support as well as improve in areas that have problems previously.
From the above analysis, it is required in conducting detailed investigation on the overall strategic issues faced by Apple Inc.
Strategic issues of Apple
Cloud Services
Internet Services
Social
Apple outside acquisitions
Apple Inc. is advisable to make most of their strength by way of using product differentiation strategies. This company should make use of its brand name as well as image for retaining the market leader position as far as possible. Apple Inc should make use of manufacturing attributes in hardware as well as software for future analysis purpose. This company should address in diversified markets.
Apple Inc should find ways in reducing the weakness and attainment of future goals and objectives. Apple operating performance affects greatly by economic as well as political uncertainty in United States. Another weakness that should be addressed by Apple Inc is research and development costs higher than its closest competitors do.
Apple Inc should capitalize its opportunities by taking advantage of its operating system as well as pursuit in music industry.
Apple Inc. should manage with their threats by competing with its closest competitors in terms of design, manufacturing as well as sales in aggressive terms. This particular company should check on Microsoft dominance and competitor copying programs at the same time. Addition to that, Apple Inc. should manage with software piracy and increased global competition at the same time.
Approach 1
It is advisable to Apple for opening six computer retail stores. Apple has recently opened stores in United States having peripheral as well as accessories for computers. It adds hardware for generating awareness as well as usage in established locations. It will help in increased product accessibility for accessories and increased awareness on Apple products. There is 2 percent increased in the after that 2 years by sales council in case of processor hardware.
Approach 2
It is advisable in the direction of contract music spokesperson for attracting upcoming generation who attends high school as well as college. It should invoke sense of style as well as connecting apple with certain characteristic and unforgettable top 10 hit. This will help in staying in the minds of customers and aware great influences on future purchase decisions. It should contract one music representative estimating $ 6 million.
Approach 3
It is recommended toward Apple Inc. intended for adding more features in the present products for better Wintel compatibility. Features such as iTune software compatibility by means of window base computers. In the year 2003, Apple unconfined iTune software tie together. It will help in increased market share in United States at least 30 percent for the next 3 years. Apple Inc. should invest money for research and development estimating around $ 50 million.
Reference List
Al-Aali, A.Y. and Teece, D.J., 2013. Towards the (strategic) management of intellectual property. California management review, 55(4), pp.15-30.
Apple. (2016). Apple. [online] Available at: https://www.apple.com [Accessed 6 Aug. 2016].
Barney, J.B. and Hesterly, W., 2014. Strategic management and competitive advantage concepts and cases. Pearson.
Barney, J.B. and Hesterly, W., 2015. Strategic management and competitive advantage concepts and cases. Pearson.
Carroll, R.J., Primo, D.M. and Richter, B.K., 2016. Using item response theory to improve measurement in strategic management research: An application to corporate social responsibility. Strategic Management Journal, 37(1), pp.66-85.
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Dobbin, F. and Baum, J.A., 2014. Introduction: Economics meets sociology in strategic management. Advances in strategic management, 17.
Fisher III, W.W. and Oberholzer-Gee, F., 2013. Strategic management of intellectual property. California management review, 55(4), pp.157-183.
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Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
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Ketchen, D.J., Ireland, R.D. and Baker, L.T., 2013. The use of archival proxies in strategic management studies castles made of sand?. Organizational Research Methods, 16(1), pp.32-42.
Lasserre, P., 2012. Global strategic management. Palgrave Macmillan.
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Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management. Springer.
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