Apple Inc. is an American worldwide corporation that manufactures and designs electronics and computer software merchandises. Business’s best-known hardware products comprise the Macintosh computers, the iPod and the iPhone. The firm was inaugurated in Cupertino, California on April 1, 1976 and was incorporated on January 3, 1977. The specified business has about 35,000 workforce around the globe had universal sales of US$ 50 billion in its financial year ending in 2014. Apple has established a very high status in the customer’s electronic commerce. The company has a faithful purchaser base which is devoted to the company brand. The business faced leadership challenge when Steve Jobs resigned from the CEO position. It then becomes difficult for the company to thrive without Steve Jobs, the man who knew the market and most importantly the technology. Current challenges of Apple are stiff as the smart phone market has become the PC market.
This report will highlight the strategic management and leadership of Apple Inc. It will outline the meaning of success in terms of Apple. It will then conduct the internal analysis of the company and will portray the contribution of Steve Jobs in the success of the company. In addition to this, the study will then review the strategies conducted by the company and its analysis of the future with PEST analysis.
Success is termed as the achievement of an action that is completed within a specific time frame or within a specific limitation. It also means completing an objective to reach the goals. It can be expanded for an entire project or can be made limited. Success can be achieved in a workplace or in an individual’s life. For Apple Inc. the meaning of success is to reach at a position where it could change the world (“Apple Inc.”, 2017). There are many methods to measure the success, but the most common practice done by companies is producing a balanced scorecard.
A balanced scorecard supports a business to revolutionise and raise itself to new altitudes or presentation, by helping its frontrunners to creating key decisions whoa are in relation to the company’s purposes. Balance Scorecard framework develops a foundation, in which further addition can be done to get the desired outcome. Apple, which is the leader in technology products markets, utilise five different indicators (Bourne, & Bourne, 2007). These five indicators are customer satisfaction, core competencies, market share, staffs commitment and alignment, and shareholder value. Providing training to the employees with innovative solutions such as effective distribution system is very important for the company in developing the competencies. The specified company issues quantitative measurement in order to gather the answers they needs and see if enabling employs developing the skills sets.
The eventual aims for Apple’s balance scorecard are in its background of vision and strategy. The stated company focus on mounting quality product with exclusively features that is capable to appeal the market notice while surpasses its contestants (Alhawari, 2015). One of the purposes is to endure competitive advantage in dropping the production cost and to maximise the financial returns to all stakeholders.
The success of Apple can be assessed with the financial display. The sales of Apple’s products had heightened over past years through new product introductions. The Company attained revenue of $78.351 billion dollars, a net profit of around $17.90 billion and earnings per share of $3.36.
The company believes in fulfilling the commitment and alignment among the workers. Due to this, Apple conducts a thorough employee survey of every organisational branch in every one or two years (Brindha, 2014). Market share is also another indicator due to which Apple not always influences to increase its profits but also influences the software developers. By implementing these all indicators, Apple manages to control its long-term performance.
Apple has managed to have the highest customer retention for getting another new model of its product. From the picture below, it can be stated that 83% of current iPhone users would love to buy new model of iPhone, while only 64% of the customers of Samsung wants to retain their products (Alhawari, 2015). It can also be seen from the fig. that 10% of the Samsung users are willing to switch to iPhone, while only 4% of the iPhone users are willing to change their iPhone preference.
Apple was first to create innovative smartphone among its competitors. Customer states that the mobile phones are easy to text, make calls and thus, they are completely satisfied with the company’s product.
Here are the reasons for Success of Apple
In every technological company, the goal is on improving the technology first, trailed by whether manufacturers or societies really need it use or not. Apple’s approach in this field is different from other companies (Brindha, 2014). The engineer who creates the product actually develops the product for them.
Steve Jobs had made a clear statement that every product of the company must be easy to operate. The company has a viewpoint that engineering design is an important section for any product, but if it’s not informal to operate, then it is of no use. It would be considered useless in front of consumers (Brindha, 2014). All the products that company manufacture needs to be intuitive and easy to understand and learn.
The Apple makes things simple for its customers. The company is successful because it diminishes the decision making procedure for the customers. The company has only one iPhone model and any customer who goes to Apple store could understand the major components of the product (Carpenter, & Sanders, 2014). Apple understands the concept of being simple and thus never tried to manufacture multiple versions of its products such as iPhone or iPad. All this makes buying of Apple product simple.
Apple products are simple to understand and employees are trained to be polite and to provide every possible service to its customers. Apple is the first to develop innovative smartphones among its competitors (Elliot, Herrasti, & Simon, 2013). Customers have views that Apple devices are easy to text, make phone calls, and most of the people likes the products design and features and the software’s are easy to navigate.
Apple all products are the recreations of its existing products. Company don’t invest in any product rather it try to improve it. For instance, Apple didn’t invented tablet, it reinvented it and made it better (Sheehan, 2011).
The business aims in staying two years in advance of its competitors. Companies competition with Apple, are developing products that are ready for action, Apple is already working on the product that is two years out.
The built, design and form factor of Apple products are always classy (Elliot, Herrasti, & Simon, 2013). The products of the company are pleasing to eyes and attract a lot of customers of the company.
Chain Analysis
Apple Value chain analysis is an analytical framework which supports for the purpose of identifying the activities related to business which can make value as well as competitive benefit to the business.
Apple Inc. Inbound logistics
Apple functions with thousands of suppliers around the world and at the same time maintain a highly complex management of supply chain. Apple’s commitments of purchase basically cover its necessities for the time up to 150 days (Elliot, Herrasti, & Simon, 2013). The management of Apple is acknowledged for the strategy of conducting suppliers for competing with each other and also condensed the amount of suppliers. The mains causes of value in the company inbound logistics associates with the economies of scale because of the hue opportunity as well as scale of operations and also the establishment of strategic relationship with the suppliers (Chazin, 2014). Furthermore, Apple Inc. implements a huge bargaining power in order to deal with the suppliers, thus the firm is able to secure the advantage of cost in the acquisition of resources.
Apple Inc. Operations
Apple procedures are separated as reportable operating divisions have been shown in the following:
Apple Operations are led by 116000 total time corresponding workers as of September 2016. Production outsourcing to the areas with low amount of possessions is the most important source of value for the company’s operations (Sheehan, 2011). Certainly, some models of Mac computers are produced in Ireland and USA and the most of the products are subcontracted to producing unit that is based in Asia.
Apple Inc. Outbound Logistics
Apple outbound logistics includes distribution, allocations and warehousing of ready iPhones, iPads, Mac computers and various other goods factory-made by the firm. E- commerce transactions is correctly recognised by Apple as a huge source of value in respect of inbound logistics, as e-commerce is quite cost operative in comparison to sales though Apple Store (Sheehan, 2011). Because of the efforts of the firm in this way, the company has become the third largest retailer in the US in respect of size of e-commerce facilities. Certainly, the company has e-commerce sales of USD 12 billion that books to around 5.1 per cent the firm’s entire sales.
Human Resources
In Apple HR strategies, there are three main component, namely hiring put into practise, worker culture and talent management. As being the market frontrunner in terms of innovation products in this competitive business environment, the company’s in effect HR strategies has facilitated in constructing strong employee culture which permit its products to get perfection in every detailed section (Kubilay, 2015).
Sales and Marketing
In sales and marketing, Apple distinguishes its products innovation from its rivals and contends with them on branding. Thus, Apple sells through seven sales channels. These channels are Apple Online store, Apple retail store, Third party cellular network carriers, wholesalers, direct sales force and value-added resellers (Lashinsky, 2012).
Services
Apple is world renowned for its excellent class customer service in counter sales support and businesses and employee’s development and training. The executives of the specified company are well-trained, polite and technically understanding in outlining the Apple products and services (Lashinsky, 2012). They are capable enough to convince the customer to purchase the product and also address politely to the customer’s queries.
Technology development
For Apple, innovation is the key in meeting the customer demand. The products of the company are very user friendly and meet the customer needs. The company iOS features offer 14.3 present more apps tan android.
Procurement
Vendors of the company must fulfil with Apple’s procurement of high values of good services and quality pledge (Lashinsky, 2012). They must ensure that they are meting up the promises and delivering high quality goods and services via Apple’s Supplier Diversity Program.
The core capabilities of Apple are its advanced designs as well as expertise that are based on software. The new set of Apple goods involves iPad, iPod and iPhones along with more advanced structures and varieties of colours. The company is quite strong in terms of finance as from 2003 to 2008 it has increased its volume of sales from $24 million to $ 3.5 billion (O’Grady, 2009). Because of this aspect it is possible for the company in order to pay a lump sum amount money to its highly standard and skilled people in the department of research and development for developing, for example, gadgets that highly technical. These devices should be new in designs, in nature as well as cool in presence that could gather vast amount data and also quick in the handling speed. The main abilities of Apple are robust as it is quite tough to emulate the company products and this provides it the edge over its rivalries (Scott, 2008). It has a restricted patented system that assures for the company that there is no escaping of its talents and its top-secret recipe. On the other hand, the company is quite reliable in its good collection establishment and improvement.
If any firm divert its business in total in product line than there are opportunities that it will be unable to find its core capability. Apple is quite strong in its core competencies and also dynamic potentiality and it has always been approachable to any modifications brought in by its rivalries. Apple has been emphasizing much more on emerging competencies that are not restricted to technology only (Mickalowski, Mickelson, & Keltgen, 2010). With this process the company is flourishing for the purpose of achieving extreme kind of technical growth and development and also in doing customer orientation. Technical specialists of its concerned employees play a crucial character that can able to take to a great end in respect of goods structures specifications and functions.
VRIN outline is assessed to the company’s Position in its competitive advantages and market positioning.
The VRIN framework identifies the Apple’s sustainability advantages. They are mainly inbound and outbound logistics, sales and marketing, customer service and technological development that allow Apple to be advance to its rivals (Elliot, 2012). However, Apple can improve by developing the businesses in making up the low sustainability areas.
Steve Jobs was the biggest reason for which Apple is one of the best companies in today’s market in computer technology. He started a positive trend that is still continuing even after his death (Lashinsky, 2012). The first contribution that Steve Jobs made in Apple is in its foundation. He built incredible teams and it is the essential component for an enterprise achievement. With an amazing team, he was able to build great products and created lots of jobs. After he returned to company, Apple increased is human resources to over 46,500 employees.
A transformational leader is someone that takes extraordinary steps to complete his or her goals. They aim in changing the views of the others and convincing the followers that ethical behaviour is correct to the leader (Elliot, Herrasti, & Simon, 2013). Steve Jobs as a transformational leader has managed to make a large impact towards the society by his contributions and accomplishments. He had the great brilliance and ability to handle the complex problems by focusing on the issue of the challenge.
Steve Jobs was clearly the iconic innovators of the decade. He was able to combination the commercial terms and design receptivity by making his expertise something which is really innovative, cool and could be seen very attractive to own. Another contribution Steve made in the company is by focusing on the innovation (Johnson, Li, Phan, Singer, & Trinh, 2012). He always had the gut to convey that product is not good and need to redo all its components whenever product was not up to his satisfactory state. His importance and status in the company can be purely unstated by the fact that whenever there was a rumour of his health conditions, the stock market of the company fell substantially.
Tim Cook took over the Apple since 2011 as CEO and his leadership stylishness is very charismatic. Cook present to have approved some of the existing entrepreneur’s practices and pampered a mixture in his leadership administration. Cook co-operated his strengths and emphasis on improving the business with Apple’s talent resources which is an indication of his charismatic leadership (Elliot, Herrasti, & Simon, 2013). He kept high expectation from the organisation by inspiring its employees on encouraging collaborative environment in the company. Cook leadership style is praised in public and is supported by the reason that Apple has grown with 600 billion in marketplace capitalisation, which has made the Apple as the most valuable company in the world. The contribution made by Tim Cook was confirmed to be effective for the company in gaining the position of most valuable establishment and achieving the maximum sells record under his leadership.
This strategy helps Apple to tighten competitive advantages in putting itself against the opponents. These strategies are cost leadership, focus or a mix strategy.
Cost leadership are mainly rigorous cost driven in lowering its functioning cost to withstand the competitive advantage. Though, it may be possible that sales growth do not upsurge, but the units cost declines every year (Mehdi, 2015). On the other hand, differentiation is the uniqueness of the merchandises that can cost high speculation in technology capabilities. Such approach is mainly on innovative products, as it gains the market position.
Growth strategy can be termed as the approach intended at winning huge market portion, even at the expenditure of short-term pays. There is the four wide-ranging diversification of growth approaches namely product diversification, product development, market penetration and market development.
Product diversification: Apple utilises product expansion as its main concentrated approach for the growth. Product developed needs that the corporation must carry attractive goods in order to enhance its marketplace portion and enactment (Johnson, Li, Phan, Singer, & Trinh, 2012). The company gears this growth approach by modernisation in its research and expansion procedures. With its concentrated growth approach, Apple outlooks product diversification as the critical success feature.
Market penetration: Apple operates market penetration as its second most concentrated strategy or its growth. Its market diffusion includes attaining a huge market share by marketing more of the company’s selling merchandises (Mehdi, 2015). The company use advertising through numerous websites and media channels. Its innovative and attracting ads inspire more individuals to buy Apple products.
Market Development: market development is the least noteworthy of its concentrated strategies for growth. Apple’s market expansion includes developing new marketplaces for new products or arriving completely new markets. This approach is same as to market saturation but it focus on founding the attendance of new market (Sheehan, 2011). The specified company applies its rigorous growth approach by authorising new vendors in the marketplaces where corporation does not have any past attendance.
As most of the Apple stores are in America, the company plans to open more global stores in the upcoming future. Apple seeks to connect all the people on a global scale and define their products as platforms of potential. Apple which is the world’s most treasured corporation in terms of market capitalisation uses 3-point marketing philosophy. Its marketing technique embodies everything that globalisation is all about (Tóth, 2016). Apple has entitled people under a brand. The products of Apple are available in more than 60 countries and with same design regardless of the region. The company didn’t customise their phones in terms of features and looks and is taking the term global to a most clear level.
For any global brand achievement, there is a sector of cultural appreciative. Going worldwide is not about just proposing a product to numerous markets of the world; it is also about discovering the denominator for specific manufactured goods that is region-blind (Tóth, 2016). Apple has found its denominator as for Apple; the main thing is its design and simplicity.
Apple is the largest and most valuable business in the world in terms of market capitalisation. Old-fashioned cell phones had very restricted capabilities and computing capabilities. Many of them were premeditated to deliver basic facilities like making and receiving calls and sending and receiving messages. In past, the mobile marketplace was led by corporations like Nokia, and Motorola, but Apple acquired over the market with launch of iPhone smartphone in 2007 (He, 2012). The iPhone series of the company is very popular with the people due to its touch screen and multi-touch user interface. Development of new and innovative product is the chief competitive strategy of Apple. The company utilises and implements blue ocean strategy which encompasses the doing of the competitors.
Apple is the world most valuable company in terms of market capitalization and has been in top position in mobile market in diverting innovative and great products to its customers. During the development of laser printer, the management of apple collaborated with Canon Company. The collaboration ensures that less time duration was required in enhancing high resolution printer. After this collaboration the company understand the advantage in realising the profit from collaboration (He, 2012). Joint venture is one type of strategy used by apple for is collaboration concepts in this a partnership is made between two or more companies to create a new entity. Apple partnered with IBM and HP in order to develop computer operating system. This collaboration was termed as Talijent and was aimed to overcome the widely used windows operating system developed by Microsoft.
How the environment will affect the sustainability of the company in the future
Apple now plans and produces as wide ranges of automatic devices that involve tablets, televisions, music players and smartphones etc. Apple has a quite exclusive corporate model under which it designs proprietary software and also provided its own operating system for every devices of it (Tóth, 2016). Here, in the following, the researcher has analysed the market environment of Apple with the help of PEST analysis that will affect the sustainability in the future.
Political Factors- Apple is hugely relied on lower cost producing in China. The political and social conflict occurs in China that can interrupt manufacturing as well as can enhance the costs of manufacturing in the country. There have been demands to limit Chinese imports in the US which is an exertion for boosting American industrial (Jacob, 2013). The amount of acquiring replacements to Chinese production can be huge for Apple and this can lead to enhanced amount for the products of Apple. The company’s dependency on Chinese production and the markets can make it defenceless to political conflicts in the country.
Economic Factors- The enhancement in labour cost in China can take away the advantages of cost of some merchandises of Apple. Declining middle-class earnings and salaries in some industrialized nations by including US can decrease the potential marketplace for higher end customers products like those are marketed by Apple (Jacob, 2013). The strong US dollar can increase the rates of exchange and make it quite expensive for Apple to do business in the countries of key marketplaces such as China and Europe.
Social Factors- The largest growth in customer contributions in coming periods will be in the locations of world like Africa, where persons are unacquainted with the products of Apple. Customers in those marketplaces and younger persons in Apple’s developed markets like US, lack the solid emotional accessory to the products of Apple which drives sales.
Technological Factors- Competitors like Samsung and Google have conducted a string potentiality for duplicating the products and services of Apple. It took less than one year for Google in order to roll out an expense app such as Android Pay along with the same abilities as Apple Pay. This signifies that many of Apple’s mark products and services are no longer exclusive. The amount of new customers goods Apple can be able to bring out is quite restricted. For example, many of its new offering like Apple Tv will have a limited market (Johnson, Li, Phan, Singer, & Trinh, 2012). Growing consumption of tablets and smartphones will lower claim for Apple’s famous private computers.
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