Strategic management is known as the management of all the goals and objectives of the organization by optimum utilization of the resources. It refers to a full-fledged procedure that includes setting of the objectives, analysis of environmental internal forces, analysis of organization’s external forces and evaluating the strategies by considering the feasibility according to the organization. Strategic management gives an idea about the implementation of the strategies in comparison to the competitors and recognizing all the opportunities that helps in the growth of the organization. There are different aspects of strategic management that defines how strategies has been created and implemented on an organization. It helps in facing the competition in the market. Strategic management helps in human resource planning and assists in internal as well as external communication practices. An organization can easily achieve its targets by following a feasible and good strategic plan. This report is about an organization named Apple Inc.
Apple Inc. is a multinational company belongs to America. It involves in the design and manufacturing of different consumer electronics and computer software related products. It is basically famous for its three products I Phone, I Pod and Macintosh. Apple software uses Mac OS X operating system and it has very creative software and browsers. There are more than 250 retail stores of Apple Inc. in nine countries. It has an online store too where they sell their products online. It was established in 1976 in Cupertino, California by Steve Jobs, Steve Wozniak and Ronald Wayne. It was earlier known as Apple computer INC. for 30 years but then removed the word ‘Computer’ In the year 2007 as it has expanded the business by entering into consumer electronics market. It has approximately 35000 employees and sales of US$32.48 billion. It provides unique product in the market that helps in creating a big reputation in the consumer electronic industry. It has a very loyal consumer base that completely devoted to the Apple products and the brand basically in United States. It has also been named by Fortune magazine as the most admired company in United States and in the world also.
There are different objectives of Apple Inc. related to all the marketing mix as the four P’s are the most important aspects for the success of the organization. All the objectives and strategies have been created by considering marketing mix. Apple Inc. is considered as a leader in Technology market as it is really good in marketing and branding of their products (Baines, 2011).
Apple is one of the largest companies in United Sates that has a market cap of over $917 billion as of June 27, 2018. Apple has a very good position in the stock market with an average volume of approximately 29 million shares traded in a day (Sum, 2011). Many insiders own a large stake in the company and there are some institutional investors that have a good position. Some big shareholders are Tim Cook, Arthur Levinson, Bruce Sewell and Jeffrey Williams.
The Board of Directors of Apple has expanded the roles and responsibilities of its Independent Nomination Committee in order to include Corporate Governance as the new Nominating Committee. It has also expanded the role of the Audit committee according to the Sarbanes-Oxley Act and proposed SEC and NASDAQ regulations. The two committees are handled by independent directors and the staff includes many independent directors (“Enhancing innovation through supply chain management”, 2015).
Apple has a high competitive advantage as there are some features that make the company different from the competitors.
(“Apple Inc. Strategies”, 2018)
Value Chain analysis of Apple refers to an analytical framework that helps in identification of business activities that are responsible to create value ad competitive advantage to the business. Below diagram shows the value chain analysis of Apple Inc.
(“Apple Value Chain Analysis”, 2018)
All the operations of Apple are divided into some operation segments-
There are approximately 1, 30,000 employees who are working with Apple. Apple outsources its manufacturing operations to get lower cost of resources is the major source of value for the operations of Apple. Only a specific model of Mac computers are manufactured in USA and Ireland and the remaining product are outsources to different manufacturing unit present in Asia (Grant, 2013).
There are different activities related to warehousing and distribution of I phones, I pads, Mac computers and other different products of the company. They all are a part of outbound logistics. E- Commerce is helping to earn more profits as company has a high source of value in relation to inbound logistics because E- commerce has been considered as the most cost effective technique of sale in comparison to sales through Apple retail stores.
After doing so many efforts to achieve a higher position in the market, Apple has become the third largest retailer in US in terms of e- commerce business. Apple has a record of sale of USD 12 billion through e- commerce that is 5.1% of company’s totals sales. There is a high market penetration in the Asia’s and China’s market from outbound logistics point of view. The reason behind this is selling the products in a particular market do not involves a high logistics expenses and it gives customers a cost advantage by availing offers (Roosa, 2016).
Apple sells the products with the help of these seven channels-
The company’s recorded sales for domestic as well as international market was accounted for 37% and 63% respectively. In the same time period, the company’s sale through direct and indirect distribution channel was 28% and 72% respectively. Apple has been increasing concentration on the sales and Tim Cook has announced a further increase in the sales.
Apple values its customers very much and they provide quality services to them during pre- purchase, at the time of purchase and after the purchase. Apple Inc. has its service center at different locations where anyone can reach for any issue related to Apple product. The service people of Apple are fully trained and very polite in communication. Apple also offers the exchange of phone to an upgraded model by paying an additional amount.
VRIO framework is basically used to evaluate the competencies of an organization by completing an analysis of its value, rareness, imitability and organization.
Apple is launching a new Apple phone in some time period and the target of the device is to provide the clear communication capability as well as data storage, internet access as well as computer dissemination tactics. They focused on the product’s speed and easy to use to that it can be considered as a very user friendly device. Apple has combined different features in a single device like music feature of I pod. Apple is considered as a user friendly portable device that helps in assessing different features without hassles (Pulido Polo, 2018).
There are different companies that are in mobile phone market but the other mobile phones are cheaper in comparison to the Apple phones. Apple has maintained the quality of product, it is offering to the consumers. Their products are absolutely considered as a symbol of luxury within young generation that makes the product more worthy. A malfunction in Apple devices has come in the year 2008 that was regarding the chip that used to manage the devices. It has influenced the reputation of the company and they started losing their market shares. But somehow, Apple started advertises about their products more and again increased the sales of their product. Apple is known for the advanced features and quality services it provides to the customers that makes Apple different from other competitors.
There are a lot of competitors of Apple in the mobile phone market that provides features similarly like Apple. Samsung is the biggest competitor of Apple as it launches the similar features in Samsung mobile phones. There is a tough competition between the two companies as the limitations of both of them are same like multimedia capabilities in video recording option, camera is more good, touch screen feature without the presence of Home button. Competitors are trying to copy the design of Apple phones and increase the sales by introducing similar features like people. People who cannot afford Apple phones are always up to the purchase of such phones. But still, the loyal customer base always goes for the Apple products by spending more (Schetter, 2017).
Apple has created a very good rand name by providing innovative as well as technologically advanced features to its customers. Apple mobile phones are known as its long lasting battery, easy user interface, and camera quality and trouble free hardware. Although it has done something wrong that resulted in exploitation of the brand name but Apple has started maintaining their products of the best quality. Apple has started asking feedbacks to the customers and applies their needs in the production of a new product.
Apple is known for the quality product like I phone, I pad, and Mac Book and I pod. It is doing good as it has a loyal customer base across the globe but there is some recommendation that helps Apple in increasing its sales. Apple should start implementing hybrid strategy as it has integration with the cost leadership strategy and differentiation strategy. It helps in promoting economies of scale and decrease the cost in order to earn high profits. It can help in develop a philosophy of ‘Think Differently’, creating innovation in the products, management, marketing and services as these are the major things for the implementation of differentiation strategy. Apple should continue in the ‘Switchers’ campaign as it helps in creating customer focused strategies that help in understanding the needs and the requirement of the customers. It has to adopt an aggressive advertisement strategy that can shift the users from Microsoft to the Apple by the expansion of market shares. Apple should not stick to consumer electronic market only as there should be some expansion strategies in other areas too. Apple should focus on creating a healthy relationship with the governmental and educational organizations that can constitute a main source of profits in market. The major market segment for apple are schools that is considered as a low budget and limited growth sector but it can help the organization to earn a good amount of profit.
Conclusion
Apple is one of the big organizations of the world and it is doing a good job by creating consumer satisfaction. It is famous for providing quality products to the customers that can satisfy their needs. It always focuses on innovative methods and new technologies to make the product more perfect and user friendly. Apple should start explore new segments of the market with the same product or some other products as Apple products are quite high in price and they are not affordable for each class of consumers. Apple should concentrate on the cost management in order to earn higher profits. There are many competitors in the market and sometimes it becomes difficult to compete with them so Apple should always make their customers happy so they can be loyal to the bra.
References
Apple Inc. Strategies. (2018). Retrieved from
https://www.slideshare.net/mahiadel94/apple-inc
strategic-case-analysis
Apple Value Chain. (2018). Retrieved from
https://research-methodology.net/apple-value-chain
analysis/
Baines, P. (2011). The political marketing mix. Los Angeles [u.a.]: SAGE.
David, F. (2016). Strategic Management. Prentice Hall PTR.
Enhancing innovation through supply chain management. (2015). Strategic Direction, 31(6), 1-3.
doi: 10.1108/sd-05-2015-0064
Grant, R. (2013). Contemporary strategy analysis. Chichester: John Wiley.
Lockamy, A. (2017). An examination of external risk factors in Apple Inc.’s supply chain. Supply
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Pulido Polo, M. (2018). Acts or events? A perspective from the marketing mix. IROCAMM
International Review Of Communication And Marketing Mix, (1), 56-66. doi:
10.12795/irocamm.2018.i1.04
Roosa, S. (2016). From the Editor: Strategic Planning. Strategic Planning For Energy And The
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Schetter, U. (2017). Quality Differentiation and Comparative Advantage. SSRN Electronic Journal.
doi: 10.2139/ssrn.3091581
Steiner, G. (2014). Strategic planning. [Place of publication not identified]: Free Press.
Sum, V. (2011). A Trade-Off Analysis between Cost Reduction and Product Differentiation for
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