Apple Case Study
(Chapter 1) Consider Apple’s strategic management in regard to each of the key attributes outlined in Exhibit 1.1 on page 7. Each of the 4 attributes should be considered in-depth and discussed in a separate paragraph. (For example, paragraph 1 should discuss Apple’s goals and objectives. Do you believe the mission, vision, and objectives align? Why or why not?)
- Apples goals and objectives
Apple brand has remained strong in the market that has made it stand out among other brands like Samsung. Apple Company wants to continue with its plan, which must follow what they want to achieve at the long run. The first objective of Apple is to develop products that customers can access and depend upon them. The Company’s goal is to have a big say in the future market by dictating the technology movement. The second goal of Apple is to have a team that is well diversified to enhance idea generation.
- Decision Making by Apple’s Stakeholders
The major stakeholders for Apple Company are employees, customers, investors, suppliers, and distributors. When the Company is making decisions, it causes significant consideration on the stakeholder’s opinions. Customer turn to be the major stakeholder in making a decision. The Company considers the feedbacks of the customer on where improvements are required. From there, Apple makes the decision of whether to improve the product or drop it from the market. Employees also play a huge role in decision making. They are the human resource needed to create an affordable product.
- Perspectives for both short-term and long-term.
Apple is turning its strategic plan from short-term to long-term strategies. The Company is willing to forego short-time profits in case of potential long-term profits. For instance, the company has introduced the iPad mini phones and priced it high despite the low margin of profits, and the company is targeting increased profits from the potential market for tablets.
- Enhanced Efficiency and Effectiveness
Apple Company has secured a huge base of of loyal customers from who they will accrue huge profits. The Company founder had effective insights on predicting customer wants and how to enhance their interaction with technology. Apple uses billions of U.S dollars to research and develops its products making the company be successful. Also, Apple has invested in designing its products to increase its effectiveness to its customers.
Do you believe the mission, vision, and objectives align? Why or why not?)
Yes. The company will be successful because the created technology is unique and in line with the technology that is already in the company. Secondly, the mission, vision, and objective align as Apple has a team that is interested in making everything happen.
(Chapter 2) What are the key forces in the general and industry environments that affect Apple’s choice of strategy? Include Porter’s 5-Forces Analysis.
Apple Company is affected by certain forces like sociocultural, demographic, technology, political, and legal. Consideration of these factors is essential in determining what customers want in the market. To assess market competition, Porter’s 5-forces is used. The tool was created by Michael Porter in 1980. It has been widely used in business today. The model has been used at Apple Company in the following ways.
- The threat of New Entrants
The industry continues to grow with attempts to generate new ideas that haven’t been thought of to create the Company’s uniqueness. Creating a different and improved brand will attract customers to leave the company they have been loyal to because they are getting what they want. The entry of new companies is also increasing competition as they try to be on top. Apple has developed its brand, which is ahead of competitors, which is pulling more loyal customers. The brand is recognized across the globe. To avoid competition from new entrants, Apple has developed a superior software that is limiting the potential to switch iPhones to non-iPhone. This has made most customers remain loyal with this brand when buying a new iPhone to ease switching.
- Power of Suppliers
Suppliers have the potential of commanding prices in the market. A number of factors determine price change. Some of these factors include a number of suppliers, availability of different products, and the size of supplier influence. The power of suppliers depends on the impact they have on the company. Being a great brand, many suppliers always want to be associated with Apple. Since Apple is expected to create the bulk of products regularly, this gives suppliers a chance to be sure that the demand for new products and services will always be there, and Apple brand has these products available. Due to the availability of more suppliers, Apple does not suffer from the power of Suppliers.
- Power of Buyers
The power of buyers determines how much pressure is posed by customers to the business. Customer power is caused by a company having few buyers, price sensitivity of buyers, opting to buy from other companies. To avoid this challenge, Apple aims at ensuring customer satisfaction to avoid brand switching and losing customers. This is having unique products that meet customer satisfaction.
- Availability of substitutes
The availability of better options can be a threat to Apple. Products produced by Apple can be substituted by others. For instance, iPhones have a high-quality camera. However, customers can substitute it by purchasing a digital camera. However, this doesn’t pose a real threat since most customers prefer the iPhone camera.
- Competitive Rivalry
Apple faces stiff competition from rival firms that are really aggressive when competing with Apple. Most of these firms are doing whatever it takes to overthrow Apple. To survive, Apple Company is doing a lot in advertising and promoting its products through research and development of new technology. Since switching from one brand to another for customers, this tends to appear as a significant threat to Apple Company.
(Chapters 3-4) What internal resources and assets does Apple have that may give it a competitive advantage? Include a full value-chain analysis. How does Apple use those assets to craft their strategy?
Operations
Apple has disintegrated its operations into five sections. These sections are America, Europe, Great China, Japan, and other parts of Asia Pacific, including Australia. The company has a huge labor force made of over 123,000 employees and targeting to create another 20,000 jobs as its one of its five-year plans. This makes the company have a competitive advantage over competitors.
Inbound Logistics
To enhance a stable supply chain, Apple has outsourced many suppliers from all parts of the continent. The supply chain is made up of manufacturing, outsourcing, distribution, warehousing, and return. On confirmation of Tim Cook is the CEO; he reduced suppliers and come up with a strategy on how these suppliers will compete with each other. As a result, the company realized a reduction in the final product, which increased its competitive advantage as every supplier want to win the tender.
Marketing and Sales
Apple has secured a total of 7 places for selling their products. These places are an online store, retail store, direct sales, wholesalers, retailers, and value-adding sellers. Apple has been focused on increasing their company sales. This is one of Tim Cook’s strategy, and it is having a significant effect.
Quality Customer Services
Apple Company has been clinical in enhancing customer service throughout the process of pre-purchase, purchase, and post-purchase. Apple also has more than enough employees whose goal is to ensure proper customer service. This makes Apple Company be unique and have a competitive advantage over competitors.
(Chapters 6-8) How does Apple manage its diversification, its international, and its entrepreneurial strategies? What do you feel they do particularly well, and how are they weak in each of these areas? How would you compete differently in each of these areas if you were advising leadership? You should have a separate section/paragraph for each chapter in this answer.
Diversification is one of the important strategies used by companies operating in an extremely competitive field. To overcome this competition, Apple is doing whatever it can to diversify. One of the ways Apple Company is diversifying is through employing workers who come from different backgrounds who introduce different perspectives in the way of operations that can spark new ideas and innovations. Apple has now extended from not just being iPhone and Computer store to increase its merchandise to provide more products for its customers. Apple has started offering products classified as “wearables’’ that include Beats, Apple Watch, and Airpods that are generating $9 dollars per year. Apple watches are doing well indicated by quarter performance analysis done in March. In the department of “wearables’’, Apple is thriving as there is minimal competition in the department. However, the smallest competition comes from Fitbit, which is insignificant as its sales are decreasing every year.
Apple is also doing a lot of research to increase product mix in the market the company is doing a lot of research to develop products to have an international approach since achieving a global recognition depends on an understanding of culture. Apple has over 480 stores in 18 countries and online stores for 39 countries that need enough understanding of market target ad segmentation. Apple keeps off social media where customers advertise products in place of the Company. The strategy is somehow risky due to increased social media involvement by the current generation. Through this, Apple has been extremely splendid in knowing the demand and as well meeting the demand in the market through the execution of products they would like.
(Chapters 11-12) Do you think Steve Jobs is solely responsible for Apple’s success? Do you think Apple will continue to thrive under new leadership? What changes have occurred since Job’s death? Do you think these been positive or negative changes, and why? Be sure to frame this answer using concepts from the last two chapters in the text.
Citing the success of Apple solely on Steve Jobs will be unfair. Jobs created a team of workers that drove Apple to where it is. This was due to Job’s interest in seeing the success of Apple. Similar to other types of businesses, Apple could not stand by the hand of one person. Therefore, Steve required the team to see his vision and mission accomplished. Steve was totally ahead of time, and his ideas seemed crazy. Consequently, he could not have hired anybody without the same vision, that why he hired people with the same goals like Ronald Wayne and Steve Wozniak, among others.
Steve Wozniak is regarded as an American Inventor. At 67 years, he is the man behind all Apple inventions. He designed a lot of technologies like hardware, Operating System, and Circuit Board design, among others. Since Jobs lacked such skills like, he shared his vision with Wozniak, who made things happen.
Ronald Wayne (84 years old) was the co-founder of Apple Company. He wrote the Apple logo and involved in writing the partnership agreement. Among the co-founders, he has lesser reputations but took a huge role in overlooking the overall operations of the company.
Tim Cook worked for so long with Jobs even before taking the position of CEO in 2011. This worked out well for the Company as he had understood all Company objectives and visions. Similar to how Apple Company continued to thrive under the leadership of Cook, I believe it will still thrive under the right leadership. The new leadership comes with new ideas, which gives the company a room to refresh. Tim Cook successfully implemented Job’s ideas, which made Apple receives global recognition. Like Job’s advice, the new leaders need to heed to his advice to “handle each decision by doing what is right.”
Like normality, Apple has experienced certain changes under new leadership. One of these changes was extended decision making that was not directed to Cook alone. For example, in 2014, apple acquired Beats that is a designing company for headphones. Instead of the company being run by Apple, Jobs allowed it to run on its own, which later own lead to increased innovation to apple music and watch. The demand for technology continues to rise, which is increasing competition for any company in the market. Therefore, a change, in my opinion, is positive since Apple needs to focus on new projects to enhance its expansion and make it remain on top.
References
Ferdinand, A. T. (2018). Company-Specific Advantage and Sustainable Competitive Advantage. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2340249
Kamran, Q. (2016). “Complexity,” the 6th Competitive Force that Shapes Management Strategy – A Cybernetic Approach to “Porter’s Five Forces that Shapes Industry Strategy” in Turbulent and Complex Environments. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2137853